<p>Please bear with me in my ignorance! First child applying early to a few colleges. Noticed some schools have no merit based scholarships. Spouse is military and friends have already told us expect around a $30k patent contribution. Now if we look for scholarships on our own and child gets any awarded, do those get subtracted from the patent contribution? For schools with no merit based scholarships would we then be responsible for entire $30k from our funds?</p>
<p>And if you apply early and find out in the next few months if accepted, you won't know what the colleges will offer financially until you complete the FAFSA and hear back next year right? So students who agree to the acceptance now have no idea what they will owe? Guess I'm hesitant to have my child say yes without knowing what the price will be.</p>
<p>Thanks,
Rachel</p>
<p>Autocorrect sorry. I meant parent contribution.</p>
<p>Good question!</p>
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<p>No, not usually.</p>
<p>This is how it works.</p>
<p>If a school costs $60k, and after they look at your income, assets, etc, they determine that you should pay $35k per year, then that means that you have $25k of need.</p>
<p>If your child gets an outside merit scholarship of $5k, then that $5k gets applied to NEED, and you still pay $35k.</p>
<p>The only ways to “reduce” your EFC are these ways:</p>
<p>Attend a school that costs less than your EFC.</p>
<p>Get a HUGE (really big!) merit scholarship that not only covers all of need, but is so big that the leftover merit can cut into EFC.</p>
<p>So, if the school costs $45k, and your child gets a full tuition merit scholarship for $30k, then the remaining costs would be $15k…and you would have greatly reduced your EFC.</p>
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<p>I wouldn’t trust that info. Schools may expect you to pay $50k+++ or they may expect you to pay $20k. Different schools have different aid policies…some very good, some very bad. </p>
<p>If you are concerned about cost, then have your child ALSO apply to some schools that will give ASSURED VERY large merit for stats…those would be your financial safety schools. </p>
<p>If your goal is to pay $15k per year, then a full tuition merit scholarship is needed to have that low of a net cost.</p>
<p>Autocorrect sorry. I meant parent contribution.</p>
<p>Thank you that is the best explanation yet. Our child has already been offered a four year full ride tuition merit scholarship from a top 100 university because he is a semifinalist National Merit Scholar but unfortunately that school is not on his radar! He also got a 35 on his ACT but is interested in a few Ivy League schools too who don’t have merit based aid. I’m guessing the money we were saving for a dream house will go to college if he does get into an Ivy League? Sometimes I feel like we will be punished for saving and being extremely frugal the last 30 years where another family with same income spent all their money and have nothing to show for it, will get plenty of need based aid. Or am I looking at this all wrong?</p>
<p>Why does your child have to attend an Ivy League school if it is not really affordable for your family?</p>
<p>I would suggest you run the net price calculators for these schools. See what they come up with for net prices…then go from there.</p>
<p>If you have financial considerations you might want to consider applying regular decision so that you can compare financial aid and bottom line costs at multiple schools.</p>
<p>And…those Ivies require the Profile in addition to the FAFSA (except Princeton which uses it’s own form). If your child is applying early to any school, they need to check the priority deadline for early applicants…if the school has one. Many do. And it’s coming up!</p>
<p>There are a number of schools that give large NMF scholarships. And some have MANY NMF and high stats students attending. Even if they aren’t on your child’s radar (right now), that doesn’t mean that they shouldn’t be given a good look and become financial safety schools.</p>
<p>Which NMF school do you know about with big merit? Again, there are a good number that give large awards. </p>
<p>I think you should determine how much you want to pay and tell your child that if he gets into a top school and the net cost is that amount, then he can go. If the school expects a good bit more, then no. </p>
<p>The top schools have a parent contribution and a student contribution. the student amount is usually earned thru summer work. The aid can be a combo of grants, work study, and maybe student loans. </p>
<p>The first $45k (approx) of your assets are protected. Anything above that amount is assessed at around 6%, so really those who “spend it all,” but have the same income don’t have a huge advantage…unless you have a TON saved in non-retirement accts.</p>
<p>HYPS give super aid, so those schools may be surprisingly low if your son gets in. 
Other ivies and and top schools don’t have policies that are that generous. </p>
<p>How much do you want to pay each year?</p>
<p>How much in non-retirement savings is earmarked for the dream home? Is your current home mortgage-free? Have you considered FAFSA only schools and buying the dream home before you file the FAFSA next year to drain all savings above the asset protection amount?</p>
<p>Are there younger siblings?</p>
<p>Is retirement in the near future?</p>
<p>Wow some things to think about! I did say some of his schools are Ivy League. Son is interested in top engineering schools. Univ of Alabama offering generous scholarship but their engineering school ranked #112 I think. MIT, Mines and Univ of Colorado recruiting him heavily. We still move with the military so can’t buy right now. Over $500k in non retirement accounts earmarked for dream home upon retirement a few years away. Younger child considering also for college. We did save at least $20k per child per year. I just get nervous when I don’t know the final bill. Thanks for all your insight.</p>
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<p>Yup, that’s going to play a big part in any needs-based analysis.</p>
<p>$500,000 will add about $28,000 to your FAFSA EFC. This would be in addition to the amount calculated based on your earnings.</p>
<p>Just adding that there are some schools that will use outside scholarships towards the “student” or “self-help” portion of the bill before subtracting from and need-based grant. This can help a kid who was going to need a student loan to cover all or a portion of self-help. Doesn’t help you as the parent but something to look at if it ends up pertaining to your situation.</p>
<p>Oh Lordy…there goes the house…unless he gets big merit based aid correct?</p>
<p>And that $28k obviously per year?</p>
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<p>Yes, as long as you have half-a-million in non-retirement investments.</p>
<p>Wonderful. Will keep fingers crossed that our bright student can pay a good chunk then. We won’t have that chance with #2 and at this point hope he won’t spend the rest of his life in our basement:-) Funny how two children can be so very different!</p>
<p>I know it won’t do you much good now, but I’m wondering if this could have been at least partially avoided by making Roth TSP contributions to the maximum extent possible instead of saving in a non-qualified investment. A Roth TSP account would not be considered in a financial aid analysis; a lump-sum distribution of contributions (say, for a new home) would be tax free (although it would be considered income in the year taken, so better taken after any kids are through junior year of college); and a distribution of earnings of up to $10k would also be tax and penalty free if used for a first-time home purchase (liberally defined).</p>
<p>If you have been saving for years to buy a house…then use the money to buy a house. </p>
<p>There should be more affordable options for your kids. They don’t have to attend colleges that cost $60,000 a year. They don’t.</p>
<p>Even military folks have a state of residence. What is yours? What public universities are in that state. </p>
<p>And if your kiddo truly is a competitive applicant for Ivy. League schools, then he would also be a candidate for some good merit awards elsewhere. </p>
<p>Did you say you had $20,000 a year in college savings per kiddo as well? If so, that $20,000 plus a $5500 Direct Loan, plus some student earnings will come very close to paying for an instate public university, most likely. And if your kiddo gets a merit award someplace that pays full tuition…and that might be possible, your $20,000 should cover the remaining costs.</p>
<p>And then you can buy your house as well.</p>
<p>Do your children get any military benefits for school? Some schools also have Yellow Ribbon to contribute to the cost that is not paid by the GI benefits.</p>
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<p>Many states have rules that give in-state tuition to dependents of active military, even if the state the military member is stationed in is not their state of legal residence.</p>
<p>ALSO: If OP’s spouse is eligible for the Post-911 GI Bill, those benefits (which are very generous) may be transferable to dependent spouse and children, depending on a variety of circumstances.</p>
<p>Ok thank you and I appreciate all the responses. I wish I had learned about all this years ago! In our military moves we have bought and sold a few modest homes so wouldn’t be eligible for any first home buyers assistance. I guess the good thing is that Obama signed a generous va bill into law a few months ago making ALL 50 state public universities in state tuition for military families. The only catch is that you MUST use the GI Bill which we’ve already split between the two kids. I’m assuming the GI bill money gets taken out of your financial need.</p>
<p>Like everyone else we will make it work but wouldn’t it be great if someone offered a College 101 class when our kids were still little? We knew to put money aside into 529s and other tax free educations savings accounts before that but that’s basically all we did. So much still to learn…</p>