First time poster and I am very grateful for any advice, as this is our first child going to college (Bioengineering maybe pre-med) and we are newbs to the financial aid system. I am sorry for the longish post, but it’s a very confusing issue for me and it’s specific enough that I haven’t found any good answers yet.
We’ve run some numbers and calculators at some of the schools our child is considering. Based on our 2015 and 2016 income and assets, we won’t qualify for financial need-based aid when our child attends in fall, 2017, mainly due to my husband’s salary.
The concern is that my husband will not have a job at the end of this year. His company is closing his facility. He was offered relocation, but we opted to take a 9-month severance package rather than move our family of 3 kids. He could likely qualify for state unemployment if no new job appears and if we choose to apply for it.
Based only on my self-employment salary which should range between $75K to $125K, we would definitely qualify for modest or even substantial aid, depending on the school. It’s possible we could be living on my income for a year or more, depending on job prospects which appear to be poor at the moment. He could also land a new job tomorrow, of course, but let’s assume he’s unemployed for an extended time or finds a new job earning much less than before.
I understand the FAFSA changes for fall 2017 applicants and the application date is earlier and the lookback year is increased one year (remains 2015). I am trying to determine if our 2017 income will factor into the numbers even if our 2015 and 2016 income were too large for aid or if there are special exceptions for loss of job when the main wage earner loses a job.
The issue here is that our child is considering a few expensive private schools. Even if my husband wasn’t losing his job, we’re in that financial zone where our child could not afford to attend them at full price if accepted, unless we take on a lot of loans after the first year. If we did qualify for financial aid based on my salary only, this might open up some great possibilities outside of state flagship schools.
We do have some assets in my small business (also the source of my income) and college savings, which will pay for 1.5 years at full cost at the priciest schools being considered and still have a similar amount for our next child. But the problem is what happens if my husband is unemployed for an extended period, or more likely, accepts a job for a much lower salary to stay local. Based on severance and stock options, our 2017 income could still be borderline for aid, but by late 2017 and 2018, we will likely have a lot less disposable income for college right at the time our child enrolls!
Two years later, our second child will also attend college, so that will help a lot in the aid equation. But the dilemma is that if we say we could pay full price by using our savings for one year at a private school, then counting on aid in the following years (because of extended unemployment or having a 2nd child in college), there could be a big problem if we don’t qualify for aid for some reason in the future.
So, obviously I’d like to plan correctly and file our FAFSA and Profile accordingly and perhaps get some advice in regards to having our unemployment issue considered by private schools. If it matters, our child’s target and reach schools include Washington University in St. Louis, Vanderbilt, Northwestern, MIT and Stanford. Merit aid is a longshot, but possible since our child does have outstanding scores and grades, but we are not counting on it. Wisconsin, Purdue and Illinois are the financial and academic safety schools. UIUC is affordable regardless with in-state tuition, but if there’s anything we can do to afford one of the target or reach schools with minimal loans if accepted, we’d love to have some ideas, please.
If unemployment doesn’t matter because our 2015, 2016 and maybe 2017 combined income is too much, then we need to discourage our child from applying to these private schools, especially Stanford and MIT where there is essentially zero possibility of any merit aid. Northwestern, too, but in an emergency could be a commuter school in later years if absolutely necessary due to financial issues. I gather there is a possibility of some merit aid at WUSTL and Vandy. A $20K aid package could make the difference of minimal loans to big college loan debt. We are not any URM and aside from the small family business, have no other unusual circumstances. I know our situation is actually pretty good, but would love some advice from the experts.
To summarize, do schools consider current income, or just the income and assets for the look back year? If our lower 2017 income is considered, do we wait to submit FAFSA and Profile until January 1st 2017, when my husband is officially unemployed? Any other suggestions?