Absolute shock and desperation over financial aid letter

Paying for College
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<p>I am almost beside myself with anxiety: we got our financial aid letter today from the school my daughter got into, early action. Over the phone they said my "worst case scenario" (their words) was $9,000. Our FAFSA EFC was under $4,000. They want me to pay $51,000. This is a school that says they meet the entire demonstrated financial need. I was invited to write a letter asking for reconsideration. </p>

<p>I have already written at length to them about how as a widow I am extremely conservative with my finances, living off interest from a small life insurance policy. They are asking more from my daughter herself than what she has in the bank or will earn over the summer. I spent the day trying to convince myself that they misplaced a decimal point but by phone they confirmed the figures. She has National Merit status and we turned down full scholarships to several colleges because I thought we could afford this school. </p>

<p>If I liquidate everything I have and pay for college, I will lose my house. I haven't told my daughter yet because she will be heartbroken.</p>

<p>I literally don't know what to do.</p>

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<p>

Can you contact any of these schools and ask if they would consider reopening their offers?</p>

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<p>Agree with above. If that doesn’t work, see if the early action school will consider giving your daughter deferred admittance in 2012 instead and she can take a gap year to either get finances to afford school in 2012 or reapply to other colleges for 2012 while working, taking community college courses, etc. That way, the dream early action school is still a possibility but you have time to get back other options.</p>

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<p>First thing Monday morning, call the school. Do you know the title or position of the person with whom you spoke? You need to ask for someone further up the chain of command. You need to express your shock, and ask them to explain to you what information caused them to bump up your EFC. I am assuming that the 4000 EFC is FAFSA (meaning you would have a small Pell grant) … and the Profile EFC was much higher. Explain your situation and politely inquire about the aspects of your financial situation that lead them to believe you can afford to pay that much money. You are NOT out of line to ask this question. If they tell you that you can “write a letter,” tell them that you need to understand how they are assessing your finances in order to address it in a letter.</p>

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<p>It is so painful. </p>

<p>From what you said, maybe either you were misled about their financial aid awards, or maybe there was a mistake?</p>

<p>If you told them the whole story before and they gave you completely different numbers from the final numbers, it seems like maybe there is either a mistake or discrepancy somewhere.</p>

<p>Do you have certain assets such as investment properties or businesses? Those might count differently that more than traditional income? Or saving outside of retirement accounts? Are you self employed or have unique circumstances?</p>

<p>It definitely is worth a call to the finaid office to discuss the situation.</p>

<p>If you have other offers, see if they are still valid. </p>

<p>There is not only one school that can work for any kid. If this school is not workable, maybe a gap year or maybe a different school can work. Just be careful your child doesn’t fall into huge debt. There have to be options.</p>

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<p>Something is missing in this financial story. If your total income is from a “small” life insurance policy, that should not lead to a family contribution of $51K. Do you have a very large amount of equity in your home? Do you own stocks or other investments that have netted you an income? What was on your CSS Profile (or school finaid form) that was NOT on that FAFSA form that would generate such a huge difference in family contribution calculations?</p>

<p>I hope this is an error on the part of the college.</p>

1 Like
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<p>She can still get the big NMF scholarship from Bama…</p>

<p>Because of another NMF student in a similar situation, I spoke to Bama Scholarships this week and they assured me that any NMFs that apply now will get the NMF scholarship (but they need to apply soon…they can’t wait forever…LOL…the app is very easy)</p>

<p>full tuition, housing (including honors), 1k per year, $2k for study abroad, and a laptop. the mom would mostly only have to pay for meal plan, books, travel, and incidentals. </p>

<p>The D qualifies for Pell (probably about $1500), so with that and some of her mom’s contribution, she’d have everything covered. </p>

<p>At least it would be a financial safety.</p>

<p>(I suspect that the combo of the insurance money and home equity caused this problem. I wonder if the home is paid off.)</p>

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<p>If anyone wants to take the time to read the letter I have drafted to the financial aid office, I’d deeply appreciate any feedback. I’ll “redact” my daughter’s name along with the school.</p>

<p>Thank you for taking the time to talk with me today. I hope you will share this letter with the directors of your Financial Aid office.</p>

<p>I am confused and distressed over the financial aid award letter we received in the mail today. At first I thought you had misplaced a decimal point but now I see that you might have misunderstood some points I made in my original letter to you. Please consider this letter together with that first one, and please forgive the length as I want to be as complete as possible.</p>

<p>My daughter is everything to me. She is my only family member after my husband and parents died a few years ago. Her education comes before any material need: I have not traveled, bought an updated wardrobe, even had more than a few restaurant meals because as head of household I knew I could not spend what I did not have.</p>

<p>I have paid for her education by volunteering at her private school in exchange for tuition. This was an invitation extended to me by her principal. I calculated her tuition cost at over $81,000, a figure which I could not possibly have earned in our small town. When I say that I “saved” $81,000, this does not mean that I accrued this money and it is sitting in the bank. </p>

<p>Our FAFSA EFC was $3,846. I donÂ’t recall the EFC for the Profile, but it was very similar, maybe closer to $5,000. I honestly stated that I could afford to pay about $3,000 per year. </p>

<p>What most distresses me is a figure given to me verbally in a phone conversation with your office after a quick calculation using the figures I provided ($32,000 annual income from $300,000 in assets from life insurance and sale of my mother’s home). I was told that our “worst case scenario” (in the words of your office) would be $9,000 per year. Based on this figure, and our EFC from FAFSA, we turned down offers from other schools which were very generous, based on (daughter’s) National Merit status. I know that this figure of $9,000 was not in writing, but I relied on it and now I find that you are in fact giving us a scholarship of $1,000 plus a $3,000 loan and work study. Please understand my shock at the increase of $42,000 over what I was led to believe originally. </p>

<p>If I liquidate my assets and pay the $52,200 annually, I would almost certainly lose my house. In my very first conversation with your office, a helpful representative said, quote, “We don’t want you to lose your house.” What you are asking me to pay is approximately 50% more than I earn in a year and would almost totally deplete my resources before she graduates. I have no retirement savings and of course there will be several years of graduate school after college to pay for. </p>

<p>I still think there must have been some miscalculation on your end because you seem genuinely to want to meet demonstrated financial need. Please tell me if there are any specific points you would like me to clarify. What is it that caused you to increase my family contribution so dramatically?</p>

<p>A smaller point has to do with (daughter’s) contribution. The figure of $1,700 is more than she has in the bank or will earn over the summer. I had always understood that commonly the student is expected to pay about 20% of what they have in the bank. This would be closer to about $400, which again makes me wonder if there has been some miscalculation.</p>

<p>I will be out of the country with my daughterÂ’s senior class trip until March 30th. I realize this is a critical time for you to calculate or recalculate financial aid awards. If you email me and I donÂ’t get back to you it is because I am not able to get internet access during that time. </p>

<p>Enrolling (daughter) at (University) is my highest priority. I am not wealthy. Please look over this letter and my first letter carefully and understand that they represent nothing but a motherÂ’s sincere desire to have the very best education for her daughter. I am trying to arrive at a figure which is reasonable for both sides.</p>

<p>Thank you and best wishes.</p>

<hr>

<p>Here was the original letter, to give you the full picture:</p>

<p>I enjoyed talking with you a few times by phone. You described yourself as the “family advocate” for financial aid and encouraged me to be in touch with any further questions or points. My daughter is an accepted student in the Class of 2015. In addition to taking complete charge of the application process, she has insisted on being involved in getting financial aid, and sat with me while we filled out every page of the FAFSA and CSS forms. She understands that without generous scholarship help the cost of her undergraduate education will be beyond our reach. She has just now completed a campus visit and loves (University). She met with someone in your office today and asked a few questions.</p>

<p>I understand that most schools allow the parents to provide information in addition to what is conveyed through the FAFSA and CSS Profile forms, to give a complete picture of resources and needs, so here are a few more details.</p>

<p>Between 2004 and 2006, both my parents and my husband passed away. Small life insurance policies and my share of my mother’s home left me with about $300,000 in assets, which I have invested carefully through loans secured with promissory notes at a generous rate of interest which stays the same even with the fluctuations in the economy. The income from these loans has allowed me to work as a volunteer at (daughter’s) school in exchange for her tuition. By doing this I have saved about $81,000 in tuition, a figure I could not have possibly gotten through hourly work outside of the school. I live within my means and have always prioritized (daughter’s) education above anything else. If I really had no choice but to liquidate my assets to pay for college, I would probably not be able to keep my house.</p>

<p>(Daughter) is a National Merit Finalist and we are hoping that this will have some impact on her tuition at (University). </p>

<p>I honestly feel that a (University) education is worth every penny of the cost and I will do whatever is necessary to enroll (daughter). I work in fundraising at her school and I deal every day with families who are wanting to get the most education for the least amount of money. I have seen people hide or underreport assets and I know that this speaks not of dishonesty but of every parentÂ’s sincere desire to give their children the best education that they can. We are not wealthy but are also not dirt poor and I have been completely honest in my financial aid forms about how much we can afford. I also need to keep in mind that in a few years I will be approaching retirement age, and around that same time (daughter) will be finishing up with what will almost inevitably be several years of graduate school.</p>

<p>Warmest regards and thanks.</p>

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<p>That’s awful. I would contact the other schools. I’m hearing from my friends that fa offers are all over the place this year. (At least it wasn’t binding early decision!) Could your private school college counselor help or contact the regional admissions rep?</p>

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<p>Your letter is good but there is one point I would remove. The Profile does NOT generate an EFC at all. The SCHOOL uses the information on the Profile to determine your family contribution for that school. The other thing I would take out (if it were me) is the reference to your daughter’s contribution. MOST schools have a student contribution and there is nothing I’ve ever read anywhere that indicates it is a %age of anything. It is a dollar amount that the school feels the student can earn. I would imagine your daughter can earn that $1700 over the summer or by working part time even now…and then working in the summer.</p>

<p>You need to be clear about your finances…just state the facts. It sounds like you have $300,000 in the bank (is that correct) and that you are living off of the interest from that money. That being the case, you really have NO earned income (is that correct?). You need to explain this to the college…that the only income you have is from the money you have in the bank. At this point, it sounds like the school is looking at your bank account as an asset…which it is. <em>I</em> understand what you are saying about it being your only income source but truly, it’s an asset in the eyes of the colleges. </p>

<p>So…be VERY clear with your documentation about your cash and where it’s coming and going.</p>

<p>I know you aren’t soliciting this advice, but if this money really is in an interest bearing account that is viewed as an asset, you may want to consult regarding this. This money will be viewed as an asset year after year and you don’t want to have to worry from year to year about the school making a determination that they will no longer provide your daughter with need based aid. If you need it for retirement or whatever, you need a plan for it to BE in a retirement type of account…especially for financial aid purposes…but you cannot put $300K into retirement accounts in one year. </p>

<p>And be prepared to answer this type of question…it sounds like you are living off of the interest only of this account…and that your house is paid for (another thing this school is considering is the equity in your home). It may be that there is going to be an expectation that some of this asset should be allocated to college costs for your daughter.</p>

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<p>*A smaller point has to do with (daughter’s) contribution. The figure of $1,700 is more than she has in the bank or will earn over the summer. I had always understood that commonly the student is expected to pay about 20% of what they have in the bank. This would be closer to about $400, which again makes me wonder if there has been some miscalculation.
*</p>

<p>It is VERY typical for privates to include a “summer work contribution” for students. It can be as high as $2000, so it’s not a mistake that this school expects your D to earn/contribute $1700 per year. They believe that with a summer job, she could save this much along with a contribution from her savings.</p>

<p><a href=“$32,000%20annual%20income%20from%20$300,000%20in%20assets%20from%20life%20insurance%20and%20sale%20of%20my%20mother’s%20home”>I</a>. I was told that our “worst case scenario” (in the words of your office) would be $9,000 per year.*</p>

<p>This is what is causing the problem. Whoever you spoke to on the phone did not process this very well. It sounds like your home has equity? Does it? If so, there’s equity that they are also considering.</p>

<p>Is this a school that promises to meet need? </p>

<p>*I honestly feel that a (University) education is worth every penny of the cost and I will do whatever is necessary to enroll (daughter). *</p>

<p>Absolutely do NOT jeopardize your limited financial security for ANY college. No college is worth it. If you spent down your money, then you would become a financial burden to your D…that may seem OK, but it could cause a negative situation with a future spouse. </p>

<p>My concern is that while the school may make a small adjustment, they’re not going to get the cost down to an amount that you’ll find affordable. They may think that you could return to work to restore some of what you spend. </p>

<p><a href=“Daughter”>I</a> is a National Merit Finalist and we are hoping that this will have some impact on her tuition at (University).
*</p>

<p>If this school doesn’t give NMF scholarships then that probably won’t matter to them. Some elite schools are literally full of NMFs…nearly everyone is a NMF.</p>

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<p>thumper, thanks for your very insightful points. It was a long post but I explained in my letter how I had invested my funds with generous friends through promissory notes at 10% (this was generous 6 years ago and is unheard of now, so I am very lucky). I have a few thousand in the bank. My money has worked very hard to support me and it’s not at the–what? half a percent interest?–that banks pay. Plus this is completely and utterly safe. These people have my back and though it sounds naive I have no fears of losing this money.</p>

<p>This is my only income as I am not paid by my daughter’s school except in the form of tuition.</p>

<p>Yes, I am soliciting advice, so don’t hold back. What really rattles me is how I was told $9000 a month ago and now it’s $51,200.</p>

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<p>You can probably put as much ad you want into an annuity for retirement. However those are very tricky investments and require expert advising.</p>

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<p>I would also remove any references you make to funding graduate school for your daughter. You don’t want to sound like you are hoping for more financial aid so that you can save money to fund grad school. That is not going to help your case.</p>

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<p>Yes Mom2, the school says they meet need. Yes they are elite and I know that all the applicants are probably NMFs.
I have $100K in home equity with a mortgage for the other $80K.
This money is “family money” in that part of it was my grandfather’s and the rest was what my very responsible husband left me through life insurance. In my entire life, including my marriage, I never had an extra dime. The fact that it’s from my family means I feel an obligation to put it toward what is most important, my daughter’s education. Me, meh! But my daughter–she’s everything to me.
This has been an unsettling day and I am getting a little loopy from all this anxiety. I really appreciate everybody’s input and so far nobody has accused me of monopolizing this forum. Thanks!</p>

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<p>*What really rattles me is how I was told $9000 a month ago and now it’s $51,200. *</p>

<p>I think the person you talked to wasn’t used to dealing with this situation. The equity plus savings was the problem. </p>

<p>Don’t worry about grad school costs. Your D is a strong student…she’ll get assistanceships to pay for grad school. This I do know. I have a son graduating from college in May and every grad school acceptance has come with an assistanceship of full tuition plus a generous stipend. Your D is a NMF, she’ll likely score high on the GRE as well. </p>

<p>Again, do not risk your financial future for any school. </p>

<p>You can probably put as much ad you want into an annuity for retirement.</p>

<p>I’m not sure that would work…she needs to be able to live off the interest now. I think if her money got put in an annuity, she wouldn’t receive anything until retirement age.</p>

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<p>Monopolize away! We all learn from each other’s experiences. I would also remove the reference to grad school, and take out the concern about the 1,700- that’s nothing compared to the 51,000. I’ve heard about putting money away in annuities to “shelter” it, but don’t have any personal experience. Maybe there’s a financial aid person at your current school who could help with that?</p>

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<p>My concern with your letter is that you reveal too many cards. You say that it is your highest priority to enroll your daughter in University X, and you also say (in the third paragraph) that you are basically willing to do anything to get your daughter that education. If an institution has some discretion in adjusting financial aid, wouldn’t they want to use it to entice desirable students who are on the fence? In your letter, you sound completely committed no matter what, which reduces the incentive for them to work with you.</p>

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<p>I think it’s a very interesting thread. And I understand it’s tough for you but I actually think you need to be up front with your daughter about all of this. I understand it sounds like a dream school might be going down the drain and I feel for you. I agree w thumper and was thinking the same thing about the graduate school subject, we have made it clear to our kids that we will provide a great deal of help w college but the help probably has to stop after the 4-yr degree. Nobody will feel any sympathy regRding the grad school needs.</p>

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<p>Also, just wondering, when your daughter goes to college will you be able to keep your job at the school, but draw a salary? That might help a little.</p>