<p>Here is the situation: My parents have just started making a steady income, giving us an EFC of ~40k a year. Considering my parents have only been at this income level for a few years, we have a high amount of consumer debt, a high amount of debt on mortages, and we are essentially in a pretty big financial hole. However, only a couple colleges I'm applying to look at this component of the Supplemental Questions on the Profile. I am trying to convince my father to describe our debt in the section where you can write in extra information (I forgot exactly what it is called). However, he believes that describing the debt will convince colleges we are poor "money managers", thus reducing the amount of aid colleges will provide. I was under the impression that more debt would be a good thing, in terms of recieving more aid from colleges. Essentially, I am wondering if reporting debt in the written portion that would otherwise go unseen by colleges would increase or decrease my aid provided.</p>
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Considering my parents have only been at this income level for a few years, we have a high amount of consumer debt, a high amount of debt on mortages, and we are essentially in a pretty big financial hole.
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<p>Consumer debt is not taken into consideration by colleges in their financial aid formulas UNLESS there is some extenuating circumstance (loss of income, high medical expenses, etc). Consumer debt, mortgage payments, etc. are just not considered. Consumer debt is considered a choice. Everyone has some kind of living expense (rent or mortgage). </p>
<p>You can try to discuss your debt situation with your colleges. Perhaps they will work with you. BUT this would be at their discretion.</p>
<p>Unless the debt is due to an illness and medical bills, it's highly unlikely colleges will factor it into your aid. Everyone gets to choose their home, car and what the buy and what they save. In a sense, your father is right, but your aid probably won't be impacted by disclosing the debt or not disclosing it.</p>
<p>College is not the next thing to go in debt for. Choose one you can afford. And check out the "EFC $25K, HA!" thread.</p>
<p>Thanks for the replies!</p>
<p>How about educational debt? (e.g. my parent's student loans) Is that considered a "choice"?</p>
<p>Debt is debt. It is not considered in the financial aid formulas as far as I know. I don't believe even your parent's college loans are considered in the financial aid formula.</p>
<p>The only time debt is taken into consideration that I can think of immediately are is mortgage. Because you do have to list family assets, any debt taken against the asset lowers the market value. If your parents have a HELOC, it may be a good idea to pay off other debt with that credit line, as it would reduce the market value of your home. Do check out this option with a financial advisor/accountant as you should any financial advice you read, as things other than college financial add may be in play and your individual/family situation may have issues.</p>
<p>I'm not sure it's 100% true that schools don't look at consumer debt, although it's probably close to 100% true. I know that when I do the CSS Profile for my son, his school does have a question in the special supplemental questions portion where individual schools can ask for infomation not already covered. They ask directly about credit card debt. I don't know how they use that information, but they do ask for the amount of credit card debt you have.</p>
<p>Some schools ask how many cars you have and what kind and what year. Son's school does not ask about cars, but they ask about credit card balances.</p>
<p>As far as the original question, aaron981, I don't know what the effect of describing the credit card debt would have. I doubt that colleges would look at it and make quantitative adjustments based on subjective assumptions about whether a student's parents are "poor money managers." If a large portion of the debt is medical debt, or taking care of an elderly grandparent, or due to some kind of accident or act of nature... those things might be good to explain.</p>
<p>I know when I filled out my son's CSS Profile this year, I just listed the amount of the credit card debt, but didn't go on to explain it. I mean most of it is stuff like not being able to make ends meet sometimes and having to put groceries on it, paying for my son's plane ticket to come home from the college for Christmas, expenses of trips he and I took in 2007 to visit colleges, and also from a two-month seasonal lay-off my husband has every year when we've had to lean on the credit card to get by.</p>
<p>I just didn't think those things were first of all, worthy of asking for some special adjustment (as if one was even possible, I don't know), nor are they easily proveable. So I just answered the question asked, but didn't try to rationalize it. It certainly wasn't for clothes or dinners out or any kind of excess... it's just the debt that happens when a family of four with two kids in college can't quite make ends meet.</p>
<p>I always <em>wished</em> they'd ask us the car question. I'd love to let them know we own only one 17 year old sub-compact with the trunk wired shut. ;)</p>
<p>I don't remember a question on credit card debt when I filled out my son's 3 years ago. When I brought it up with a FA office, they said if they gave more money for C card debt, they'd run out in minutes! Maybe a slight exageration, but I got her point. She also said, "life style choices" were not their concern either. If a Mom (or Dad)stayed home for a few years to take care of their children or worked part time(good day care can be too much for some)that wasn't their concern if you couldn't save over the years. If half your salary went to day care, again, they go on your yearly amount, not what you paid out unless it was unusual. If you were laid off, had a very large amount of debt from an illness, fine, but they just can't weed through so many other "in-between" issues. My 2000 dental bill wouldn't cut it but a 10.000 bill from a chronic illness would. Well, I like honesty and although like other posters, my debt is mainly replacing costly home items, car repairs,etc. I know they don't care. I also have a dented, 11 year old van, haven't had a vacation in years, but fall through the cracks with income/savings.</p>
<p>Schools can individually ask supplemental school-specific questions on the Profile. Last year son #1 was applying to several schools with large endowments and the Profile had several special questions on it (Among others we had the car question (but not the credit card question)). This year son #2 is not applying to large endowment schools and I did not see those questions when I completed his Profile.</p>
<p>Yes, it's those institution-specific supplemental questions where you'll sometimes see questions about cars or about credit card debt. Like I said, I have no idea what my son's school does with that information about credit card debt... I only know they ask about it.</p>
<p>The Supplemental questions on the Profile include things like cars, consumer debt, value of retirement accounts. And it varies from school to school. Some schools don't ask any supplemental questions. Others ask them all. No one really KNOWS what they do with this information.</p>
<p><<i'd love="" to="" let="" them="" know="" we="" own="" only="" one="" 17="" year="" old="" sub-compact="" with="" the="" trunk="" wired="" shut="">></i'd></p>
<p>My 18 year old car's trunk doesn't open with the key, but I can still flip the switch inside the car to get it open. Always afraid of locking something in there permanently!</p>
<p><<my 18="" year="" old="" car's="" trunk="" doesn't="" open="" with="" the="" key,="" but="" i="" can="" still="" flip="" switch="" inside="" car="" to="" get="" it="" open.="" always="" afraid="" of="" locking="" something="" in="" there="" permanently!="">></my></p>
<p>We're luckier than you. ;) We don't have a switch inside the car that opens the trunk... however, we can untwist that wire from the outside if we need to open it! Actually we can't lock the car at all, the key won't even work in the door. It's okay, nobody would want to steal it, plus we live in a small town and car theft is a rare and remarkable event.</p>
<p>That old banger of ours, however, just keeps running and running and running. It looks like a heap, but it's a great car!</p>
<p>I live in a neighborhood where any car is fair game. I had a 1986 Buick regal stolen in 1995. Ever since then, I have a club. A few years ago, not in front of the same place, I had my car parked in front of my house and someone broke the little triangle shaped window in the back, got into the car, popped the hood and stole the ignition wires. Yes, the club was on and no attempt to steal the car was made. heck if they had just knocked on my door I'd have given them the $20 buy new wires if they'd have forgone vandalizing my car!</p>
<p>I park in the driveway now. It looks amazingly good for its age and it just keeps running. Insuring cars is very expensive around here so not having comprehensive and collision is a big money saver and since I only drive about 1000 miles a year, I'm keeping this car forever :-)</p>