<p>Total COA = $52,000</p>
<p>Tuition Grant = $29,500
Federal Pell Grant = $5,550
Federal Supp Ed Op Grant = $1,000
Federal Work Study = $2,500
Federal Perkins Loan = $1,000
Direct Stafford Sub Loan = $3,500
Direct Stafford Unsub Loan = $2,000</p>
<p>The way I’m reading your offer is that there is about a $6000 gap between what the school is offering you and what it costs to attend. If you can pay the $6000…then the offer is fine. If you can’t then it’s not.</p>
<p>This also includes $6500 in student loans and $2500 in work study. Keep in mind that the work-study portion will be earned throughout the year…so if you need that money to pay billed costs by the college…it won’t be available until after it’s earned.</p>
<p>So…that’s $6500 in student loans…and the $6000 gap in aid vs cost.</p>
<p>Thumper’s right about the $6k gap. </p>
<p>How will you cover that gap?</p>
<p>You’re already being expected to borrow about $32k (total) over 4 years (the Stafford loans will likely go up a bit each year - 1st year: $5500, 2nd year: 6500, 3rd year: 7500, 4th year 7500)</p>
<p>What school is this? If the COA includes a lot of “fluff” you might be able to economize to close that gap.</p>
<p>Yes there is a gap (it’s $7,000). And yes, the family can pay for it because they have aprox. $100,000 cash in savings. Family could also reject the Stafford unsub loan (in order to save on the interest payments).</p>
<p>On the other hand, the family (7 members!) has very low AGI ($12,000 per year) and no other assets (investments, real estate, etc) whatsoever.</p>
<p>So in this context, would you consider this a resonable package?</p>
<p>Glad to hear that your parents have said that they can cover the gap and possibly the loans!</p>
<p>What are the demographics for this family? How many kids are planning to go to college at the same time? If the student who received this financial aid package is the only one going to college right now, are there any more children coming up? Are there any medical bills or something else foreseeable (such as long-term care for someone in the family who has a chronic illness) that will eat into the savings?</p>
<p>One thing you have to know is that many colleges reduce the amount of gift aid available each year. Unless that tuition grant is set in stone for any reason, the family should bear in mind that the tuition grant might shrink and be replaced with more extensive loans. </p>
<p>If the student who received this package is the only one going to college for a while, then the package is pretty good. If this family has, say, 5 kids planning to go to expensive private colleges at roughly the same time then their savings will be gone fairly quickly and they might end up having to get loans anyway.</p>
<p>I, too, was wondering about the family’s willingness to spend so much of its precious savings, since the family’s income is sooooo low.</p>
<p>I’m also curious how a family with such a low income could save $100k</p>
<p>I was thinking the exact same thing as mom2collegekids. If a family with such a low income could save $100,000, they should have to pay much more than $6,000. The financial aid system is totally unfair.</p>
<p>Not a typical family. The $100,000 in “savings” are the result of a divorce settlement (lump sum payment) from a few years ago and have been consistently dwindling from one year to the next.</p>
<p>There are five children but the other four are much younger and will not be attending college until 2014 or later. Nothing in the foreseeable future that will significantly eat into savings, although the savings account will for sure be slowly decreasing over time.</p>
<p>Therefore it sounds like this is a reasonable package. Can they really reduce the tuition grant from one year to the next if the family’s circumstances remain the same? Wouldn’t that be the equivalent of “bait and switch”?</p>
<p>The “willingness” of the family to spend their indeed precious savings is not a given. We are not sure if it is a prudent move to undertake this expense. Again the family doesn’t have any other assets whatsoever and the earnings power is very limited. We have a free ride at a state school as a safety to fall back on. Still waiting to hear from other schools to compare financial aid packages.</p>
<p>You know…I usually say “it’s not all about the money”…but in this case, I think it is. This family has very little earning power and very limited assets. That being the case, going into $12000 of debt (the loans in the financial aid package and then paying the gap amount too) does not seem like a prudent thing to do.</p>
<p>I would vote for the full ride…unless a more favorable package comes along from one of the other schools.</p>
<p>I, too, vote for the “free ride.” </p>
<p>It sounds like the family needs this money to supplement living expenses. Since the money is from a divorce, it sounds like some/much/all of the “income” is from child support. As each child reaches 18, that child support diminishes. What will the mom have coming in at that point? And, even if the $12k AGI is from a job, it’s still not enough to live on. The family has needed to dip into the savings from time to time.</p>
<p>It seems very unwise to spend ANY of that money on a college education - especially since there are free alternatives. </p>
<p>Besides, it’s not right for a family to spend $24k on the gaps ($6k per year) when there are 4 younger kids. It doesn’t matter that they won’t be going to college until 2014. Your mom won’t be any “richer” in 2014 - in fact, she’ll have a lot less in savings - especially if she’s had to spend $24k on your education. It’s not as if by 2014 she’ll have this whole other big source of money.</p>
<p>Take the free ride…set a good example for the younger ones. They will have to do the same.</p>
<p>$100K in the bank is not much at all with an income of $12K AGI. I wouldn’t advise the parent to take on any loans. (If the student chose to take on the Stafford loans, that’s a different story). That $6K gap this year is likely to grow to $7 or $8K in future years. </p>
<p>The full ride is a great deal in this case, and gives the family a little more flexibility for the future. Once that $100K is gone this family is in tough times.</p>
<p>Many thanks for your valuable comments. The consensus is clear. Hopefully, one of the private universities we have yet to hear from will provide a sweeter deal that is closer to a free ride.</p>
<p>How is the EFC zero if there’s $100K in the bank?</p>
<p>The family probably qualifies for “Auto EFC 0.” When you qualify for Auto EFC 0, then assets don’t count. </p>
<p>They probably use the EZ 1040 and the kids probably qualify for free/reduced lunch. I don’t know all the qualifications for auto EFC 0, but there are a few. Swimcat or Sybbie could give better details…mine are sketchy…</p>
<p>The op was wondering if the FA package was generous…in my mind, a 29K grant is pretty generous! What am I missing here? lol</p>
<p>The grant is generous. That the family STILL has to cover a $7000 gap AND take out Stafford loans of about the same amount is NOT good for a family with limited means. </p>
<p>Simply put…this family has an income of $12,000 a year and the total of their stafford and gap equals or exceeds their INCOME. That is too much for them to pay.</p>
<p>The grant is nice, but the gap and loans are not. At that income and EFC level, I would hope for an acceptance that replaced the loans with grants, or at least didn’t include that gap. </p>
<p>In my family’s world (EFC 0, no money to contribute, very low income), this would not be an acceptable package unless EVERY OTHER school had weighed in, and even after polite inquires about additional grants, there was nothing better.</p>