Do I not know something?

Paying for College
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<p>8 out of 10 colleges that I've applied to will leave me in 50-100k in debt, so now I'm definitely reconsidering them. Am I able to lower that debt somehow? Is there some way that I can at least lower my debt by 30k?
Sorry for my ignorance and really general question, it's just that I know almost nothing about financing my education:(
If it makes a difference, I live in an upper-middle class family whose income will dramatically drop in about a year.</p>

2

<p>Are you applying to schools with good financial aid programs? I had the same problem when I applied -- my parents knew that my father was losing his job, but were determined that I have an excellent education, so they refused to let me attend a merit school. None of the four schools I ended up applying to gave me financial aid in my first year. I ended up matriculating at Harvard.</p>

<p>I mention that because when it was time to negotiate sophomore year aid, we had the tax forms to prove financial need, and I was given a massive aid package. (Of course, by this time my parents no longer needed it quite as much.)</p>

<p>So when you're choosing between these schools, you might have to take a look at (1) generosity of sophomore-year and future financial aid, and (2) health of the school's endowment and aid budget. I would never mention the latter except in the current financial climate, with many schools probably facing times when they simply won't be able to give aid anymore.</p>

3

<p>I'll get into specifics here: The main school I'm looking at is Loyola University Chicago, but I'll be approximately 60k in debt after I graduate. About their financial aid, their site says:
Freshman Class (2006)
■ 2,080 total students
■ 94% received financial assistance
■ 90% were awarded grants and/or scholarships
■ $17,793: Average freshman financial assistance award
So even if I do get the avg aid, I'll be in aprox. 40k in debt:( I plan on doing work study, and on their site (under and example of a financial assistance calender) it says that I can at least get $2000. So I guess that puts it down to needing 52K w/o aid and 32k w/ average aid. What I really want to do is get that debt down to <25k. Is that possible?</p>

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<p>I was thinking, would any of that assistance award put me in debt? Sorry for my ignorance!</p>

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<p>How do you know this? Need based financial aid is not based on what will happen "in about a year". It is based on what is happening NOW. Your need based aid will be recalculated annually based on the income for the previous tax year, and the assets available as of the date of filing for your finaid forms.</p>

<p>Have you had a discussion with your parents about college costs? If not, do this ASAP. You need to know from THEM what they are able or willing to contribute to your college costs. If they are "anticipating" a significant reduction in income (this sounds "planned"), perhaps they have already considered how college is going to be funded in their plan.</p>

<p>Another thing...averages are AVERAGES. They may or may not translate into the award you receive. You should be plugging YOUR family's numbers into one of the financial aid calculators using the institutional methodology (since most of your schools are privates) to get a guestimate (it's a guess) of about what you may be looking at for your family's contribution for the upcoming year.</p>

6

<p>I try to talk to my parents about paying for college, but they keep telling me to think about something else and enjoy the holidays. I plugged in my family's current income into an EFC calculator and it said that it expects my family to pay $100k+. That will never happen! I then put in my family's expected income for next year and it said $38k. That's still not going to happen! I don't see why the EFC estimator thinks that family's can pay half of their income (before taxes!!).</p>

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<p>No...your parents won't have to pay $100,000 for the upcoming year for college. There is NO COLLEGE that cost that much per year for ONE student's attendance (unless your family intends to buy you a condo:)</p>

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<p>Thanks a bunch for all of the answers thumper, it's really helping out:) Do assets lower the EFC or raise it? I'm guessing liquid assets raise it and illiquid assets lower it. Also, my parents own a condo, but they're renting it out to my sister, so does that count as a second home? When I did the EFC I used college board's, so I guess that I shouldn't put too much stock into it. My main concern is that the EFC (which I'm now guessing is a little off) is barley lower than the total yearly cost, so does that mean that I will get very little/no financial assistance?</p>

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<p>ALL assets count as ASSETS except the balance IN your parents' retirement accounts. The amount they contribute in 2008 IS counted back in as income. Liquid assets (if you mean savings etc) are counted as they are. So if you have $100,000 in savings, that is listed as an asset. The value of non-liquid assets is what you list. These are NOT assessed dollar for dollar towards your college costs (parental assets I believe (someone else correct me if I'm wrong) are assessed at 5.6% of the value). BUT YES that condo your parents own IS considered a second property and will need to be declared on the FAFSA as well as the Profile (for schools that require it). Rental properties must be noted on the FAFSA if they are not your FAMILY's primary residence. There is a way to list the value of these properties, but since I don't own a second property, I'm not certain.</p>

<p>So...in addition to income, it sounds like your family has a second property, and some assets. </p>

<p>I'm going to add...if your family had the resources to purchase a condo for your sister to rent, their income and assets must be able to support this. Low income folks can't even buy their OWN home, never mind a second home for an offspring.</p>

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<p>Well my parents are taking money out of my sister's college account for the rent (because she's not going to use it for college) and after the account runs out then she will have to pay with welfare. If it makes a difference, my total household income after the big drop will be in the upper 5 figures.</p>

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<p>FinAid</a>! Financial Aid, College Scholarships and Student Loans</p>

<p>FAFSA</a> - Free Application for Federal Student Aid</p>

<p>PLEASE do some reading about what goes into the EFC
and go to the website of EACH school you are interested in to see what they require of applicants as far as financial information, and financial aid they offer.</p>

<p>If you truly want the cheapest option, your instate public school is likely a good option.</p>

<p>If you have an EFC of 40K, very few colleges (beyond the Ivy's) will give you aid to cover that cost. But that said, there are exceptions and each college must be researched by YOU to see what their policies are.</p>

<p>If you have mulitiple residences, you have assets, no way around that!</p>

<p>BTW, EFC was never meant to be paid out of current income. It is meant to be paid out of savings, income and loans if necessary.</p>

<p>Some of us with modest incomes, 1 modest home and a car that is 18 years old, have lived like paupers over many years to afford to pay EFCs in the 10-15K range out of savings.</p>

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<p>Right now that "big drop" is projected. It is NOT a current event. Until it happens, it won't matter AT ALL to the financial aid folks.</p>

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<p>Thanks a lot for the help you guys, I have some stuff to mull over.</p>

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<p>Assets raise the EFC. Illiquid/liquid makes no difference. They are assets and for FAFSA are treated exactly the same. $200,000 in the bank or $200,000 in stock or $200,000 in real estate = $200,000 in assets to FAFSA. A condo is an asset and it's value reportable as such.</p>

<p>If your EFC is barely lower than the yearly cost you will get little need based aid. For instance if the school costs $40,000 and your EFC is 38,000 then your 'need' on which aid is based is $2,000. Does not matter what the average student is getting.</p>

<p>Need based aid is based on *your *family income/assets. The averages a school publishes are really quite meaningless. Say I go to a school that costs $40,000 and my EFC is 0 and I get $40,000 in aid, and you go to the same school and have an EFC of 38,000 and get $2,000 in aid. Assuming we are the only 2 students, the average aid the school gives is $21,000 (my aid of $40,000 plus yours of $2,000 = total aid of $42,000 divided by the total number of students -2. $42,000/2 = average aid of $21,000). But you are not getting $21,000 - you are getting $2,000.</p>

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<p>What are you stats? The relatively simple answer is to find a school where you would be eligible for a large merit package.</p>

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<p>Well there are 2 schools that I can afford, it's just that I'm trying to find ways to finance my education at my top choice. If all fails, then I will end up at one of the 2 schools though</p>

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<p>Giggi, </p>

<p>It sounds like your family income is somewhere near $200K now and will drop to, let's say, $90K. Your family owns at least 2 properties and you have a sibling not in college. Frankly, I suspect you will have a hard time getting need-based aid even after the drop unless you also have a sibling attending college concurrently. At most, after the drop, your schools will offer you a loan or perhaps you can get a pt job on campus. Do NOT go by the averages; your family income-- even after the drop-- is far higher than the US average income. </p>

<p>I do think you need to talk to your parents. It sounds like they may have a college savings account for you. Other than that, you can consider: merit aid, ROTC, service academies, living at home, in-state publics, local scholarships and/or working at college. Another thing you can do right now is take and study for as many APs as possible. Check out how prospective colleges award AP credits. You may be able to cut your colleges years by a year or two. Another option is to start working soon. If you start working parttime now and work ft this summer, you will be able to save quite a few thousand dollars.</p>

<p>Oh, and work-study and loans are considered aid. So when a college starts meeting need, usually they start by awarding loans and/ or work-study. Only after that do they start awarding grant money. So if you're looking for 'free' money and your EFC will be at least $38K, you probably need to consider merit scholarships or one of the other options I mentioned.</p>

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<p>With that EFC and income you can forget being offered work study and need based aid at most schools. You would be looking at private loans. I personally wouldn't go there or let my kids go there to finance an undergraduate degree.
Go to a school you can afford or go to a school that will give you substantial merit aid.
If you look through the threads you will see posts from kids who have graduated and greatly regret the massive loans they took out.</p>

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<p>Thanks a lot for your feedback everyone! It was very enlightening. I've decided that I will not attend Loyola, but I'm still going to try to find a way to attend my first choice (don't worry, it's cheaper!). I will meet up with their financial aid office and speak with them, and also ask my affluent grandfather to loan me money with a lower rate than banks (but I'm not counting on it). If all of this fails and I will graduate with massive debt, then I will attend one of the schools that leave me in little/no debt.</p>

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<p>Don't forget to have that discussion with your PARENTS too...they actually may have a plan.</p>