<p>Posted this elsewhere and thought this is worth a current new topic re: can "financial aid" counselors help those that need help?</p>
<p>"Let me ask a rhetorical question? Family A and B have the same income...Family A "does the right thing" and pays down the mortgage when they can, sacrifices and saves for their kid's education whereas Family B is irresponsible, never saves a dime and repeatedly borrows equity from their home and spends it on fancy cars and vacations. They both show up in the college financial aid system with Family A at EFC of $40K in PROFILE/IM methodology and Family B at $15K. Family A could have a $15K EFC if they lived like Family B. </p>
<p>Is it "fair" that Family B gets their need met at private institution X whereas Family A doesn't get aid and decides they cannot afford the $40K sticker price?</p>
<p>How about this scenario? Child is an orphan and their aunt/uncle is her guardian. Child is bright student, has overcome the tragic death of her parents as a child and most schools would love to have her. Guardians have no means of paying for college and as a result the only approach they know (via high school counselor) is to apply to public schools in their state (sticker price $25K). Even though EFC is $0 (Child is independent for FA purposes), the only money she could reasonably get is government free money, max Pell Grant perhaps and a comparable state need grant. That leaves a remaining bill of $15K+ per year which the guardians cannot afford (or don't think they can). As a result, the Child either tries to goes the "hard way" with daunting odds or does not go at all as 30-35% of our kids that graduate from HS do!</p>
<p>Wouldn't a "financial aid" counselor be helpful to these 2 families?"</p>
<p>First of all, I am not sure that the same income would result in such a disparity of EFC for two similar families. That would be a LOT of savings for Family A to end up with $25k more in EFC, considering the asset protection allowance. I could be wrong, though.</p>
<p>As for the second scenario, this child has options that are affordable. $5350 Pell is guaranteed. Assuming student applies on time, there will likely be institutional aid at many schools. Bottom line, the student CAN go to college. </p>
<p>My personal feeling: Don’t pay a counselor to do what you can do. A little research will give the vast majority of families all the info they need.</p>
<p>In the interest of full disclosure, I work in a financial aid office & cannot charge for advice. Scottaa is a private counselor, I believe … so maybe I am jealous! ;)</p>
<p>I talked to a mom today who filled out her CSS Profile for a college to which her child has applied ED. After submitting the Profile she met with a financial aid counselor who told her many, many things she should do differently on the Profile. She also had some suggestions about ways to “hide assets” dealing with shifting money out of the 529s that even with the penalty attached would work out better from a financial aid perspective.</p>
<p>Anyway, this mom didn’t feel comfortable with the hiding assets ideas, but was able to adjust her numbers in a legit way that she wasn’t able to figure out how to do on her own.</p>
<p>So, I guess in this instance it was worth it to her to hire someone. Now she has to send the ED school her updated info though… and fast.</p>
<p>There are ways you can shelter assets, but you have to take a hard look at whether or not it is worthwhile. You run the risk of not having the assets available, or getting hit harder with an income penalty when you do access them. It does work, but there are plenty of downsides you need to be aware of.</p>
<p>Most of us are here because we chose to do the research and run scenarios on our own -either through necessity or because we’re gluttons for punishment! But I believe that college counselors can be very helpful for those who can’t/won’t put in the hours it takes and in helping to identify choices that may not otherwise come to light. The bright student may have great merit aid opportunities at a college that isn’t well known, for example. I believe that may be included in some counselor’s services, such as scottaa’s, but may not be in a general “financial aid” counselor’s. </p>
<p>I haven’t seen any cut and dried distinctions and there doesn’t seem to be licensing regulations for these folks (I may be wrong) so it would involve some checking references etc. before signing a contract. Many of the financial options for reporting on CSS/FAFSA can be found in books such as “Paying for College Without Going Broke” and on websites like finaid.org - but, again, it takes time to research.</p>
<p>perilous - in your first two examples 95% of the time the child from family A will make out better than the child from family B.
Very few schools provide “full need”. Those that do have their own way of coming up with EFC and require more detailed financial information.
At 95% of schools, kids with a low EFC will have a gap and Federal loans will be a part of the package.
Most of the time the difference in financial aid packages between and kid with an EFC of $6000 and one with an EFC of $12,000 is nothing.</p>
<p>In your last case scenario - not true again. This child will also qualify for SEOG grants up to $4000 and Stafford loans $3500 - $5500 and maybe even Perkins loans. There are also other Federal grant available depending on the major. Kids can also earn money through working - $3000-4000 over the summer from working and $1000 - $2000 through work-study is not uncommon.
Also, the price tag of $25,000 - is this the cheapest school in the state? Most states have different tiers and this kid could probably pick a different school.
Also - if this kid was accepted into a “full need” college - he would go for free.</p>
<p>to just a mom…sorry but in CT that’s the sticker price. With all of the grants, loans and “work” they are still short $10K (if they figured everything out on their own as you suggest). Further, the vast majority of public schools do NOT meed need even close to 100%. Therefore, my recommendation to this family is to look at private schools that DO meet need!! Furthermore, I am a big believer in the kids finding the “right school” for them – otherwise, they transfer, take longer to graduate (only 36% in 4 years, 58% in 6!! per the Dep. of Ed.) or never finish at all (21%)…by opening up the doors to private schools and at least showing families they can go for the same or less as a public school, it increases the odds of the child finding the right school for them…</p>
<p>Regarding Family A and B…if family has saved even $40K for college in a custodial account, that alone adds approximately $10K per year to the EFC, plus parent assets and equity in their home – it adds up VERY quickly!! Again, does Family B “deserve” to get the aid by living extravagantly vs. Family A doing the “right thing”?</p>
<p>to amom…yes, I agree. I encourage families to get help no matter what; that included Chany’s book and resources like here, but counselors are an option too. The key is finding the right ones!! I tell folks to BE WARY, check out their services, their expertise/experience, get references, etc.</p>
<p>Further, yes, repositioning requires a full analysis of short-term and long-term consequences and pros and cons – make sure you find counselors that DO that as part of their services…unfortunately, like any services business, there are scams and people not doing the right thing out there, so must be careful.</p>