Blended families and financial aid strategies

Paying for College
1

<p>Looking for any and all guidance on how to approach our financial aid applications:</p>

<p>I am Mom to 2 kids, one a high school senior, the other a freshman. Their father and I divorced and their father subsequently passed away. There is no child support (only SSA survivor benefits that expire when each turns 18). Son has a custodial brokerage account ($10k) and custodial 529 ($50k). I also pay a private school tuition for my daughter. I work full-time and my income is $150-180k annually. This may seem like a lot but after mortgages, bills, tuitions for both kids, etc, it doesn't got as far you (of the EFC calc) thinks. I have saved a little bit in 529s for both kids (~$8k each). The bulk of my savings is in retirement funds. I'm also a homeowner with zero equity.</p>

<p>I am also remarried. He also has 2 sons, one is a high school senior and one is a freshman. Husband's income is negligible (<$30k) and goes entirely to his child support obligation and his own expenses. While he shares custody with Ex-wife, both kids live with their Mom, who is recently unemployed. In his divorce agreement, he will be responsible for 50% of his kids' college expenses.</p>

<p>The challenges I see are as follows:
1) I'm supporting the entire household. I'm having a hard time accepting the EFCs I'm calculating. I don't know where that extra $45k is that they think I have.
2) My income in 2014 will see a significant bump because of a one-time long-term incentive payment, that isn't recurring. I think this will distort the FAFSA when I report my 2014 income.
3) My husband's ex-wife can't afford to pay for college for her son and will be applying for financial aid as well. I anticipate that she will expect our financial information (we file a joint return) as part of that. I don't want any of my income (which is 90% of our annual income) to be considered as "available" to pay my step-son's tuition, nor do I want my husband's income to be viewed as "available" to pay my son's tuition. This is something we both have agreed to.</p>

<p>How should we approach the FAFSA as well as any request for a Review due to Special Circumstances?</p>

2

<p>To address your challenges:

  1. The EFC formula puts the most weight on current income. The expectation is that families will pay for college using past (savings), current (job), and future (loans) money. Everyone has financial obligations, and everyone is put through the same formula - so while your EFC seems high, it is similarly so for those with lower incomes.
  2. You can appeal to individual colleges to ask them to remove the one-time long-term incentive payment from your income - that may or may not make any difference in the aid offered to you. You would need to appeal separately to each school, following their appeal process. Schools do not have to adjust the income; some may, some may not.
  3. The ex will not need your financial info unless her kids are applying for aid at a school that requires non-custodial parent info (it’s only a handful that do). As for your H’s responsibility in terms of his income being available for your kids, you do not have to ask him to chip in … but the expectation in the financial aid world is that his income is available for that purpose. </p>
3

<p>You need to have a nice long talk with your high school senior about what you can afford to pay. It may be necessary to remake the college application list.</p>

<p>Your husband needs to have a nice long talk with his own high school senior about what he can afford to pay (given that the mother is unemployed and can’t pay anything right now). That college application list might need to be remade as well.</p>

<p>If the truth is that one or both students haven’t been thinking at all about affordability, then remind them that gap years aren’t bad things. They may prefer to take a year off, make some money of their own, and revisit their college lists later on.</p>

4

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Ask your h.s. senior to apply for large merit-based scholarships.</p>

5

<p>At an income of $150,000 a year, your family contribution will be in the $35,000 to $50,000 a year range. Unless your two HS seniors are tippy top students applying to colleges with extremely generous need based aid policies, it is likely you won’t get much need based aid…at all. </p>

<p>And while there are two seniors, only one is a member of your household…so you will get on’y credit for one in college at a time.</p>

<p>I think you need to figure out exactly what you CAN afford to spend on college costs annually. Once that budget is set, you need to discuss it with your kiddo, and your husband needs to discuss his finances with his kiddo. No question. Finances need to enter into the picture.</p>

<p>Colleges assume that you are paying out of past income (savings), current income, and future income ((loans)…not just out of current income. The EFC is calculated based primarily on your current income, and yours is really quite high. I think you already know that.</p>

<p>I hate to suggest this…but is there any chance your current husband can supplement his income in some way…to at least help with college costs, and expenses? Maybe he can pick up a part time additional job.</p>

<p>You should,look at the pinned threads above about scholarships. There are two noted threads in them…one about guaranteed merit awards, and the other low cost college options (<$25,000 a year total cost). I would urge you to read those.</p>

<p>I am unclear about the private school costs for your daughter. Is she the one who is a senior? If so, you won’t have that cost and that money can be diverted to college costs. If she is not the senior, and is the private school a necessity (it might be). If not, perhaps,that should be reconsiderd in light of your financial issues.</p>

<p>And lastly, many kids start out at local colleges to which they can commute easily. This saves miney for a couple of years…and then the larger costs can be spent on Jr. and Sr years at a four year college when the degree is earned.</p>

<p>ETA…past posts seem to indicate that your daughter is at Miss Porters School. Perhaps this needs to be evaluated. It sounds like tuition money is going there which could be used for college for the current HS senior.</p>

6

<p>OP:

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<p>OP:

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<p>thumper1:

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<p>Hmmm… we all make choices. For this academic year, Miss Porter’s School costs over $54,000 for boarding students. (Over $43,000 for day students.)</p>

7

<p>the D goes to Miss Porter’s?
Well, that’s a luxury choice.</p>

<p>how much is the tuition for Child #1? Can’t THAT money go towards his/her college costs?</p>

<p>Mortgages plural? Do you own more than one home?</p>

<p>You say that your H makes less than $30k and all of his take home goes towards his expenses and child support (with an income that modest, how much could his child support be?)</p>

<p>And I agree with Thumper, the H should consider looking for a better paying job…otherwise YOU will likely be paying the “half” of his kids’ college costs. </p>

<p>If his kids go to FAFSA only colleges, then his/your income won’t be used.</p>

<p>If his Ex wife can’t pay half of their kids’ tuitions, how can she expect/demand that your H pay his half?</p>

<p>If the parents don’t want to pay or can’t pay, then they need to encourage their kids to look at SCHOOLS that give HUGE merit for stats.</p>

<p>How much do you think you CAN pay per year? </p>

8

<p>Your kids’ need-based financial aid will require only your household’s income and assets.</p>

<p>His kids living with his ex-wife may find that many schools’ need-based financial aid requires his (i.e. your) household’s income and assets as well as his ex-wife’s household’s income and assets.</p>

<p>Schools which use FAFSA only count only the parental household in which they live, but most schools with good need-based financial aid also use CSS Profile with non-custodial parent information, expecting the non-custodial parent to contribute in the financial aid calculations.</p>

<p>If you will not be able to afford to support all four kids’ college costs, then advise those kids to look for schools with large merit scholarships that their academic credentials will get. Your husband’s kids can also look for schools which use FAFSA only or otherwise do not use non-custodial parent information.</p>

9

<p>Your son’s SSA will continue until he graduates from HS or turns 18, whichever is later, but at that time your daughter’s payment should go up (unless your ex had other children). It won’t be double, but it will be more.</p>

<p>I understand your concern, that you are supporting a lot of people, but you are still going to be expected to pay for most of their college. Most schools don’t care about tuition for private school for younger children (a few do take it into consideration). Still, you are looking at an FAFSA with $200+ in family income, so you’ll get nothing but loans off of that application.</p>

<p>Your husband will be in a better position for his child if his ex really has no income and no assets, AND his child picks a school that can be paid for from Pell and state grants. If that child picks a CSS school, all income from all parents, including step parents (you) can be considered.</p>

<p>It’s time to help your child fall in love with an affordable school. If he is a good student, go for merit.</p>

10

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<p>Just in case you haven’t mentally processed it yet, your personal agreements are not considered for the financial aid formulas, it is a separate issue what your families make available to each other. First since you are married your family income is counted for kids in your household (regardless if you file jointly or not.) So your aid for your kids will be based on combined income. They will also ask how much is paid out in child support and the ‘loss’ of those funds will be part of the formula.</p>

<p>For his kids the mother’s income only is used for FAFSA since that is their household. It will also take the incoming child support into the formula. If those kids are going to apply to colleges that ask for more than the FAFSA (privates, usually) then the non custodial parent income will likely be taken into account. I think it is usually the entire household income of the other parent. Some schools will allow you to not consider the noncustodial parent spouse income. I don’t know how you separate that out. That is getting over my head.</p>

<p>So that is how the amounts will be determined. Who pays what in is between all of you. It is an individual decision what the parents can pay for, if the students takes their federal loans to help, trying to target lower cost college, merit aid etc. It isn’t unusual to not be able to afford the expensive colleges, that is pretty common. For the husband’s kids, getting aid depends on being savvy about applying to colleges that give it for their academic profile and income according to the data the school collects.</p>

<p>Since you each have seniors you will have to very quickly ramp up on searching, maybe the financial aid FAQ will help with full understanding. The parent or kids can also post for searching for colleges for their stats.
<a href=“Financial aid FAQs - Financial Aid and Scholarships - College Confidential Forums”>Financial aid FAQs - Financial Aid and Scholarships - College Confidential Forums;

11

<p><a href=“Links to Popular Threads on Scholarships and Lower-Cost Colleges - Financial Aid and Scholarships - College Confidential Forums”>http://talk.collegeconfidential.com/financial-aid-scholarships/1678964-links-to-popular-threads-on-scholarships-and-lower-cost-colleges.html&lt;/a&gt; is the thread with pointers to lists of merit scholarships and low cost colleges that your kids and step-kids may want to consider in order to find affordable choices without depending on need-based financial aid.</p>

12

<p>Since the H’s ex-wife is unemployed, how is she supposed to pay half tuition? I doubt only the H has that obligation. I’m guessing that when one parent can’t pay that lets the other one off the hook? or am I wrong? </p>

13

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<p>What does the court order say? Half of ANY college? even privates? or half of an instate public? I can’t imagine that your H and his attorney would have agreed to half of ANY college considering he makes a low income. Has your H talked to his ex to find our how SHE is going to pay her half? If she remains unemployed or becomes under-employed and can’t pay her half, that order will be worthless. I would make sure that whatever aid the step son qualifies for is not construed at being “her contribution”, keeping your H on the hook for paying real cash. </p>

14

<p>Re: the one time additional income in 2014. Any chance that can be used to help fund college costs? After all, one time…so it’s not like the OP is “used to” having that in her income flow.</p>

<p>I would strongly suggest that the mom’s kiddo look for colleges where merit aid potential is either guaranteed or very high. </p>

<p>But better get cracking! The deadline for applications for admission, and in some cases an application for scholarships is usually December 1. </p>

<p>The OP needs to understand that BrownParent is correct. She can’t wish away her high income. And the choice to pay private high school tuition is a choice…a choice. Colleges aren’t going to take that into consideration at all.</p>

<p>ETA…the OP had the SAME questions with regard to completing the application for prep school financial aid. OP…how did that turn out?</p>

15

<p>The OP’s title says it all…“blended families”…that’s how colleges look at the situation. Blended…blended everything…your income blended with your H’s income.</p>

<p>I would have H tell his exW and senior child not to apply to ANY schools that use NCP info, because that will mean little to NO AID. </p>

<p>And, I would get clarification in regards to whether the court-order is for paying half of an instate public…and what happens if the exwife can’t pay her share (Is the exH still obligated?). I’m still shocked that such a court-order was even given when you consider how low the H’s income is. </p>

16

<p>Yes my daughter attends MPS thanks to generous financial support from the school. My financial priorities are retirement and education, period. We don’t live in a fancy town, or have a showcase house with new cars and we don’t pay for vacations. But I do live in one of the most expensive areas of the country (New England). We invest in education. The divorce really screwed me financially and so does the IRS tax code. I pay more taxes (as in $15k more) married than I would have as Head of Household. However, modeling healthy marriage is important to our kids, rather than just living together for the rest of our lives. However, in hindsight, I’m learning that it would have been better financially for me not to remarry. Everything about this financial aid process for both our sons suggest we shouldn’t have legally connected ourselves. If required, my husband’s financial information will include mine because we file jointly. Therefore it may appear as if we can contribute more to my step-son’s costs. Whereas it’s going to pay for my son’s, with some austerity and discipline on my part. </p>

<p>Yes my bonus awards will be used to fund their 529s after paying off some debt. I guess I was hoping to hear here that there are some tactics such as a carefully worded letter that might help provide a more accurate picture of our financial situation.</p>

<p>Incidentally, my son’s top choices are UVM, Colorado and Syracuse, and we don’t live in Vermont. I’d rather have him attend a school that suits his interests and abilities than go bargain-hunting for “college degree”. Regardless of what people say, it still does matter WHERE you go, once you graduate. 15, 20, 30 years later it doesn’t. But it does for that first job.</p>

17

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<p>UVM is a good school (and Burlington is a great city), but it has a pretty high cost for OOS students, compared to other state schools. However, they do provide merit money to top performing OOS students, so that can soften the tuition blow.</p>

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<p>I’m somewhat surprised that Miss Porter’s has provided “generous financial support” to your daughter, considering your $150k-$180k annual income. And if you’re talking merit money, according to the school’s website, that’s likely no more than $10k/year, max.</p>

18

<p>OP - it’s probable you’re asking the wrong question. It’s unlikely your kids will receive much in the way of financial aid. You need to figure out what your tolerance is for loans for you and your kids. And then, most importantly, you need to figure out how much you’re willing to pay. </p>

<p>In all likelihood there are good, affordable schools out there that your kids will be happy enough to attend. You can bemoan the unfairness of the FA system or you can work within it to maximize the advantage you do have, which is presumably desirable kids with upper middle class resumes and stats. </p>

<p>I’d suggest approaching the college game the same way you would approach buying a car. Of course many of us would love the Lexus but we know the Camry is the best choice for our budget. And if the Honda dealer up the street will sell us a similarly equipped Accord for five thousand less, suddenly the Camry looks pretty dumb too. </p>

<p>Good luck. There’s a lot of info and experience here on CC. Im sure you’ll be able to find great schools for your kids. </p>

19

<p>As Halfemptypockets says, you can’t always get what you want. Many of us on CC have had to send our kids off to colleges that were not their first choice ( it ain’t any easier to send a kid off to college on my $38K gross income, let me tell you). Yes, it might temporarily break your son’s heart that he can not go to UVM, Colorado or Syracuse, but odds are VERY high that he will be perfectly happy once he knocks any chip off his shoulder and settles into a school (there are threads to that effect on CC). </p>

<p>One of my daughters had to go to her least favorite choice, and a school that does not have a great reputation at all. It was the only school she could afford to attend. But she finished second in her graduate program (combined undergrad and grad track major), did well on the professional boards, and now has a job she loves in her first choice of location. </p>

<p>No carefully worded letter is going to impress a financial aid board to give you the kind of discount that you are looking for. There are more hard-luck stories than there are funds available. </p>

<p>What kinds of grades/scores do the two boys have? What majors are they looking at? We might be able to suggest some schools (for example, with good stats an out of state engineering major can get very generous scholarships at Alabama). With good grades they can get MERIT scholarships that have nothing to do with financial aid.</p>

20

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<p>What are his interests and abilities? Has he even looked at the lower cost schools to see if any are suitable? Do not assume that lower cost automatically means inferior. It is not like Vermont, Colorado, and Syracuse are top-prestige schools whose names will be that helpful in getting hired into school-prestige-conscious jobs like management consulting.</p>