<p>I have been accepted by two very prestigious colleges (Berkeley and UChicago), and I'm really excited. However, my parents say that they cannot afford them. Our EFC was above even what we are being asked to pay at both schools, but my parents claim that they still cannot pay that kind of money. According to my mom, she cannot recall being able to claim the large amount of debt that she and my father have (second mortgage, prior student loans, car loans, etc.). My parents do have a high income but also a lot of debt. So the parent contribution at both schools will be left for me to pay with student loans (at $55+ thousand/year, that's ridiculous). Unfortunately, though, my parents do not like sharing most of their financial details with me, so I can't be sure of everything going on. But is it true that all of these contributors to my parents' debt can't be claimed on FAFSA? How is that even possible or fair to students?</p>
<p>Its fair because consumer debt is considered a choice. A second mortgage and car loans are not considered “necessary” debt.</p>
<p>Now if the second mortgage was used to pay large medical bills, I believe you can appeal and ask for additional consideration, but its not guaranteed.</p>
<p>Debt is not taken into account by FAFSA. Consumer debt (cars, credit cards, boats) are all considered a choice your family has made.</p>
<p>A mortgage against the primary home is not reported because the primary home is not a reportable asset so debts against it are not reportable. The only debt that is really taken into account is debt against a reportable asset. For instance a second home is a reportable asset but the amount reported is the value of the home less any debt mortgage against it.</p>
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It is fair because things like having a new car with car payments, or not having a new car and having to live with the old one and praying it lasts a couple more years, are choices made by each family. </p>
<p>Now certain debt that is outside a family’s control, such as high medical bills, may be taken into account.</p>
<p>You need to sit down with your parents and find out how much they are going to contribute each year to college. You (personally) can get federal loans of up to $5500 as a freshman. You need to find a college option that fits within that total plus whatever you can reasonably save by working hard this summer ($2K-$3K depending on when your H.S. gets out.)</p>
<p>Some parents economized like crazy to save money for their kids college expenses, and others continued to increase debt. You’re bearing the burden of their decisions, but life is often like that. </p>
<p>We saw some similar things with other families that bought bigger houses, bought new cars, and went on expensive vacations and only come spring of senior year did they figure out that a number of colleges that their child had been admitted to simply weren’t possible because of the debt they already carried.</p>
<p>If your parent’s have student loans they are still paying off, unusual medical expenses and/or consumer debt that was accrued during a period of unemployment – all of that can be used to adjust FAFSA EFC numbers.</p>
<p>As far as second mortgage – FAFSA does not factor in the value of the primary home, so you cannot subtract the amount of a second mortgage off the value of that asset (and unless your parents are upside-down on their primary home – that is a good thing.) For the CSS Profile, your parents should have deducted the amount of both the primary and secondary mortgage off the value of the primary home – thus reducing the value of that asset.</p>
<p>UChicago is a private school – they use the information from both FAFSA and CSS Profile and come to their own decision on how much your parents are able to pay.</p>
<p>I suggest that your parents go back over the FAFSA and CSS Profile forms and make sure they filled out every section correctly – a small error can cost you thousands. Have them post with any questions they have – there are many of us who are able to help! </p>
<p>I would also suggest that your family file a financial aid appeal. It must be in the form of a written letter, signed by the parents, with supporting information (i.e. total amount of student loans and the required monthly payment). Do this after checking the FAFSA and CSS numbers.</p>
<p>An appeal takes up to 10 days, so this should be done ASAP – that way you can have an answer in time to enroll.</p>
<p>You have to understand that an EFC of $55,000+ means a high income or high assets or both. An income of $200,000 and assets of $200,000 still yields an EFC less than $55,000. Try this calculator – make sure the figures are correct and taken off the 2009 taxes – [FinAid</a> | Calculators | Expected Family Contribution (EFC) and Financial Aid](<a href=“Your Guide for College Financial Aid - Finaid”>Expected Family Contribution (EFC) Calculator - Finaid) If your figure comes out much lower than $55,000, there may have been mistake in the filing.</p>
<p>Fantastic. So my parents’ poor decisions mean I can’t go to either of these colleges?</p>
<p>I reread over the forms, and I can’t pick out any obvious mistakes, but I feel that saying people can afford to pay 1/3 of their income to education expenses is ridiculous. But then again, my parents refuse to share a lot of their financial details with me… So I can’t be sure.</p>
<p>I do plan to file an appeal, but I suppose I shouldn’t hold out any hope then, if none of these loans are going to make any difference?</p>
<p>And I also plan to take out all of the federal loans that I am offered. I was given a $2000 grant at Chicago, and my parents say that they can pay for $10,000/year. This means that in addition to federal loans, I will still have to take out roughly $40,000/year in my own student loans. Is that manageable?</p>
<p>Colleges assume costs will be paid by using a combination of three things…only one is INCOME. The other two are past income (savings) and future income (loans). Someone needs to pay your college bills. You need to discuss this with your parents and figure out if they can somehow provide you the support to attend the schools you mentioned in your OP. If not, you will need to either find someone else to pay the bills or find a college that is affordable to your family.</p>
<p>Well, I was already approved for student loans that would cover the parental contribution that my parents can’t pay. My problem is deciding if I can actually afford to pay it off. As for past income (savings), my parents and I actually have a very small amount of money in savings. My parents have high incomes, though, that are apparently being used to pay for their own debt.</p>
<p>You are correct – it isn’t fair that you have to pay for your parent’s poor financial decisions. However, keep in mind that the school is seeing a high income ($200,000+) and it is hard to imagine what type of loans/debt would prevent such a family from contributing a significant amount to pay for their child’s education. Student loans, medical bills and mortgages are all taken into account when deciding the EFC.</p>
<p>you mentioned that you have a brother whose loans your parents are paying off – are they planning on paying off your loans as well after undergraduate school? If so, ask them to take out that amount in Parent Plus loans rather than cosigning alternative loans under your name. UChicago offers a 10 month payment plan that they could also make use of, to allow them to spread out the payment and make it less painful.</p>
<p>I understand your frustration – and it isn’t fair to you, as a student – but it is not reasonable to take out $160,000+ in loans as a student because you want to get out of Colorado. Perhaps a gap year is a possibility – you could reapply next year to a better range of schools that award merit aid or you could ask to defer your admission to UChicago and maybe your parents would be in a better situation to pay for your school then.</p>
<p>Well, we do not have a family income of $200,000+. It’s closer to $150,000. And my parents are paying $40,000 total for both me and my brother. My brother graduated two years ago, and my parents have at least $25,000 left to pay on his loans alone, I believe. My parents plan to take out a $10,000 parent plus loan for each year that I am in college, and then they are cosigning on all of my student loans that will cover the reamining costs of attendance.</p>
<p>Wow… 200k+ for family income…</p>
<p>Something just doesn’t make sense…a $150K income with little savings would not normally produce a FAFSA EFC of $55K. Was that your expected contribution for U Chicago only? Berkeley wouldn’t actually expect you to pay that much since their COA is under $50K. Did you target any schools offering you good merit aid?</p>
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<p>Actually…it might…but it would also indicate some money tapped from assets. Perhaps home equity is high, or there is some kind of business.</p>
<p>Was the $150,000 your parents’ AGI? That is what is used…</p>
<p>Sounds like your parents would qualify, barely, for the American Opportunity tax credit. That’s an additional $2500.</p>
<p>
[The</a> New, Improved College Tax Credit - Forbes.com](<a href=“http://www.forbes.com/2009/03/10/college-tax-credit-stimulus-personal-finance-retirement-new-credit.html]The”>The New, Improved College Tax Credit)</p>
<p>^^</p>
<p>Well, it’s a $2500 reduction in the OP’s parents’ taxes payable in April 2011. It will not reduce their out-of-pocket costs for Fall '10.</p>
<p>OP: Most people, self included, rub their eyes in disbelief when they see that EFC. What it boils down to for almost everyone is this: Paying for college hurts. </p>
<p>You and your parents need to sit down and have a candid conversation about this. Tell them that you need their help with making a decision about college. Tell them that you only need to know one thing: How much will they be able to contribute? You don’t need to make suggestions about how they could make that contribution; that’s up to them.</p>
<p>Are you willing to contribute a whole pile of money yourself, by working and saving? If so, let them know, and ask for their help in calculating how much that might be.</p>
<p>Be mature and business-like when you talk to them. Do NOT, even by implication, criticize their past financial decisions or current situation. Your college is not the only big thing they have on their minds. They are very likely beginning to think about their retirement, and unless you want them spending their golden years in your house, you need to respect that.</p>
<p>Do, however, learn the lesson for your own life: Big debt is bad! It will hurt you, and your future children, for years and years, possibly the rest of your life. So if you cannot swing UCB or UC without incurring huge loans, then you may need to take a year off and apply for next year to some schools that are financially feasible. Under no circumstances should you take on more than about $25-30K for your total undergrad debt.</p>
<p>sk8ermom: My parental contribution at Berkeley was actually around $50,000. Their cost of attendance for 2010-11 was about $53,500. From what I had read on their websites, Chicago and NYU had some good merit aid, but I wasn’t given any (okay, I got a $500 scholarship at NYU).</p>
<p>thumper1: I can’t really give details because 1) my parents filled out the FAFSA, so I’m not entirely sure and 2) they wouldn’t want me sharing a lot of our financial info online. But I know that our house is not extremely expesnive, and we still owe over half on it. My parents do not own their own businesses (they work as a Lockheed Software Engineer and an insurance underwriter).</p>
<p>LasMa: Yes, I understand that huge debt is a bad thing for myself, my parents, and my future children. The problem, though, is that my safety school (the cheapest one on my list), is also very expesnive despite my in-state residency. It would be CU Boulder, and it’d cost $25,000/year. There is absolutely no way that I’m going to be able to keep my education under $25-30k total unless I go to a community college. Colorado doesn’t give huge benefits to residents, it seems.</p>
<p>And I have been talking with my parents. They are encouraging me to get a full time job this summer and while going to college. I’m open to the idea of working, but I’m a little wary of the effects that it’ll have on my grades and my stress levels. I currently work as a nanny 15-20 hours/week, but my parents are telling me to go for more like 40 hours/week. Granted, there is less time spent in class during college, but there is a lot more studying to be done.</p>
<p>CU Boulder is your financial safety then! It would cost half the amount of your other schools, which is huge. I can’t imagine what your parents are thinking with the full time job for a college freshman though. In the summer, yes. During school? Not likely unless you can at be working on your studies while you’re at work! The amount of time spent in class is usually a third, or less, of the time required to keep up and do well. There may be a few gen eds that are easier, but if most are like that I’d say you’re not getting much education for your money!</p>
<p>Is there any chance you’d get merit money at Boulder? What is your planned major? If merit aid is not likely, and your major will not be affected, starting at a CC would be a much better plan than the work full-time one! I’m sure it’s disappointing, and somewhat surprising, that your parents failed to plan better…but you can overcome this challenge and resolve to do better for your own future children!</p>
<p>sk8rmom is right: Getting the first 2 years out of the way at a community college, and then transferring, would cut your total cost in half. You still end up with the university degree (it will not mention the CC), and you’re not piled up with debt.</p>
<p>The other thing would be to take a gap year and re-apply for next year. You could concentrate your search then on schools which are known for being generous with aid. State schools are not giving much in the way of aid these days, because states are struggling with their own finances. A private school might well end up being cheaper for you. However, other states’ publics, Berkeley in your case, might be the worst option of all – you don’t get the advantage of in-state rates, and they aren’t giving much help to out-of-staters.</p>
<p>“Colorado doesn’t give huge benefits to residents, it seems” </p>
<p>I think you may be confusing merit and need-based aid. The reason you are so unsatisfied with the awards given you by the colleges you were accepted at (Berkeley, UChicago, UC-Boulder) is that they have determined (based on your income, your parent’s income and savings for both of you) that you have very little need.</p>
<p>Merit Scholarships are based on your individual performance and generally do not factor in financial need – these are the scholarships you need to focus on. Regardless of what your parents tell you, multiple schools have come to the conclusion that you and your parents are capable of paying in the neighborhood of $50,000 per year for school. </p>
<p>You did not receive a merit scholarship at UChicago – so that university is not affordable to you. It also doesn’t sound like you received a merit scholarship at UC-Boulder; did you apply for one? They have numerous merit scholarships that would bring the cost to a manageable level (kitkatkatie gave you some excellent advice in a different thread).</p>
<p>You have been given some excellent suggestions – take this week to follow-up on each of them: check the FAFSA and CSS Profile for possible errors and send a written FA appeal to each school (Boulder and UChicago). Realistically figure out what you can contribute – term time work, summer work, savings, student loans.</p>
<p>Once you have final financial aid figures after the appeal have a final discussion with your parents. Each of you needs to bring to the table what you can contribute to the cost of your education for 4 years – including loans, work contribution, etc. Then you can move forward on your choice of school.</p>
<p>It is not reasonable to borrow more than $30,000 for an undergraduate education – no matter what. The quality of the school, your preference of geographic location, your desire to get out of Colorado, none of this justifies borrowing more than $30,000.</p>
<p>It is also not reasonable for you to work full-time while attending college and graduate in 4 years. When you are in school, you need to be able to devote enough time to studies that you can carry a full load and get a good GPA (particularly since you mentioned medical school as a possibility for the future). 10 - 15 hours per week is the standard number of hours that students can work while enrolled full-time in school.</p>
<p>I think you know that you really only have one choice in schools right now – UC-Boulder. You are not going to find any reasonable adult who believes that an undergraduate education at UChicago is worth borrowing $160,000 to make it happen. Your only other choice is to take a gap year and reassess your possibilities for the next admission cycle. If you are absolutely opposed to UC-Boulder, take the gap year route (and you can request that UChicago defer your admission).</p>
<p>Yes, I know the difference between merit- and need-based aid. And I was focussing on the former. I also applied at Princeton and Yale, which have phenomenal need-based aid (even for middle class families), and then I was looking at Hopkins (waitlisted), NYU (accepted), UChicago, and Berkeley. With the exception of Berkeley (which appeared slightly cheaper on the website), all of those schools listed several merit scholarships that I qualified for. I figured that it was worth a try, but unfortunately I only recieved a tiny scholarship at NYU. And I did apply for merit aid at Boulder. I won a $1000 scholarship, and that was it.</p>
<p>I will definitely file an appeal at both Chicago, though I highly doubt Boulder will change their mind (and my parents don’t seem to think that the cost there is an issue). My mother and I have already made plans to visit both Berkeley and Chicago over the next two weeks, so we’re going to sit down with a financial aid advisor at both schools and hear what they have to say on the matter.</p>
<p>My parents don’t want me going to a CC, and I know that I don’t want to go either. I think my last resort here would be Boulder, which my parents don’t see as a huge financial burden even though it would mean a $60,000 student loan, roughly. However, a gap year is still an option.</p>
<p>And I will look at working part time only, seeing as I had the same reserves about keeping my grades up with that sort of schedule.</p>
<p>So thanks for the advice, everyone. It really has helped. At this point, I’m just going to have to file the appeal, and see what the advisor at each school tells me.</p>
<p>Thanks again.</p>