<p>My daughter will be a freshman this fall, going to an out of state school. We will be able to help out but will fall short about $5000. She will be assuming this herself. I was hoping she would be able to acquire a grant but was only awarded a Stafford loan with 8% interest accruing immediately. The EFC which FAFSA determined was outrageous. How do they come up with such a crazy amount? No question about our obligations, other kid's expenses, medical etc. I feel like the whole exercise was a farce. Did I do something wrong? Should she accept the Stafford or shop around for something else? If so, what? She is an average student and we are middle income people so forget the scholarship route!</p>
<p>Your situation isn't unusual, the average fin aid recip is coming out owing around 20,000 these days. In four years that's likely to be closer to 25,000, approximately what you will owe. Interest rates have recently risen and most loans will be at over 5%. You may want to shop around for a home equity or call the college for some advice on other loan options, probably the best you can do is reduce the interest rate.</p>
<p>Thanks Speedo</p>
<p>Well, it's better than $20K per year! (needless to say, we didn't choose that route.) Our EFC was like 1/3 of our gross income! We absolutely could not afford that and have anything left to live on. I would really like to know how they come up with these outrageous numbers, too. We are going to be using the Stafford loan, even with the interest rate, along with savings and scholarships for the first year.</p>
<p>Yup, I agree entirely. I spent a lot of time on the fafsa for nothing. I kept thinking I made a mistake so I played with the calculator and realized we were not close to qualifying for any aid. If you are in the middle class in an expensive part of the country you lose. Maybe it works if you live in an inexpensive part of the country where wages and costs are low.</p>
<p>There are a lot of discussions on the economic value of paying for expensive private schools. Strictly in terms of money trying to pay a $30,000 or $40,000 tuition from a middle class income probably does not make sense. We are doing it for other reasons. My D has worked very hard and is very motivated. As part of the deal, she will be responsible for $5000/year by working and $10000/year in loans. She also got a few thousand in merit awards but that leaves our contribution well over $20,000/year. I am sure we will also end up helping her with the loans so we expect to be trying to pay for college for at least the next 10 years. I will be way past normal retirement age by then.</p>
<p>All the political talk about supporting education seems to be a big pile. George has decided to spend our money waging a war in Iraq. I don't want to bring politics into this discussion, but if the war is not successful, he will go down in history as one of our worst presidents.</p>
<p>Hi Ruthiesmom,</p>
<p>The sad thing about the FAFSA is that it is pretty linited as all they ask you pretty much is how much you make and based on that amount they give you an EFC. Do you have other kids in college? Do you have medical expenses outside of premiums ad out of pocket cost? It takes very few other things into consideration. CSS profile schools look at how you actually spend your money, your age and cap your assets.</p>
<p>This compounded with the fact that your daughter attends an out of state public school, means that very little money is coming her way. Based on your income I guess she was not eligible for a subsidized stafford laon. Did the school determine that you had no financial need?</p>
<p>Have you spoken with the FA counslor at D's school to exlain your situation? At minimum, you should push back to find out why D is not eligible for a subsidized stafford loan. There are a lot of things you will have to consider. If you were to take out a PLUS (parents loan where you can borrow up to the full cost of tutition) loan would the interest rate on this loan be lower? would taking out a home equity loan to cover the gap be a viable alternative as the rates may be lower and you would be writing off the interest. Thoroughout her stay at this school, would she ever be eligible for merit $$? Has she been looking for outside scholaraships? I know that many are gone for this academica year but she can start and stay on top of the ones coming out for next year (you'd be suprised at how fast the year goes by)</p>
<p>I feel as parents all muddling through this process, together we almost have to become financial experts in finding a way to pay for all of this.</p>
<p>I don't think muddling has anything to do with it. Federal aid as determined by Fafsa is very restrictive. For those who do qualify for assistance, some colleges do not even meet the "gap" with loans and scholarships. Basically for a middle class family, this means college is paid for from savings and BIG unsubsitized loans.</p>
<p>Or, we can herd all of the "middle income" kids into state schools.</p>
<p>we have learned a lot about the college process from resources online
Always have a financial safety not just academic
Out of state public schools- unless you are amazing athetically/academically don't offer much if any merit aid.( for that matter instate public schools don't offer a lot either)
The saving grace for public schools however- is that they are subsidized and particulary instate public schools can be a great deal- even if you don't recieve any aid- because the bottom line is much lower in the first place.
Outside scholarships may just reduce loans- but if there are a great many, the payoff would be worth it.
Some high tuition schools don't meet 100% of need.
Us News has listings of amount of loans students graduate with.
Beware schools that "gap", even if they meet need freshman year, they may reduce drastically need in later years, even if circumstances change.
High loan amounts will restrict opportunities after graduation, so think carefully before taking out loans of more than $20,000 ( for all four years)
In our extended family we have 5 college age students
One is attending a community college for a tech program and possibly transferring later to a 4 year school.
One worked two jobs while attending a community college for two years and is transferring to a 4 year school this fall.
His sister is attending a public school in the state where her father lives- she is getting instate tuition.
Two sisters- one who just graduated attended a private college with large endowment and recieved lots of need/merit based aid.
My daughter took a year off to earn an educational stipend, and attends a small private college with a large endowment and need based aid.
As you can see many ways to make it work. The flexibility students learn while dealing with paying for college, will teach skills they can use later in life.
Yes even our EFC is 1/4 of income leaving not so much to live on, but we know we have alternatives and are grateful for the choices we do have to educate our children that others do not.</p>
<p>Or, we can herd all of the "middle income" kids into state schools.
What I have seen is that state schools are often choices for higher income families who for whatever reason don't want to fork out private school tuition. State schools are often a very good choice- if my daughter hadn't gotten into her first choice ( which was a reach) with great aid, she would have been very happy to attend a state school.
families that are actually middle income- probably have an EFC that would match tuition- room/board at their state school, but if they can find a great private school that meets 100% of need, they would recieve aid above their EFC.</p>
<p>
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I don't think muddling has anything to do with it. Federal aid as determined by Fafsa is very restrictive. For those who do qualify for assistance, some colleges do not even meet the "gap" with loans and scholarships. Basically for a middle class family, this means college is paid for from savings and BIG unsubsitized loans.
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<p>Muddling is exactly what it is because most of us have no idea financially what how things are going toplay out until we get the package. I think it means that we have to cast an even wider net of choices when looking at colleges. </p>
<p>The search has to include a comibination of schools that meet 100% of demonstrated need, in addition to schools with merit $$ (both need and non-need based merit) and public schools. If you have a $20,000 fafsa efc, at a school where you file the profile (because first of all the school has insitutional funds and second, they do take a more comprehensive look at your financial picture) your EFC could be less.</p>
<p>If money is really the dealbreaker in the process, it may mean that we may have to give up "name prestige" an possibly come down a notch as far as looking at the rankings and schools and look for schools wher S/D is at the top of the applicant pool in line for merit $$.</p>
<p>While state schools are indeed an attractive option vs. the $40k+ sticker price for privates, if you are an out of state student at some schools you are paying almost the equivalent of private school. If your child is not in the honors program or a recruited athlete where s/he is getting $$ to attend, you are pretty much paying full freight. </p>
<p>You're absolutely right, the publics do not even meet 100% of your demonstrated need even if you are in-state so imagine what it is if you are out of state. Being from NYC, had D gone to UVA or UMD-College park, the sticker price for us would have been comprable to the private schools. I know in our case, we did look at a variety of schools because we went into this with the mind set that since we had to pay something and loans could possibly be a given anyway, we were going to get the biggest bank for our buck. In the end for us, going private (Ivy with endowment giving great need based FA) ended up being an less expensive alternative than attending our state's public school where the only aid we would have gotten was going to be loans. I used to shake my head when I heard kids applying to a bunch (10+) schools, but now I understand that there does need to be a variety of schools that fit each financial category.</p>
<p>Beware schools that "gap", even if they meet need freshman year, they may reduce drastically need in later years, even if circumstances change
to clarify
I meant that aid will be reduced- I have seen several students on these boards for example- determined to attend their first choice school even though even starting out freshman year is a huge struggle when the school isn't offering enough aid.
Since schools may offer you their BEST package freshman year- be very aware that if it isn't enough freshman year- it isn't likely to get better by senior year.
It is so sad to see students have to transfer after just not being able to come up with the money- not for academic reasons.
I would much rather see them attend a school in the first place that is a reasonable fit- something they and their family can live with, than attend a school that will make them go bankrupt ( and bankruptcy won't exempt you from paying back college loans)</p>
<p>"All the political talk about supporting education seems to be a big pile. George has decided to spend our money waging a war in Iraq. I don't want to bring politics into this discussion, but if the war is not successful, he will go down in history as one of our worst presidents."</p>
<p>That is entirely possible, but his support of education has to be measured against his predecessors, and not in a vacuum. Under the Clinton administration, and despite huge increases in revenues, the funding of education DECREASED. When Bush came into office, despite being handed a country reeling in one of its worst depressions and corrections, promptly DOUBLED the federal education budgets. That said, there are several limitations imposed of federal outlays, and not much can be done for the states and districts that never learn how to live within their means. All the money received in the illusory go-go years has been spent, and not all of it wisely. </p>
<p>As far as the FAFSA, it does often present quite a surprising picture. However, the numbers are pretty straightforward and are based on income and assets, but does not account for the fact that, in general, the US population spends MORE than its budget should allow. The government does not expect nor can it force families to change their spending habits, but they do expect the families to be the PRIMARY responsibles for their higher education bills. Graduating from high school often means that the free rides are over! </p>
<p>If we expect the government to foot a bigger portion of our bills, we would need to accept to pay a lot more in taxes. Since we finance most of our K12 education on the back of property owners, it may come as a surprise that education does have a cost that far exceeds our contributions. </p>
<p>The worst news is that the costs are spiralling upwards and little progress is made where it is most needed.</p>
<p>I don't even fill the FAFSA out anymore. Waste of ink. Or whatever you use. I forget.</p>
<p>"However, the numbers are pretty straightforward and are based on income and assets, but does not account for the fact that, in general, the US population spends MORE than its budget should allow."</p>
<p>You make it sound as if the Fafsa calculation is reasonable if we only spent our money frugally. I don't think so. Between federal, state, social security, medicare, sales, and property taxes, government already takes close to 50% of my gross income. According to the Fafsa, I should be able to come up with about 30% of gross income. That doesn't leave much to live on does it? Considering the hugh tax rate, it is very difficult to save enough or pay off the loans.</p>
<p>Over the years, I have paid enough taxes to send a whole bunch of kids to Harvard - or pay for a fraction of the cost of one cruise missile. I am not expecting a free handout just a wiser use of tax money.</p>
<p>There's a lot of colleges out there that a student can go to for under 20,000 a year. Many good lacs will discount up to 50%. Most flagships states are under 20 and the lesser states between 10 and 15. Yes if you're making over 100 grand and have substantial assets you're going to be paying full price at Swarthmore, the Ivies, and most of the top schools, but there are plenty of other choices. Schools like Elon, Vermont, College of Charleston which are not accessible to lower income students have become full of kids from upper middle class families, who want good quality at a discount price. There's a lot of whining out there, but the reality is pretty much the same - if youre a good student with ec's and an SAT over 1300 you're going to have choices whether youre rich or poor. The folks with the least number of choices are poor kids and poor students.</p>
<p>I think you should hire some kind of financial aid advisor. I'm not really sure where to find them, but i'm sure if you do research you could hire someone. My friend's parents did that. They are reasonably wealthy, both parents are well off lawyers, and she got a great fin-aid package.</p>