<p>I am a new poster but I have read through older posts and I've learned a lot. So a big Thank You! to all the knowledgable people here.</p>
<p>My son is a sophomore and an average (B) student. I am a single parent and my income is below $40,000/year. I do have some money saved for college as well as a little money in a 529 plan. We live frugally and when he is in college I will be also be able to use some of my current income to help with expenses. I did run my numbers through a couple of EFC calculators and my EFC came out to around $1000.00.</p>
<p>My son and I have already discussed the fact that money will be a major factor in deciding where he can go to college. His guidance counselor has suggested that he start researching colleges over the summer to be better prepared for his junior year college meeting with her. At that time she would like to know the schools he is interested in to make sure they are realistic choices as well as to make sure he is on track to meet the schools entrance requirements.</p>
<p>Obviously, in our financial situation, state schools are probably the best bet although he may apply to one or two private schools to see what kind of financial aid package they provide.</p>
<p>I have a uncle who is financially well off and willing to loan me additional money to cover any gap there may be. It would be preferable to borrow from him rather than use a Parent Plus loan because the interest would be minimal if any and the repayment options much more flexible than from a financial institution. I certainly am not talking about $20,000 a year or anything close to that. I won't put myself or my son in that much debt. However, to be able to borrow a little extra from him could possibly allow my son to have more choices when selecting a school.</p>
<p>I guess this might seem like a silly question but I don't want to make a mistake or somehow cheat. So my question is this: </p>
<p>Do schools or the government care where the extra money comes from? Do I need to report it somewhere or is it taken into account on following years FAFSA?</p>
<p>Thanks for any advice you are able to provide.</p>
<p>You sound like you have a realistic approach to the college search process and have set your son’s expectations well ahead of time. Be sure to continue these conversations with your son as he might not “get it” the first couple of times around.</p>
<p>As far as money from relatives goes, you typically do have to report any money paid on your son’s behalf. However, if this is a loan rather than a gift, it’s not usually reported.</p>
<p>One thing you might do if/when you arrange this loan is to formalize it via documentation rather than make it an informal loan. That way there’s no question that it’s a loan rather than a gift. In addition, there are annual limits on gifts that might also come into play - in 2010 the limit for nontaxable gifts is $13,000. If your uncle wants to lend more than this amount per year, he’d have to do it within his overall estate plan to make sure he’s not subject to gift taxes.</p>
<p>There are websites that facilitate peer-to-peer lending. They have slightly different flavors, but I believe there’s at least one (Virgin Money) that provides a vehicle that families can use to define the terms of the loan (interest rate, repayment schedule, even terms for forgiveness). Here are some you can look at:</p>
<p>[Borrow</a> and Lend Money From Friends and Family With Virgin Money](<a href=“http://www.virginmoneyus.com/]Borrow”>http://www.virginmoneyus.com/)
[Personal</a> Loans and Online Investing - Peer to Peer Lending - Prosper](<a href=“http://www.prosper.com/]Personal”>http://www.prosper.com/)
[GreenNote</a> - Welcome to GreenNote.com!](<a href=“http://www.greennote.com/]GreenNote”>http://www.greennote.com/)</p>
<p>If you borrow money from your uncle, you don’t have to report that. </p>
<p>Keep in mind that out of state publics will not help you meet need.<br>
If your EFC is $1000, then your son would qualify for some Pell money - about $4400. </p>
<p>Depending on your son’s GPA and his test scores, he might get some scholarship money at some schools, however if he’s a “B student” (meaning that his GPA is about a 3.0), that may be unlikely. </p>
<p>If your son would like to be awarded a scholarship, then he needs to get his grades up and score well on the SAT/ACT. That’s just something to keep in mind.</p>
<p>What state are you in? Some states are better at helping low income students. In-State schools can cost from about $15k - $25k per year.</p>
<p>(Also, be aware that some privates will want the financial info of his father. So, if that’s not do-able, you may want to avoid that.)</p>
<p>Thanks for the information. I will look at the family loan websites. We would have something on paper just to keep things fair. I appreciate his willingness to help out. I would expect any money loaned would be much less than $13,000 per year. As I mentioned I do have some money put away and family members continue to contribute to his 529 plan for birthdays and holiday. The 529 plan is in my name.</p>
<p>We are instate for Wisconsin. We also receive reciprocity with MN which mean we pay instate rates there as well. I know there are a few other states WI has agreements with for certain programs. </p>
<p>I have already told him that OOS public schools other than MN etc are not practical. He really wants to go to Univ of Kentucky for some reason. I told him that I was sorry but that would not be affordable.</p>
<p>I know his Dad may have to fill out paperwork for private schools. I would guess his income would not make much difference. He makes considerably less than I do as he prefers not to work. He is not remarried so there would not be a step-parent’s income to consider either.</p>
<p>I have encouraged him to keep working on his grades. He’s had a tough time with his foreign language class and with his speech class. After this year he will be able to select classes better suited to his strengths. He took the PLAN (pre ACT) test and scored well so I am hopeful there.</p>
<p>No matter what I am sure he will find a suitable school that is affordable where he can fit in.</p>
<p>*We are instate for Wisconsin. We also receive reciprocity with MN which mean we pay instate rates there as well. I know there are a few other states WI has agreements with for certain programs. *</p>
<p>That’s very good. However be aware that if your child would qualify for any grants from the state of Wisconsin, that aid may not be given if he goes to school in Minn (State aid tends to stay in-state). Your best chances for aid/grants is going to be from a state school in Wisconsin.</p>
<p>*
I have encouraged him to keep working on his grades. He’s had a tough time with his foreign language class and with his speech class. After this year he will be able to select classes better suited to his strengths. He took the PLAN (pre ACT) test and scored well so I am hopeful there. *</p>
<p>:) If your son’s school “weights” grades, then taking some AP classes can help boost a GPA. :)</p>
<p>* No matter what I am sure he will find a suitable school that is affordable where he can fit in.*</p>
<p>That’s a positive attitude!!! 
And, you’re right. Wisconsin has several good state schools!</p>
<p>I just looked quickly, the University of Kentucky has merit aid based on GPA/test scores and need. The merit scholarships begin with an ACT of 28. If he hits that mark he could always send an app with the clear understanding that it was a “let’s see what the cost is” type application. With my kids we had “parents choice” and “kid’s choice” in the college application process. When you son has his “list” together spend some time reading the financial aid pages…lots of valuable info on scholarships, grants, reciprocity agreements, etc. It’s always worth the time and effort to wade through the information, take note of deadlines, etc.</p>
<p>^^^</p>
<p>Very good suggestion. There are some families here on CC that include Parent/Mom Choices and Student Choices in the app process. That seems to be a good compromise!</p>
<p>University of Kentucky - The Provost Scholarship</p>
<p>Incoming freshmen whose minimum ACT score is 28 or SAT (M+CR) is 1250, and achieve a 3.30 unweighted high school GPA, will automatically be offered a Provost Scholarship. Minimum test score requirements are based on the composite or total score from one test date. Combined scores, also known as a superscore, from two or more tests will not be considered. The Provost Scholarship provides $1,500 per year, for up to four years of undergraduate study. No application is required.</p>
<p>The above won’t probably suffice since a $1500 scholarship off out-of-state costs won’t likely work for you. Out-of-state UK tuition ($18k) is double that of instate, so the COA is going to be around $30k per year. But, it could be your son’s “let’s see” choice.</p>
<p>You mentioned that your son wants UK for some reason. If he can tell you what he specifically likes about UK, you might be able to find some in-state schools that have similar things. :)</p>
<p>Thanks for the suggestions and positive feedback. </p>
<p>I’m not sure if my son really knows why he want U of KY. If I had to guess I would think it has something to do with sports. We have several schools in Wisconsin with good sports programs and I think once he visits some schools he will see he doesn’t have to go far.</p>
<p>Wisconsin doesn’t have a lot of specific grants. The only one I am familiar with is the Wis Covenent which provides I believe a maximum of $1500 per year though every little bit helps.</p>
<p>If he really wants to apply to Kentucky I probably will let him with the clear understanding it has to be affordable.</p>
<p>He is a typical kid and doesn’t always understand what it costs to live day to day but he is also practical and knows too much debt will hinder him in the long run.</p>
<p>He has one AP class this year and will have another next year as well. He was eligible for more but I hesitated letting him take them because I don’t want him to be overwhelmed.</p>
<p>Wisconsin doesn’t have a lot of specific grants. The only one I am familiar with is the Wis Covenant which provides I believe a maximum of $1500 per year though every little bit helps.</p>
<p>Very true! and it’s better to get $6k for free (4 X $1500) from the state then have to pay back $6k with loans. :)</p>