My stepdaughter is graduating in 2022 and wants to go to a private school. She lives with her mother who earns ~28k a year; my husband pays $17.5k per year in child support, plus half of medical/dental/vision.
Her overall average is 91/100 and she’s in the top 15% of her class. I don’t know her SAT or ACT.
She wants to go to a private school with a total cost of $75k/ year. The first year is mandatory residential but after that, she would be able to live with her mother to avoid room and board.
I believe that if she’s accepted, she will receive sufficient aid and scholarship to make it possible.
The problem comes for her second year as the FAFSA will require my husband to complete, and also my info. Our gross income is $245k (mine is $135k) and i have $1.5 million in retirement.
I am concerned that she will enroll in this school, only to find out the second year with changes to financial aid that it will not be affordable.
Is there anything now we can do to improve her chances of financial aid when her father must complete the FAFSA?
Does this college also require the Profile? If so…that is the info your daughter will need to provide. Many colleges require both custodial parent (and spouse) and non-custodial parent (and spouse) to complete the Profile. That’s not changing.
So get that info about the colleges she is interested in.
If this expensive private college requires the profile from both parents, that will start with freshman year.
The key thing is for the parents to set a budget for annual college costs with this student. Have they done that? If it’s not possible to exceed that annual amount, the student needs to understand they cannot attend if a college will cost more at any point in their schooling.
I would also suggest reaching out to the financial aid departments at colleges that only use the FAFSA to see what they will be doing with continuing students who this will affect.
ETA…is your retirement savings in authorized retirement accounts? If so, the balance in these accounts is not used in the financial aid calculation. However, if you have the money in regular accounts (not actual retirement accounts) the money will be counted. And the amount you contribute to tax deferred retirement accounts for the tax year used for the financial aid forms is added back in as income.
For how long will your husband be paying child support and 1/2 insurance costs?
We live in NY, so husband has to pay child support until she’s 21, which is October of her college senior year.
Her first choice right now does not appear to be on the CSS list, which was a relief at first.
90% of my savings is in 401k or IRAs.
My husband’s divorce agreement stipulates that parental contributions for college are limited to the cost of state schools. But other than that, I don’t foresee us being involved in discussions on financial aid until we’re sent a bill.
If the college uses only the FAFSA, there is absolutely no guarantee the college will meet this kid’s full need. IOW, your family could be footing the entire bill minus whatever amount of federally funded grant aid she is eligible for per fafsa.
The full Pell Grant is just over $6000. She would also get a $5500 Direct Loan. Those in combination will not pay for a $72,000 college bill.
What makes you believe this?
There’s uncertainty regarding how the simplified FAFSA amount of financial support will be calculated…for example, will the custodial parent be able to assign $ for room and board and count that amount (potentially non-monetary) as ‘financial support’? Thoughts @kelsmom? @belknappoint?
Some, maybe many, CSS profile schools won’t expect step-parent retirement funds be used to fund college…only way to know for sure is to ask specific colleges (or run their NPCs).
Under the new FAFSA rules it does not appear that OP’s step-D will qualify for a Pell grant.
She would the first year! I think the new rules happen 2023-24 academic year.
But in reality, the family needs a 4 year budget plan. And the student needs to understand what the budget limitations are…
nvm
Agreed, on both counts, I was thinking the step-D started college in 2023.
I’ve seen no evidence that the balances in authorized retirement accounts are counted as assets when computing financial aid. Yes, some Profile schools ask for these amounts, but it is thought that this is done to see if the retirement balances are not aligned with incomes.
Agreed in general, but IMO OP’s retirement balances aren’t closely aligned with their income of $135K. I still don’t see colleges expecting a step-parent to fund college in most cases.
We don’t know the college so it’s hard to say. The schools calculate a “family contribution” and that includes the step parent.
Understand on the limit of the Pell grant. My concern is also with University financial aid, the SEOG and subsidized federal loans.
She is class of 2022, so she’ll be starting college fall 2022.
My thought that if her grades were good enough to get in, that her mothers low income would qualify for enough college grants to make it affordable.
I’m not sure what you mean that my retirement balances aren’t aligned with my income?
OP- this could send you guys into a financial tailspin which might take years to recover from. I would encourage your H to sit down with his D and have a financial discussion. You don’t want to be handed a bill for $75K and be told “It’s due in two weeks so I can pick my classes”. Many folks get blindsided by the cost of college- you all still have time to pick an appropriate list of places to apply to so you don’t get trapped into paying for something you cannot afford.
I’m not sure your assumptions about her freshman year are correct BTW… if she’s getting institutional aid (money from the college) that sum would be predicated on whether she’s living in a dorm or at home. Likely more money to live in a dorm, less money if she’s commuting. So even though she’s saving money living at home- her college knows that, and is likely to cut her aid accordingly since they are charging her less.
Time for a sit-down. First your H and his D. Then you two with each other to calculate what you can actually afford (regardless of what the formulas say).
I just meant it’s higher than might be expected (but depends on your age). Regardless, I don’t think colleges will expect the step parent’s retirement funds to be used for college.
Maybe…maybe not. Does this college give guaranteed merit scholarships based on stats?
Lots of kids get accepted to colleges and do not receive sufficient need based and/or merit aid to attend.
The maximum SEOG is $4000. And this is not a guaranteed award.
I agree that whatever school we are talking about might not come close to meeting full need, or ‘being affordable’. And we don’t know what affordable means.
I agree with blossom’s advice that the bio parents have to sort thru this ahead of time. Simplified FAFSA rules don’t care what the divorce agreement states regarding paying for college, which is going to come as a painful surprise to many in a couple of years.
Ok, I’m a good little saver. 