Article: Save for Retirement First, Then College for Kids

Parents Forum
41

<p>calmom - thanks so much for the links and FA info. D2 received a "professional judgement" adjustment to EFC last year, but I thought it was just the school being nice (which it was too, I guess), but I didn't realize that their ability to do that was actually in the FAFSA law. She didn't wind up picking that school, but the new EFC at least gave her a viable choice as opposed to feeling like she had no choice.</p>

<p>goaliedad - thanks to you and calmom for the heads up on grad school rules. D1 is in a field (communication disorders) where you now need at least a masters (speech) if not a doctorate (audiology) to get employed, not just statistically, but as a result of professional certification rules. I have been so focused on undergrad that I had no idea the grad school rules had changed to keep students as dependants until age 24.</p>

<p>I had the same experience as goaliedad while in law school in the 70's. My mom was single mom, a widow, with absolutely no outside source of funds and a low paying job. I went to college on scholarship and lived at home to save costs. I went on to law school and continued to live at home to save money and got student loans to pay tuition. Imagine my shock when I found out that the "rich kids" in my law school class were getting much better FA loan treatment than I was because they had been declared independant as a result of apartments I couldn't afford and tax returns filed by daddy for family owned company jobs I couldn't get. Here were kids whose folks could have easily just paid the tuition getting subsidized student loans while my mom was told we didn't qualify 'cause she earned too much money (not!).</p>

<p>Now, as luck would have it, D1 is going to be my dependant 'til 24 no matter what (for FAFSA). The story of my life - a day late and a dollar short. </p>

<p>Anyway, now I've got a new area to research. Lucky me.</p>

42

<p>mercymom,</p>

<p>Uh, If I've read other threads correctly, you many not be on hook for grad school FAFSAwise. I think the age only applies to undergrad education.</p>

<p>calmom,</p>

<p>
[quote]
I actually feel that the rules about financial aid and independence are there to serve a different social agenda: to ensure a steady stream of entrants into our so-called "volunteer" armed services. The reality is that the military is the only path for many students to get the funds for a college education, so basically they shut the door on financial aid for the same demographic who are also the most likely to enlist.

[/quote]

I wouldn't be quite that cynical, but it is an interesting coincidence.</p>

<p>Of course the other ways out are to FAFSA independence. Marraige and parenthood are 2 that come to mind. Not really good options, though. </p>

<p>Oh gosh, a new FA scam, sham Las Vegas marraiges to establish financial independence from Mom and Dad to get better FA. Just like they use sham marraiges for permanent residency. I'm surprised I haven't heard about that one yet.</p>

43

<p>Goaliedad, a weakness of the usually stellar college counseling depts of the prep schools, is their knowledge of financial aid. In fact, a number of them hire independent consultants to work with those kids and famiies who are going to need money for college. Do talk to the college guidance office about how they handle the college app process for kids who are looking for money.</p>

<p>The best schools I have seen for getting money for their students are the catholic schools. Those counselors aggresively go after awards and scholarships for their kids. I was most impressed with what a local catholic highschool racked up last year for their kids in terms of merit money.</p>

44

<p>Thanks goaliedad. Boy do I feel dumb. Finaid.org calculator just told grad school was instant independance. Sorry. The gray hair and osteoarthritis in my neck must be affecting my thinking skills (or lack thereof). Good luck for you and your daughter. Things always work out for the best, even if it doesn't seem that way at the time.</p>

45

<p>cpt,</p>

<p>I've heard that from someone else before, so there probably is some truth in it. </p>

<p>I figure that there won't be any reach schools in the application pile unless there is an athletic scholarship likelyhood. And I sure hope my daughter loves her financial safety school when that time comes.</p>

46

<p>Thanks, mercymom.</p>

<p>I'm here in this forum quite a bit early I realize, but there is so much to learn, figure out, and plan for. </p>

<p>Good luck with figuring out how to finance grad school. Hopefully there will be GA opportunities to fund it.</p>

47

<p>mercymom:
MY D is looking at grad schools now and some schools seems to have questionnaires about residency and finaid which could consider a student independent...they ask questions like has the student been independent for 2 tax years, etc. I don't yet know how it will work out, but I thought I was done after UG and now I see my actions may affect my D. For example, my D is a resident of my "old" state and we (mom & dad) just moved. will she be a resident of her state or my state? I have not yet gotten a clear answer. It seems like she could end up being a resident of neither as they have different policies! So, don't relax yet.</p>

<p>One note ( no flames, no smoke ) on CalMom & GoalieDad's very interesting discussion:</p>

<p>All of us can likely agree that the system is flawed and that some one is just under the cut off and some one is just over the cut off for aid in a particular situation. All of us are likely annoyed to be on the hook for "full fare" and see some neighbor appear to game the system. </p>

<p>On the one hand, your neighbor could be telling an inaccurate (fibbing!) representation of aid- like all the people who tell you they got a full ride to an Ivy when we know there is only need-based aid, not a true full-ride scholarship available to all.</p>

<p>On the other hand, some people luck out by their irresponsibility. My brother and sister are examples. They have similar income, he lives in SoCal, large home value, he is not financially smart and continues to refi over & over and take out and spend the increased home value $. My sister in a small town was a waitress and so has scrimped and saved since the early 1980s, buying and paying off a couple of small homes......she now has 3-4 properties, the sum total of which are similar to my brother's one home value. This is her self-proclaimed retirement fund. On the FAFSA her assets are hit much harder than his, even though the total is similar and it really is her retirement.</p>

<p>I think we can all find places where some one we know of is "making out" on a system which is not treating our family in the same way. They have to come up with a system and life is not fair, so it is not going to be fair and reasonable to all.</p>

<p>After 6-7 years on these forums, I think we all have had an epiphany moment when we realise the system has inherent unfairness built in and when we rail at the fates that it works against our personal situation..........could it be that CalMom is simply more resigned to her fate and GoalieDad is still chafing at the unfairness of it all.</p>

<p>It does not seem "fair" that some of my D's friends can attend an Ivy type school on full financial aid when they are not so very worse off than I am, but apparently it was in the right places, whereas my kids are dealing with the big state school issues, because I have home equity which counts in Profile. There are many ways to look at it, but I cannot reasonably finance the private education and some one with a little less can.....but, that is the breaks of the game and I am over it (mostly!) and dealing with life as we know it now and am grateful for the merit, etc. that has come our way.</p>

48

<p>Thanks, somemom. This is kind of what I meant by "everything happens for the best". Sure, there will be decisions whether they are admit/deny, scholarhip or none, FA or very little, that are going to initially sting quite a bit, and may push you down a different path when they happen, but in my experience (and this also includes job setbacks) you usually wind up where you belong and not necessarily for the reason you were initially focused on.</p>

<p>Like I said earlier, D2 actually got one of those EFC adjustments but decided to go to a different school where she is so happy she might burst. Pretty much everything is going great (nothing's perfect). At the opening convocation (we attended), one of the speakers told us her own life story and concluded with this twist on "opportunity":</p>

<p>"Opportunity rarely knocks; it is usually standing on the side of the road waiting to be noticed. And it is often disquised as an unfair choice."</p>

<p>Good luck everybody! I just found out the GRE is changing just in time for D1. Now we have to choose whether to take the old one or the new one. See? it never ends.</p>

49

<p>(On the military recruitment issue):
[quote]
I wouldn't be quite that cynical, but it is an interesting coincidence.

[/quote]
As the parent of a daughter, you probably are not as painfully aware as I am that the first thing a boy encounters on filling out the FAFSA is a requirement to register for the draft, and an offer to do it automatically for the kid if they grant permission.</p>

50

<p>I am well aware of that requirement, Calmom, and have all kinds of things to say about it (which I won't, since it is the wrong time and place).</p>

51

<p>The point is, I think the financial aid system is clearly built around a social agenda to support the military (among other things). One of the major draws of the military is promised educational benefits. It's a powerful draw -- my own son is too crunchy for that, but he's signed on with Americorps with a definite eye on the educational funding benefits that come with the job.</p>

52

<p>How reliable are the EFC calculators on <a href="http://www.collegeboard.com%5B/url%5D"&gt;www.collegeboard.com&lt;/a> and <a href="http://www.finaid.org?%5B/url%5D"&gt;www.finaid.org?&lt;/a> Did anyone use it to help you decide how much to save?</p>

53

<p>I agree with somemom and mercymom. Many of the "setbacks" I've had in my life have been, in retrospects, blessings. The things we think we want at a young age, or even an older one, may not be the best for the total picture of our lives.</p>

<p>I think back to some of the guys I might have married in my early 20s if they'd been so inclined; now I'm incredibly thankful they weren't. Jobs I didn't get, schools that didn't accept me...it's all worked out really well; maybe better than if I'd gotten my "first choice" on everything. JMO...</p>

54

<p>The FAFSA methodology calculator at finaid.org is very accurate, assuming you enter data accurately. </p>

<p>However, as I noted above, the colleges can change the data for FAFSA on their own with the financial aid calculation. They might do this is by going over your tax return and adding something back to income, or adding an asset. This typically happens with self-employed individuals -- some colleges routinely add back some of the writeoffs seen on a schedule C, like car expenses or depreciation. So a college can arrive at a different FAFSA EFC by the way it adjusts the data. </p>

<p>The Institutional Methodology calculator is a total crapshoot. That is because there really is no such thing as "Institutional Methodology". CSS Profile sells a service to colleges which includes computer software to handle data/info in a certain way, but the colleges can make their own determination as to how to handle everything. My IM is from the online calculators is about $33K if I enter in the equity based on market value of my house that I got from an appraisal 2 years ago.... but many colleges are capping the home equity figures in some way. My daughter's college uses a maximum value derived from my original purchase price and year of purchase, which can be determined from another calculator on the finaid.org web site. </p>

<p>Also, most of the colleges that are in the match/safety category probably do not promise to meet full need, so when it comes down to it, it really doesn't matter what the calculators say. Those colleges tend to leverage aid giving stronger packages to the students at the top of their applicant pool, lower packages to those at the bottom.</p>