Figuring out how to pay for college for a HS junior

Paying for College
1

<p>I would love to pick people's brains as to how we should approach this year and next year, having come late into the game but still wanting to be as prepared as we can be. Clearly, the best way to pay without debt would be to have the income and savings for college but we don't. Here are some stats and thoughts and I'd love to hear advice on strategies. I've read a few books on paying for college but need to reread them and my notes.</p>

<p>Income 2010: Dad-78K Mom- $300 HS Junior- $1500</p>

<p>Have not looked at FAFSA. Collegeboard website EFC comes in around 10K but if income goes over 80K for 2011, which is likely by 1K or so, that will increase.</p>

<p>Parents savings: 0 (We don't expect this ever to change much as there are medical needs and a 53 year old house in need of much repair like new roof, etc)</p>

<p>Dad's 401K: 46K (Dad is in his 50s and might retire before oldest is done with college but would find another job, one not so physically demanding)</p>

<p>Home equity: 70K </p>

<p>Junior's savings: $2,600</p>

<p>Junior's 529 (grandparents set it up): 5K </p>

<p>2 more younger kids at home</p>

<p>529 account will probably be used in senior year for more CC classes and maybe one or two university classes, so it will probably finish around 3K.</p>

<p>Junior, homeschooled/some college courses, has potential to make good money, 3K+, this year and either save it or buy a used car. Junior uses income for most discretionary costs (car insurance, phone, clothes, netbook, sports fees, musical instruments, etc)</p>

<p>Juniors stats: PSAT 225 so will be NMF most likely; 4.0 GPA 2320 SAT; some national awards and UMR status. Overall, possibility of going to highly selective college decent.</p>

<p>Right now on the list are 4 safeties that give full rides for NMF (and one school that offers combo full rides for another talent, chess), local UC, and some reaches such as Princeton that say they've eliminated loans.</p>

<p>Local state univ. isn't an option as junior is now auditing upper division courses in intended major so coursework wouldn't work.</p>

<p>Junior is interested in looking for scholarships this summer and might do science research and go for one of the "biggie" science scholarships (a real longshot!). Has applied for a 6K scholarship through father's work and has a small (under 1K) bowling scholarship waiting.</p>

<p>Given these stats, what would be the best way to think about paying for college?</p>

<p>1) How should junior use his income? Should he spend his savings? Should he try to work as much as possible and save it all, fully knowing he'll be expected to use it to pay for college?
2) Should we use up as much of 529 now or should we hang onto as much of it as we can?
3) Should junior try to find as many smaller scholarships as he can?
4)If junior somehow made it into a highly selective college and also got some merit scholarships, how would that effect what family is expected to pay? Say, COA is 50K and college says family should be able to come up with 9K and junior get the 6K scholarship, is family still on the hook for 9K? If so, how does family come up with that since there are no savings? Is it inevitable that family would have to take personal loans? Would this be a time to borrow from other relatives?</p>

<p>I know I have many more questions but I'm trying to wrap my head around it all. Thanks!</p>

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<p>Parents can take PLUS loans- & with that income EFC may be higher than $9,000.
Depending on how many other children in family & ages- EFC will be 1/3 to about 1/4 of before tax income</p>

<p>If he attends a school that meets 100% of need- those schools generally do not offer merit aid & family is expected to pay EFC.</p>

<p>I don’t know alot about Ivies, but they have more caps on assets & loans.</p>

<p>PROFILE which many private schools require can consider medical expenses, but IMO is there to identify assets to be used for college. :rolleyes:</p>

<p>Depending on your state- I would also investigate the reciprocal agreements some states have with neighboring states.
Even if he has exhausted the resources of the public universities in your state, a neighboring state may have a program that is workable & tuition is usually only 150% of their instate tuition.</p>

<p>Our experience if it helps- our oldest attended an expensive LAC that met 100% of need. We had two kids, one much younger. Our income when she was a freshman, was less than $60,000. Our EFC was about $11,000. We did have more equity ( as this was during the bubble), so we refinanced to access some of that money.
She also had maximum Stafford loans, a small Perkins loan & work study.
While the EFC seems like a lot, it was about what a public university cost would be, so we did not spend much more than if she had attended a public university in state.</p>

<p>SInce your son has college credit, that should reduce overall costs for his degree as long as he attends a school that will accept them.</p>

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<p>The highly selective schools generally do not give merit awards.</p>

<p>Outside scholarships are typically only for 1 year. So if junior were to get several you may get the first year paid for but then what would you do after that?</p>

<p>Also at most schools outside scholarships will reduce the amount of institutional aid, not your efc.</p>

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<p>You also did’nt mention if you have younger kids to put thru college as that will affect your plans as well. You don’t want to use all of your borrowing power on the oldest and then be in the position of not being able to do the same for the others. I have seen several posts on CC where the parents put all savings/borrowing power on the oldest and then nothing was left for younger siblings.</p>

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<p>Say, COA is 50K and college says family should be able to come up with 9K and junior get the 6K scholarship, is family still on the hook for 9K?</p>

<p>Typically, yes, your family is still expected to pay their EFC. If you get $9k in private scholarships, that ends up going towards need. So, if your need is $40k and you get $9k in private scholarships, that just goes towards the $40k in need.</p>

<p>It sounds like you’re trying to reduce/eliminate your family’s contribution. If you take a full-ride scholarship, that would achieve that.</p>

<p>If you get accepted to one of the 4 schools that give “super aid” (Harvard, Yale, Princeton, Stanford), then the parents’ and student’s contributions might be lower.</p>

<p>Thankfully, you have stellar stats so you have options. Those who don’t have such stats often find themselves in a pickle.</p>

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<p>To get a more accurate idea of what your EFC is likely to be, print out <a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf&lt;/a&gt; and work through it on paper. This way you can easily try different scenarios.</p>

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<p>Thanks for the feedback, emeraldkity4. I know that dad does not want to take any loans-period. So, if there are loans, junior will have to be the one to incur them. Do you think it’s best to have junior to earn and save as much money as he can? He’s got great earning power right now (teaches violin, performs violin, tutors math) I think he can work as a math tutor (one of the 3 jobs he does now) to help finance his education as we understand this is a very marketable skill, even at Ivies. We want to avoid loans if at all possible.</p>

<p>I guess I need to spend time really understanding how each school on the list views our stats (if that is possible).</p>

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<p>kela10, yes there are two younger children, ages 13 and 6, so no, we definitely will not take equity or loans for junior; dad is clear on that. We are looking at all possibilities for colleges. </p>

<p>mom2collegekids, based on a conversation with someone in a local math circle (one of the activities junior is involved in), college admissions are tough out there, even for the best of students. Junior’s stats and UMR status are helpful but after said conversation, we went back and added several schools with NM scholarships, schools that might be an ok fit.</p>

<p>Mom2collegekids, I was afraid that what you said is true in that scholarships won’t decrease EFC; yes, I am trying to decrease EFC. I know through a seminar, some people have had success with finding lots of scholarships but it sounds as if most are for only one year. This is a problem. Ugh.</p>

<p>When does a student become independent? Will junior be considered dependent all 4 years of college?</p>

<p>Happymomof1, I will try going through the link you sent and see what the stats indicate.</p>

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<p>Ok, I see students don’t become independent easily and that junior would be a dependent all 4 years of college.</p>

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<p>Yes, students are considered dependent until they turn 24 or get married.</p>

<p>You may also wish to consider USC, which gives very generous need & merit-based awards, including full-tuition and more. I have known several kids who have received this–one just became an MD & his sister is now attending USC with a generous merit+FAid package as well. Another friend’s S is attending and getting full-tuition.</p>

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<p>One thing that might help re: merit- some schools, like Colgate University & I expect there are others, * do not appear* to offer merit, although they do meet 100% of need.</p>

<p>[this</a> thread might be a little outdated- but worth a look](<a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/63770-best-schools-give-most-merit-based-aid.html]this”>http://talk.collegeconfidential.com/financial-aid-scholarships/63770-best-schools-give-most-merit-based-aid.html)</p>

<p>However, they may have outside scholarships ( as from alumna) dedicated to continuing students & /or with certain GPA that consider merit as well.
& being a NMS will also open other doors in regards to scholarships.</p>

<p>(** however- outside scholarships most often will reduce loans- they will not reduce the EFC**)</p>

<p>IMO I think it is reasonable that students can take out about $20-$25 in loans for their * total* undergrad degree, any more & they would impact their ability to find work( or pursue higher degrees) as they will limit what jobs they can even accept because of loans.</p>

<p>If dad does not want to take out any loans, how much is he willing to contribute from current income?</p>

<p>Unless there are really unusual circumstances, I don’t think it is reasonable for parents to be unable to contribute anything to their childs college expenses.</p>

<p>Also- it is worth mentioning,** that even with schools that meet 100% of need, need is met by any combination of loans, workstudy & grants.**</p>

<p>My daughter did have a generous grant, but other students at her school, had higher portions of loans to meet their need than she did.</p>

<p>Besides the reciprocal agreement schools, I would look at schools that don’t necessarily meet 100% of need & whose overall student body is below his stats. They may offer merit aid to strong students- although in this economic climate it might take a while to find a decent fit.</p>

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<p>emeraldkity4, I think dad will contribute as much as humanly possible; we just don’t know what that will be. If junior goes away to college, certainly costs at home (food, gas, educational costs, etc) will shift and free up some income to go to cover tuition, room and board in college. If colleges have payment plans, that might make it easier for dad. I would guess, reasonably, we are thinking maybe 5-6K or so a year, we might be able to come up with. We’re not poor but for whatever reason (and we live in a very small home with very few things), we still live paycheck to paycheck. It could just be a bad year with certain medical costs and some care for aging parents and an old house in disrepair-we’re trying to cut back on food costs, probably our biggest area of overspending with special food needs for 6 and 13 year old (type 1 diabetes and food allergies). We do get financial help for certain classes and ECs such as music lessons, for 13 year old and junior through an organization. That will go away when junior turns 18, which will be next spring.</p>

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<p>I think it does help to really keep track of where spending goes.
We also live in an old house ( 1901) and has needed a new roof, ever since we moved in ( which was 1983)- but for instance- food costs can be really high- I just started cutting back, by really using coupons which I have only sporadically done before.</p>

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<p>Happymomof1, on the EFC worksheet, it asks some questions relatingto the FAFSA. I can’t get access to the FAFSA yet, so I’m not sure what to fill in. Question 6 refers to “total additional financial information” from the FAFSA and it’s a number one could possibly subtract. Would these be medical costs or ???</p>

<p>Yes, emeraldkity4! We are using coupons more than ever. You’re right-food is so expensive but we are learning the ropes from several families who have 7 or 8 kids.</p>

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<p>Ok, I went through the EFC worksheet that Happymomof1 sent the link for and EFC was exactly 10k (that includes for both parents and junior). So, the question then becomes: If dad thinks we can do 5K a year, what are the options besides loans for the other 5K a year?</p>

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<p>Hi, I think I know you from homeschooling circles. </p>

<p>You don’t only need to be looking for schools that award full NMF. Many liberal arts colleges offer merit aid and some have merit aid that is full tuition, or even full ride. The same goes for the honor colleges or programs associated with some of the large state universities. Unfortunately, I don’t think your EFC will be anything like 6 or 9k. When we had an income like that, our EFC was 16K. That was with assets below the exclusion line.</p>

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<p>This is just my opinion here-other people may have a different experience but I find the thought of saving money while your kid is living at college highly overrated. I don’t think I am saving anything.</p>

<p>For the most part second half of senior year and the following summer my son was rarely eating at home anyway. I may be saving a little on food but not much. My water bill is about $30 a month less when he’s not here. Thats about all the savings I see.</p>

<p>The expenses for me are going back and forth to his school for move in, parents weekend etc plus bringing him home for breaks. Whenever I go to see him I always slip him a little cash for going out to eat with friends etc. When he comes home he has a list of food/bath items he needs, haircut, shoes etc. So I would’nt bank on saving a whole lot.</p>

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<p>^ I agree with Kela. Mortgage, heat, etc is pretty much the same so it’s some amount for food and water. </p>

<p>OP, I assume you’ve looked at the NMF scholarship thread. There are some very good schools on there. <a href=“http://talk.collegeconfidential.com/national-merit-scholarships/649276-nmf-scholarships-updated-compilation.html[/url]”>http://talk.collegeconfidential.com/national-merit-scholarships/649276-nmf-scholarships-updated-compilation.html&lt;/a&gt;&lt;/p&gt;

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<p>*Unfortunately, I don’t think your EFC will be anything like 6 or 9k. When we had an income like that, our EFC was 16K. That was with assets below the exclusion line. *</p>

<p>I also thought the EFC might be higher. </p>

<p>* I was afraid that what you said is true in that scholarships won’t decrease EFC; yes, I am trying to decrease EFC. I know through a seminar, some people have had success with finding lots of scholarships but it sounds as if most are for only one year. This is a problem. Ugh.</p>

<p>*</p>

<p>Info from seminars is often exaggerated for effect. Private scholarships are very hard to get, often for small amounts, and often for incoming freshmen. </p>

<p>How much do you think you can contribute each year towards your child’s education? this may be difficult to answer when money is very tight. I would suggest underestimating your ability to contribute because after having kids in college for 4 years now, I can tell you that there are always some unplanned expenses.</p>

<p>In my opinion, the best strategy is…</p>

<ol>
<li><p>Apply to the few schools that give “super aid”…HYPS…and…those that don’t put any loans in aid packages (such as Vandy). </p></li>
<li><p>Apply to the schools that give HUGE merit scholarships for stats…either for NMFs or for those with stellar stats.</p></li>
</ol>

<p>*This is just my opinion here-other people may have a different experience but I find the thought of saving money while your kid is living at college highly overrated. I don’t think I am saving anything.</p>

<p>*</p>

<p>Very true. I’m not saving anything either with 2 away in college.</p>

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<p>Hi MilitaryMom,</p>

<p>I’m not sure how it came out to 10K but I went through all the steps in the link and our EFC was about 9400 and juniors was 550. Maybe because we have 0 savings? Or maybe because dad’s income was actually 76K (2K went to his 401K)? I’m not sure.</p>

<p>So, schools currently on the list: (And we don’t mind sharing; we need as much info as possible)</p>

<p>Reach: Princeton, Harvard, Penn
Reach/Match: Davidson, Northwestern, Harvey Mudd, Vanderbilt
Match: UCSD, CalPoly
Safety/Match/NMS: UTD, U of Tulsa, Texas A & M, Baylor</p>

<p>Possibles to add to list: Rice, MIT</p>

<p>Schools that were on list but probably won’t make the cut because of EFC: Grove City and Taylor</p>

<p>So, I guess the next step is to explore, in depth, the policy of each school on the list.</p>

<p>First choice schools for junior (no visits to these schools yet, so…) are Princeton and Vanderbilt.</p>