FAFSA EFC of $47K

<p>"Here’s my math. AGI of $150K. NU COA of $57K. Zero aid. That’s 38%.</p>

<p>I’ve saved up $200K total, for two kids, over 18 years of coupon clipping. (I was probably earning $50K AGI when I started. Yes, the stock market helped at times, and then it really hurt at others.) Let’s say No. 1 Son goes to NU, and COA increases a mere 5% per year. Total COA would be 245K. In our situation, we’d have to borrow $145K, or just less than total income. (Hopefully the economy will pick up, and I’ll start getting raises again.)" </p>

<p>Or you do what we do - have the kid take out the maximum Stafford Loans as their own skin in the game, give the kid responsibility for his own books and spending money with summer and break earnings, split the remaining 30k/year or so into 10 equal easy payments of 3k/month using the college’s payment plan, and give up on dinners out, wardrobe upgrades, vacations, presents, and other assorted goodies for the duration.</p>

<p>It’s no fun but it actually goes quickly . . .</p>

<p>"have the kid take out the maximum Stafford Loans as their own skin in the game, give the kid responsibility for his own books and spending money with summer and break earnings, split the remaining 30k/year or so into 10 equal easy payments of 3k/month using the college’s payment plan, "</p>

<p>Carmen, you are a genius! </p>

<p>That is exactly our approach. And I mean exactly. Great minds… haha.</p>

<p>I understand why Harvard, Yale, Princeton, and Stanford’s application numbers are increasing; these schools are truly affordable to the families with incomes of less than $180,000. If your kid has excellent stats, you’d be nuts not to buy that kind of a lottery ticket. (The odds of acceptance are actually MUCH better than the odds of winning the lottery, despite the low acceptance rates.)</p>

<p>What I don’t understand is why Northwestern, Boston College, Duke, Bucknell, and Notre Dame keep getting more applications. These schools are not affordable for families with incomes between $85,000 and $200,000 – unless those families have somehow managed to put a lot more money in college savings plans than our family has. Are those schools now populated primarily by offspring of families whose incomes are in the top 3 percent of US households, or are other middle-income families hocking their souls to send their kids to these expensive private schools?</p>

<p>Not sure having a few thousand dollars of ‘skin in the game’ provides any incentive whatsoever…if having your children take stafford loans is the only way to make college feasible,ok…But if trying to teach a lesson as you drink your 5 dollar lattes,seems like a waste…</p>

<p>Just have to defend…No personal experience, since my kid was waitlisted last year, but if you read threads in the Notre Dame forum you’ll find that just about everyone is receiving FA that they are satisfied with. It doesn’t sound to me as if ND is not affordable for families in the $85-$200k range. ND is a school that “meets need” and doesn’t seem to play games with the calculations.</p>

<p>"But if trying to teach a lesson as you drink your 5 dollar lattes,seems like a waste… "</p>

<p>Never ceases to amaze me how folks leap to incredibly judgmental and incorrect conclusions on these boards…</p>

<p>I agree with the concept of “skin in the game”. That is also what we are doing. DS is bypassing a full ride to go to a college with little FA because of our EFC.</p>

<p>re skin in the game - </p>

<p>Kids have no concept of how much debt $200K is and what it’s effect on their life is, or $100K, or $50K, or even the full Stafford amount.</p>

<p>I don’t believe 18year old kids in general take their studies more seriously or are more conscientious or whatever, just because they signed their name on a piece of paper and money they never see or touch moves from one place to another. I don’t think it is real to them. If it was money they actually earned - maybe. But loans?</p>

<p>

Why are you letting your S do this? I mean that seriously - if you feel like sharing, I am interested in the thought process.</p>

<p>^ Isn’t the usual reason that the full-ride school is not considered to be as good a fit for the student, and the family can afford the more desired school? Just a guess in this case.</p>

<p>If ‘skin in the game’ is necessary to attend the school,i might find this acceptable…BUT, telling your children they need to sign 5k loans in their name,and actually believing they will now do what is expected of them is ludicrous…as a post above mentioned,they have no concept,and a piddling 5k is not going to change them…sorry,bit notrichenough is ‘spot on’ with their assessment</p>

<p>Here’s our motivation for “skin in the game”. I am in no way naïve enough to think that our kids will be more motivated or will put in extra studying hours. But I do feel it introduces a level of responsibility in that they are active participants in the financial burdens of their educations. </p>

<p>I was well aware that they had no clue what 50K/year actually meant. So I showed them. When oldest started her senior year in HS, I put together a spreadsheet and showed each of them what the real cost of going to college was going to be, including inflation (that 50K will be 60K+ by graduation). I then showed them what we spend/year on mortgage, insurance, food, etc. It was actually pretty eye-opening for them that one year of college was more than one year of mortgage and food combined. </p>

<p>When offers started coming in, we then gave them the option. If they chose state flagship or LAC with decent merit, we’d cover it all. If they wanted the dream, they were gonna have some “skin in the game” to make up the difference. They both chose the dream school. So far so good. Both kids are happy with their choices and doing well to date. They are quite creative at reducing their book expenses with online purchases, sharing, buying direct from other students, etc. And as for the Stafford loans, we do qualify for subsidized loans. So that’s effectively free money. They don’t know it yet, but as long as our family finances stay stable (knock wood), we’ll probably payoff those loans as a graduation presents. </p>

<p>Of course, maybe my high brow tastes in lattes, fine wine, and 5-star restaurants might also put that plan at risk. Ha.</p>

<p>Carmen, that is pretty much what we have been doing forever, it seems. We have 5 kids and they went/go to private schools precollege. We are lucky to be able to afford it, but it would be nice to be able to afford it easier. </p>

<p>My brother visited me last week and rented a brand new Buick SUV/van for the duration. Oh, my. Such luxury. I’m back to my broken down piece of junk Subaru that runs just fine on a 3 year old engine though it looks like break down and I’m jealous. But I’ll trade for that Volvo wagon sight unseen.</p>

<p>Nice post goru^^^^^^…showing your children the path to their education is a whole lot differnt then saying they need ‘skin in the game’ to keep them vested in their studies,etc…</p>

<p>“So that’s effectively free money. They don’t know it yet, but as long as our family finances stay stable (knock wood), we’ll probably payoff those loans as a graduation presents.” </p>

<p>Subsidized loans are “free money” only if you can pay them back within 6-9 months of graduation. Otherwise, they’re a monkey on your back. H works with a woman whose daughter will graduate from grad school next month. She has $10K in loans from undergrad, and $90K in loans from grad school. She can choose between a 25-year payback (till she’s 50 years old!) or a 10-year payback. WITHOUT accounting for interest, the 25-year payback is @$333/month and the 10-year payback is @$833/month. </p>

<p>When you had your kids put “skin in the game” did you show them what their monthly payments would be? Or did you know already that they would get a nice $25K or so graduation present?</p>

<p>to carmen517, who said: “split the remaining 30k/year or so into 10 equal easy payments of 3k/month”, really? (or are you being sarcastic?) $3000/month is an “easy” payment? Maybe for you, but not for us, and we’ve already given up vacations, wardrobe updates, etc.</p>

<p>Here’s a problem for us (and many on this board): FAFSA’s calculations assume an average cost-of-living for everyone in the US. For those of us unlucky enough to live in high cost of living areas, the “income protection allowance” falls far short of what it takes to live (modest home mortgage, ridiculous property taxes, high auto insurance costs, high energy costs, food), but some colleges will not take that into account (“We have to treat everyone the same way.”) so not only do we have to have our kids take loans as “financial aid,” we also have to take loans to cover a good part of our EFC. And we won’t have any money left at graduation to pay off our children’s subsidized loans.</p>

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<p>A pal of mine is a prof at a regional university. He claims he can ABSOLUTELY tell you which of his students have skin in the game. So I believe he would disagree with the assessment.</p>

<p>Of course, it is a personal decision. In our case, McSon is funding a quarter of his COA, (part via loans and part from earnings) although that COA is dramatically reduced by his tuition scholarship. We did not necessarily “need” to have him on the hook for a quarter at all – after all, he did earn his scholarships. We “chose” to have him on the hook for a quarter of it because we wanted to communicate that we were equal partners in the venture and we wanted to ensure that he approached his studies assessing value. He is very particular about assessing his courses in this light – and never chooses a ‘fluff’ course as a result; also now avoids missing classes as he seems to realize it’s his own $ being wasted.</p>

<p>We also go over his loan statements every semester, and say – at this new number, you will pay x a month over 10 years and x amount of that is going toward interest. He is very conscious of that now and seems to be growing a little more frugal (eg. wanted a single room last year and paid the $2000 differential out of his own summer earnings…however, next year he has decided instead to share an on-campus 2 br appt. and go off meal plan because he believes he can cook better food for less money – which in total, will save him about $3,000 by his estimates).</p>

<p>Part of this is “dawning maturity” and part of it is the recent realization that he’d like to attend grad school and will really need to manage himself in order to do so. </p>

<p>So while I completely agree with the statement that loans are “not real” to an 18-year-old, I do also believe that we as parents can help “make them real” while at the same time communicating some confidence in our childrens’ capability to be self-responsible. One way to help illuminate this is to encourage them to save the amount of interest each month their loans will accrue in the future. There are myriad other ways.</p>

<p>So, just my .02 – I know every case is different. I just think these issues are actually great opportunities for our kids to practice real world functioning ;)</p>

<p>Carmen was using that as an example. Yes, for some $3K a month is doable. I always shake my head at those monthly plans that are supposed to be such a great help in paying for college. The least of my problems in coming up with the payment is whether is should be monthly or otherwise. </p>

<p>It’s more the idea of divvying up the cost into a number of areas, primarily between the student and you, and among past, present and future payments. If you and your student have saved at all, there is that source of funds. </p>

<p>Our personal maximum cost that we can cover as parents is $35K but it ain’t coming from monthly payments out of current funds. It’ll be through savings, current funds which we are already putting into savings in anticipation of the first payment that will be due in August, and whatever we end up borrowing. DS will pay the rest. He already has some jobs lined up there at the school for the school year.</p>

<p>I seriously doubt anyone can tell who may have ‘skin in the game’ or not…no way…</p>

<p>

Depends on the kid I guess. I had no skin in the game and took my studies very seriously. I felt I could do the same with my kids. My oldest actually told me that he felt more responsible to do well if we were paying than when he was. The other two graduated top of the college class and went on to grad school. No skin in the game, but I can’t imagine they could have taken it more seriously. If your kid needs skin in the game, maybe they aren’t ready.</p>

<p>I think when anyone is referring to any fault of a kid (no matter what, but for example, the “skin in the game” issue). Keep in mind that here on CC all the little snowflakes of the parents here are all perfect in all manner, always making the perfect decisions and always studying hard… so of course these comments by posters don’t apply to them.</p>

<p>but in the real world where some of us live, we understand what the poster is trying to say.</p>

<p>I always shake my head at those monthly plans that are supposed to be such a great help in paying for college. The least of my problems in coming up with the payment is whether is should be monthly or otherwise.</p>

<p>Likewise. Nice to pocket a few bucks’ interest, I suppose, at today’s thrilling money-market rates.</p>

<p>Re: Skin in the game, I completely agree with 3bm that many of the afore-mentioned “spoiled overachievers” would feel more responsible to do well if a parent or relative was picking up the tab. Talk about a sense of obligation.</p>

<p>I had lots of skin in the game; too much. I paid for about 60% of my college expenses by working two part-time jobs, and of course summer jobs, and taking out the max in GSLs. This put a damper on my academic efforts, shut out internship opportunities, and for me made college all about “getting the hell out and getting a job.” Once I was out, I worked two jobs to be able to make all the payments. Put away the violin: I have been successful, but more because of my own ambition and work ethic than anything that happened in college. If the circumstances were different, I believe I would have gotten much more out of it, personally and professionally. I am not about to make my own kid a “poster child” for obligation and responsibility; he’s already proven to me his abilities in those areas, in many ways. Still, he has expressed willingness to do his share financially, whatever that reasonably works out to be, and I think we’ll arrive at an appropriate commitment.</p>