<p>my wife is an only child, so our 2 kids are her only grandchildren. she is 86. her husband, a wonderful modest man, salt of the Earth, passed away in October. his will / their will states my wife gets 4/6ths of estate and ea grandchild gets 1/6th. currently the estate is worth about $800K Grandma, also a very fine woman who we all love very much is a tuf cookie and I wouldn’t surprised if she lives another 10 years. she’s talking about selling her house ($300K?of that 800) and moving into an assisted living community and is concerned with her own welfare. so we know that at some point we’ll have some money to pay down whatever loans we get into, but I’m concerned about making loan payments now, and or when they both graduate in 4-5 yrs. We want to be responsible but also mindful that significant resources are likely available, but not necessarily immediately</p>
<p>@mom2collegekids- Ok. Thanks for confirming. This is what I thought, but I could not find the answer. $27,000 is all that we plan for in loans for her. We will cover the rest. She is going to Penn State. The other schools were too much even with merit aid.
I’m already researching colleges with merit aid for the next one that will be going away in 3 yrs.</p>
<p>OP, there are a lot of issues here, beyond your mother being able to “afford” to pay for anyone’s education. I have two grandmoms here, my mother and my MIL. My MIL is well to do. For her to enter any good nursing home around here costs $10K+ per month. They want 5 years of payments up front and then she would be eligible for Medicaid and her cost would only be what her social security check is. The nursing homes do this because they are integrated with the way the laws work for those who have means. If you have the money, you have to pay, and if you think college is expensive, you should take a look at the assisted living and nursing home price lists. The way it works with a lot of these places is that they do take some Medicaid applicants, but in order to qualify for Medicaid, you have to strip your assets down to a certain level. There is a 5 year look back, so that you can’t sign over everything and then apply for Medicaid. The nursing homes and assisted living places are very much in tune with how all of this works and know exactly how to milk every penny out of the elderly person, family and system. So you think she has a lot of money, and that it 's going to go to family, well, think again. I know many, many people who thought that way, and got zippo. The nursing home/assisted care got every penny. Your MIL really does not have that much money if she needs care and it will be stripped from her very easily. That is how the system works. You think college goes after every cent. The elder care has their own EFC, and I won’t tell you what I think those initials stand for there.</p>
<p>In your case, your student can borrow $5500 in loans from the federal government, wit the schedule that Mom2college kids provided. The way I look at it, college can be paid for by past, present and future earnings of both parents and child. What your DD has saved, what you saved, is one component. If you saved nothing, then it’s a problem because that means some major living changes if you are going to make this work. It’s much more difficult to come up with the present and future part of the earnings. You both have a rough row to hoe without a nice past earnings component in the form of savings. But basically, a quarter of what you and she have saved for her college can go towards her expenses. You then decide what you can cut in expenses and whatever from your income while she;s in college and put that towards the cost, and she needs to do the same. She needs to work this summer, and maybe find a part time job at school. You come up with a figure for that. You then look at what you can borrow. She can come up with $5500; that’s it on her own and the rate and terms are good. It would be fair, IMO if you borrow the same to match it, Maybe a little more. If grandma wants to give you what you are considering borrowing, that’s all gravy. And I don’t believe in this matchy match stuff among kids, grandkids whatever. I give as my situation is at the moment and what I feel like giving and that’s the right anyone has. I’ve seen this taken to the extreme, like with the speeding tickets that Mom2’s mother 's situation became We make mistakes when we give people money just as we do on other things and there is no reason to continue what was clearly a mistake. Forget fairness. Some people aren’t going to be happy anyways.</p>
<p>Penn State is about $32K a year. It will go up each year a bit, and getting off campus housing on the cheap is not that easy. In other words, beating freshman year costs is not likely, so you can count on this just about each year. Divide what you have put away by four, both you and DD and that’s part of the first payment right there, and you put that away for future years. Then you and DD discuss what she can earn this summer and in terms of a job for during the school year. Make sure she knows exactly how much discretionary spending she has in that COA number that you are using as the total cost for her to go to school, and that anything spent over that has to come from somewhere else since that is the budget. This is a very painful thing to have to cut back and stick to a budget. I hate it. But better she learn now and it’s something to carry her through the rest of her life. The loan of $5500 will be paid in two increments, half in the fall, and half in the spring and go directly towards university costs. </p>
<p>Then you have to figure out how you are going to manage the rest. PLUS interest rates are about 8% but there is flexibility in repayment. You can’t have past due amounts on your credit report that are over 90 days, I believe, to be approved. You might want to ask grandma if she’ll lend you or grandchild that money for half the interest rate, set up papers, and make the interest payments to her. Make it a bonafide loan. You can work with her on that. </p>
<p>But in terms of her finances, given her age, and possible future needs, you might want to see an attorney experienced in these things and get a consultation and learn how things work in your state and the federal rules about how long term care, Medicaid and and disbursements from someone’s accounts work. You should know this, given you have a family member in this situation. </p>
<p>I do think there are some individual circumstances that may work for rumrunner based on the way the estate is set up - maybe a loan directly from grandma. Lots of caution based on some of the input from other posts. </p>
<p>Overall for most situations, you cannot stretch into risky territory without possible consequences of those risks. For example, are you willing to take out loans against your home to pay for one college over another? What happens if someone loses their job? Grandparent or other relative/friend promises that do not follow through? It is better to go where you can afford and be able to sleep at night.</p>
<p>@PERplexD, I would think pretty hard before I blew all the college savings on kid #1, leaving almost nothing for kid #2. This is a really good way to foster resentment among siblings (still p***es me off that my dad did this 30 years ago with my older sibling, leaving only in-state options for kids #2 & #3 – and #1 was not a good student on top of that). I am not annoyed with my brother (not his fault), but still think my dad played favorites. If there is some way to split the savings more equitably, you should do it if you can.</p>
<p>I did just that. Blew our money on kid#1, with hope and prayer that it would work out. It didnt’. It was a risk we took and we lost out.My kids don’t resent it in the least, and they are insisting that they chip in for our youngest so he gets to choose where he can go and get all sorts of things they did not get. It all depends upon the personalities involved.</p>
<p>I think the bottom line about Grandma or other relatives promising help, is that you gotta look at it all as gravy. You decide what you can afford reasonably, and if grandma throws in some extra, it can go to pay off what have decided you were going to borrow… Or throw it into the pension fund. DO NOT count on it. I know a lot of sorry people that counted on inheritances that did not happen.</p>
<p>hi OP we were in this situation years earlier when we were told “not to worry about college” because grandparents had done well in the market. we made some college savings decisions of our own in light of those comments. fast forward from early elementary school to now (when we need the money). the number of grandkids has more than doubled (late families for sibs) and the money that was there was mostly lost in 2008. so…we did save but not as much as we would have saved if we were not counting on the ILs money. lesson to us…don’t count other people’s money…even a relative. even a wealthy relative. just saying…</p>
<p>Absolutely, don’t go counting other people’s money. And it’s even worse counting on it.</p>
<p>trust me - counting GM’s $$ makes me very uncomfortable. what she has been saying and what my wife has been saying has been irresponsible pie-in-the-sky let Daddy (God rest his sole) take care of everything and has messed with my 1st born’s expectations and #2’s as well. thankfully, this morning I got my wife to admit that community college within commuting distance might be what we have to settle for. this will be a crushing blow to my kids especially #1, and we still have at least 2 more accepted student receptions to go to … 
— we chatted again about why we weren’t able to save for college, both struggling art students, career changes, job loss, part time work, bills, mortgage, debts, asking parents for money over the years while still accruing debt, and you can’t save if you haven’t paid of your debt. in the past couple years from my side of the family I inherited some commercial estate with some cousins and we sold it, I got $86K and I used it to pay off our debt, taxes, tires, repairs, etc and I have $20K left but our A/C is shot and that’s gonna cost $5K so I’m down to $15K. My wife has about $5K, The kids each have about $5K. So debt wise we are in good shape, I feel. (thanks to my side of the family, but that well is dry now) Our combined household income is finally just over $100K and it took a long time to get there. if only we started having kids now!</p>
<p>FWIW, we ended up having D attend CC for 3 semesters while commuting and then transferring to her dream U. It saved us a LOT of money and allowed our finances to improve to the point that we could be more cheerful about he applying to transfer while S was still a student in private U. </p>
<p>If MIL has ONLY $800,000 and is in OK health but 83, I’d not COUNT on any of that money. Don’t understand how FIL could give your W 4/6 of his estate and your child 1/6 but MIL still has all of it. If she has all of it and needs all of it for her expenses, it could well be totally exhausted by medical and other expenses. My mom is nearly 85 and dad will be 90. They haven’t yet had huge medical bills, but many of their friends and relatives do have 24/7 care and/or assisted living situations. These can run into a LOT of money very quickly. To buy into one of the nicer AL homes is about $500,000 or more, PLUS monthly fees that are many thousands more. This does NOT include medical expenses that also tend to mount as people age, especially their last few years of life.</p>
<p>It is good that you and your kids are having realistic discussions about the prices of college and how much CAN be afforded, given current circumstances. It is a better idea to have these discussions BEFORE college apps go out, but much better now than later, when you have to pull kid out of school and have them transfer to cheaper U, along with HUGE loans taken while they were in pricier U.</p>
<p>Sorry, wish there were happier answers. FWIW, D really enjoyed the courses and instructors she had at CC. They also had fabulous food (culinary program there) and free parking, plus it was a very short drive from our home.</p>
<p>yeah, we have to clear this up now, for sure. the advice from the colleges she talked to is, ok to send deposit now and work out financing over the summer. those idiots. about the 6ths, we have 2 kids, she gets 4/6 they each get a 6th so 4 + 2 = 6 6ths …</p>
<p>But it sounds like the money (those 1/6ths you mention) will only to be distributed AFTER grandma has ALL her needs met, even if those needs and expenses exceed the funds left behind by grandpa. It makes no sense to ME to be dividing up something while the person (grandma) still needs funds and resources to live on.</p>
<p>Even though $800,000 may sound like a fortune, sadly, it is spent very quickly on medical and attendant care as a person ages, as well as daily living expenses (especially as investment returns have NO guarantees and can even LOSE money). Many long term care policies have caps of $1 million, just because otherwise, it’s hard to predict how high the costs will rise to. I’d really urge you to shift your family’s focus to the schools you and your spouse can afford and NOT count on grandma’s money. My great uncle lived to be 107, and the last few years, they needed a 24/7 attendant to live in the home and prepare meals to care for him and his wife; this scenario or assisted or care home living is increasingly common as people age. As was mentioned upthread, this can easily cost $10K/month or more, which dwarfs the cost of college (amazing as that is).</p>
<p>As was said upthread, if grandma spends any of it on you or your kids and later exhausts her assets, Medicaid will look back at anything she spent 5 years before and deny her application, leaving your family on the hook.</p>
<p>Do NOT listen to the school and do NOT rush to make any deposits until you have a CLEAR plan that you and your wife can afford WITHOUT any of grandma’s money. Of course, the colleges want the deposits and even more they want your kiddo to commit but they won’t be the ones stuck with huge loans to finance that will weigh them down. Remember, you have two kiddos, as well as your retirements and MIL’s future expenses that will have to be paid. </p>
<p>Bottom line, it sounds like it is currently GRANDMA’s money, not your W’s nor yours nor your kids. Grandma sounds like she’s not sure IF she wants to provide money and how much money she MAY wish to provide and when. It seems like a very wobbly foundation for making any solid plans and not something I would do to myself, my spouse or our kids (nor my parents or in-laws). YMMV.</p>
<p>My bff’s father left about 800k. It’s in the control of a very accounting savvy sister, who manages it well. Over the last 8 years of paying for the mom’s needs, they are down to just enough for the next few years of mom’s care. She’s now late 90’s. My principle is: if things work out to the maximum best possible, super. What you have to worry about is: what if they don’t? My friend will inherit little. </p>
<p>Plus, if something does happen and Grandma passes before both kids are out of college, that can have an impact on Wife’s and children’s assets, when find aid is calculated. </p>
<p>Regarding the 4/6 2/6 inheritance, please make sure you understand how this is set up. In my job, I set up beneficiaries on individual accounts and we would, for example, name the primary beneficiary as Wife At 100% and the secondary beneficiaries as Daughter at 4/6, Grandchild 1 at 1/6 and Grandchild 2 at 1/6 if that’s what the account holder requested. However, once the account holder passed away, the wife would inherit 100% and then she can name her own beneficiaries which may or may not be the same as the husband’s. Of course, if everything is laid out in a will or trust, the scenario can be more complex. But it would take some legal maneuvering for Husband to leave everything to Wife and still dictate what happens when Wife passes away.</p>
<p>I do urge the OP to get wife and Grandmom to talk to a certified fianancial planner, attorney specializing in this field or accountant. Or even someone at assisted care/nursing communities to explain how things work. My DH was shocked at the upfront payment that are required at a number of the better homes around here and how things work thereafter. and what one has to do to preserve any of one’s assets for inheritances. That five year lookback rule is federal as is Medicaid. Grandmom is of the age where this might come into play. I know a lot of folks in my generation who got nothing when their parents had wanted to leaves some inheritance, property,etc, but care provisions ate every bit of it up and more. Some of them did take out hefty loans for tuition and other things, figuring that they would wipe out those balances with an inheritance, or did not save as much for retirement, counting on an inheritance. That’s a whole other issue than the school stuff but can affect any decisions made.</p>
<p>It’s not a good thing either to make plans based on expected inheritances because the money just might not happen as planned. Remember the French woman who lived to 120, bless her soul and outlived the buyer of her condo who was to get it when she passed. She was in her 90s when the sale was made, and who would have guessed she’d live another 30 years. Also things can happen, and assisted care is one of the issues, that can eat away every bit of the money. As I said, counting other’s money, and yes, inheritances not yet received are other people’s money is not a good thing, and it’s even worse to count on it. </p>
<p>Agree with above post-- a GOOD financial planner can help your W and Grandma have a better idea of how to arrange her finances so it will cover her expenses for the rest of her life and she hopefully won’t need money from W or you. Have heard of a LOT of folks who end up in very tough situations as they age because their care and medical needs kept increasing as they aged. People who are currently in their 80s and in decent health stand a good likelihood of needing some significant medical and assistive care in the near future for some extended period of time.</p>
<p>Bless you all for your kindness toward our ineptitude and lack of preparation. BTW GM has long term care insurance. Anyone hear of that? Also, anyone think we should call a “college counselor” to advise us on financing options to help us understand what loans we can afford? #2 & I went to a local HS college fair Saturday and got info on a couple of counselors. </p>
<p>Even with long term care policies, they may not pay out when and how it is expected. My aunt had lung cancer and paid for decades on her long term care policy. She needed help in the last year of her life but her policy didn’t pay a penny until the last month of her life. Costs for cancer care and treatment and other expenses of aging can be quite astronomical.</p>
<p>An attorney specializing in elder care for GM & D sounds like something much more important than any private counselors, to me. GM doesn’t sound like she’s willing to commit and may change her mind at any point about what she wants to commit to college. Really an unstable foundation with which to plan. An attorney specializing in elder care might be able to go over with GM what her options are and how she can best gift for college IF she wants to and how that might affect GM’s future options.</p>
<p>Good luck! Have not read or heard anything great about private counselors–they generally are trying to get their $$$ by packaging kids to get them into Us, not so much getting finances for Us.</p>
<p>Depends upon how much that long term care insurance will pay per year. My friend’s mother has a top plan that pays about $2K a month and has stipulations. That on top of Soc Sec will pay $4K and the best communities here in my area are $14K a month. I have the bills to prove it too. They range from $10K on up and you have to commit to pay 5 years up front due to federal laws for Medicaid eligibility. THey take the money and tell the family they had better take the rest ASAP so not to be held for it. Seriously, one has to learn these rules. I am taking care of my MIL and mother who are close to 90 years old, and have had to become familiar with these regs. MIL has a farm she wants to keep in the family. AIn’t gonna happen if she ends up in the nursing home unless she signed it over 5 years before her need. </p>
<p>I don’t know what to advise in terms of getting fin aid counselors, when I truly believe it’s the whole family picture that needs to be examined, not the college situation getting the spotlight. It’s really a simple matter of what you and your student have to pay bottom line at each school. Take the loans and work study out of the aid packages and look a that bottom line cost. How can you and kid pay it? Kid can take out $5500 in loans on his own. How much can you afford to take? Remember parent loans are at about 7-8% and interest starts running the meter the minute the funds are released. Would grandma allow you to borrow those loan amounts? Ones affordable to you but at a more favorable interest rate, but still over prime so she makes out too? Can you determine what you can afford or do you need someone to so tell you? According to FAFSA statements, the EFC is supposed to be what you can afford. I personally believe that is a personal determination each person has to make. </p>
<p>I do believe that your MIL, wife and you should become aware how long term care, assisted care, nursing home works. The rules for those are as ornery and worse than for school fin aid, and if your MIL is looking to leave any inheritances for anyone, she should know who those laws work, because, believe me, I now how they would work in our personal situation, and with my MIL’s family life span expectations, she’d be wiped out without taking preemptive measures. My MIL’s long term contract, by the way had a net value of $19K after 30 years of payments to it. She did not buy wisely. </p>
<p>Before you shell out for private counselors, you exhaust your own research. Some recommend Financial Aid for Dummies. I learned a huge amount from Finaid.org. Look into the actual details of the long term policy.</p>
<p>It’s good to be analytical about all this, not get stars in your eyes. Not look at “best case” only. 800k may be slim pickings if Grandma lives another ten years. (Maybe even 5 years, depending.) It may be dicey if W and kids inherit before graduating from college. An expensive college choice- with the draw on parent resources- limits your own lifestyle and saving for retirement. Leaving a kid with loans and expecting an inheritance to pay it off— what if, at that point, the kid would prefer to buy a home or has a family and needs that money?</p>
<p>OP should be looking at Direct Loan and Parent Plus Loan web sites, see what this means. And YES, see if that 27k left to the family to pay already includes loans or if they can be used to reduce that 27k. </p>
<p>There is a lot to life beyond winning matriculation to a particular college. You need to be holistic.</p>