Financial Aid Crisis

Paying for College
1

<p>Hi Parents,</p>

<p>I know that you may not want to hear my history about financial aid, but this is a very serious issue.</p>

<p>Where we live, the city government and public school districts are facing financial budget crises, and they are cutting back on wages, salaries and benefits to their workers. My mother (single-parent household) received a 12% reduction in her first job's salary + benefits for the 2005 - 2006 year. In addition, she used to work a second job just to help pay the bills. Her second-job employer just laid her off because the employer's business is having financial problems. Right now, my mother has lost nearly 30-40% of her regular income. We have no help (my father is non-existent in my life) but just my mother and myself.</p>

<p>On her 2004 tax returns, she had an adjusted gross income of $127,000 becuase she borrowed a lot out of her TSA just to pay bills and fund my education. Because she will have a 12% reduction her first job and just lost her part-time job, she will only be making $81,000 for the 2005 - 2006 year (she received this report from her employer in the mail). We just received my financial aid (I attend a top-15 national university which costs $44,000) and they computed our financial aid as though she would still make $127,000. I received $10,000 in grants, an unsubsidized $5600 loan and $29,000 parent loan. </p>

<p>My mother is very upset because with a severe reduction in her pay, she can no longer afford to pay what the university have listed on my financial aid package (We are already paying TWO $29,000 parent loans for freshman and sophomore years). In addition, we qualify for a SUBSIDIZED (we NOW meet financial need), not unsubsidized loan. In addition, we cannot accept a $29,000 loan when she has had a severe cut in her pay. Right now, we are compiling supporting documents to fax the financial aid office why they should reconsider our financial aid package. Our EFC is not $35,500!</p>

<p>I am also an incoming junior who is majoring in interdisciplinary fields that other schools may not offer. I cannot transfer schools and just start all over again. If the school will not change my financial aid, I may have to drop out out of school.</p>

<p>What can I write to the Financial Aid Office that may influence them to reconsider our financial aid? I know that we must have compelling evidence and very extreme circumstances to qualify for a change.</p>

2

<p>I think it is more beneficial to take an education loan rather than borrow from retirement or whatever TSA is .
I am assuming that schools will consider what is already taken out in education loans, while they don't consider other loans.</p>

<p>My daughters finaid office was very helpful when my husbands income was reduced after 9/11. Submitting updated check stubs gave them enough information to increase grants. Your school should either give you subsidized loans or explain why you don't qualify. Give the school as much information as you can about expenses and accounts to illustrate what you have available.</p>

<p>You might want to reread the advice that was given when you first recieved their aid package.
For others who are considering schools who have a reputation for not being overly generous with aid- remember that situations may unfortunately change- and even though you may not need aid when applying & assume that it doesn't apply to you that they are not accomodating- if your income level is reduced they may offer you loans instead of grants.</p>

<p>I suggest- get your father to help you
Sell your grandmothers house
take a year off to earn money
Transfer to Ann Arbor
Lots of students unfortunately find out that their#1 school is not flexible with aid and need to transfer. In fact Steve Jobs CEO of Pixar and Apple just commented on that during his commencement address at Stanford. He was from a single parent home and had to drop out of college.
Try and look at all your options, don't feel pressured to take such huge loans, that will really limit your possiblities after graduation.</p>

3

<p>Having followed your situation for at least two years, I agree with emeraldkity4.
I also hope that those who are considering Northwestern and also are concerned about finances will take heed from your experience with that university. It has a deserved reputation for not being generous when it comes to aid. It also may offer an excellent package freshman year and then drastically reduce the grants later.</p>

4

<p>I am determined to finish my education at Northwestern. I only need a few classes and I'm finished with my degree there (Thankfully, I had sophomore standing my freshman year). I'm sorry, but I will choose every option before transferring to UofM-Ann Arbor (where my credits may not transfer, and I will have to start all over again with my education.)</p>

<p>Why should we sell the family house when my mother lost nearly 40% of her income for the rest of the year? Selling the house won't do squat financially since it's in a rural area where the insurance and mortgage payments are very low compared to more dense, metropolitan regions. Plus, the family will scream in horror if we sell the family house -- the place of our traditions.</p>

<p>U-M was not generous (in fact, they gave me ZERO) with financial aid for me when I was accepted there as a freshman. Just keep that in mind. It costs $20,000 in-state to attend U-M AA with room and board and tuition. It's just as costly as Northwestern.</p>

5

<p>You and your mother already have tremendous loans, at some point you have to assess if it's worth it. She may replace the work, but things are getting much tougher for many. I assume from Emerald's post that you are in state for UMich. I would also strongly consider that option as opposed to being over $100K in debt for Northwestern before you even hit grad school. Good luck!</p>

6

<p>whatever you decide to do - remember that you have choices
Even if Northwestern doesn't give you more aid
you have the choice to stay at Northwestern or transfer
To raise money by cutting expenses/raising money by working/selling property
U MIchigan didn't give you aid because the costs were well under your EFC. They didn't need to give you aid because your mother was making over 6 figures for a two person family and because it was an instate public school for you.</p>

<p>I think in terms of education value- UMichigan and Northwestern are comparable and considering that Ann Arbor is instate- makes more affordable than Northwestern.
For your mother to already have $60,000 in loans is way too much- are you going to assume these loans after you graduate? I see that you have mentioned you want to attend grad school- while many fields do help with teaching positions, research programs etc- I don't know if they would pay enough to help pay back substantial loans.
I feel bad for you but I can't say I didn't see it coming :(</p>

7

<p>Actually, I can't move in-state because then the auto insurance rates will kick in (I must live more than 100 miles...U-of-M is only 40 miles from home) and my mom will be paying $7000 in auto insurance versus the $2000 she is currently paying for me to live out-of-state because of my age. Believe me, she rather have me live out-of-state than take on extra burdens on redlined auto insurance.</p>

8

<p>and you need a car why?</p>

<p>
[quote]
How to Get Around...Ann Arbor That Is
Newdow Lectures the Masses on Church, State Separation
By Gabrielle Stein</p>

<p>BUNDLED UP TO their eyes, students hang their heads low to avoid the harsh winter conditions, as they make their way, trekking through the slushy leftovers of Ann Arbor’s continual snowfall, to class. Others find themselves banging on their frozen car doors, picking the ice from their wind shields and waiting for their cars to warm up before they are able to venture out on the slick roads, attempting to reach their destinations. We have all seen those big purple and blue buses driving by, herds of students out in the bitter cold, anxiously waiting to squeeze on and off of the crowded doorways. We have honked as they have blocked up the roads, slowing down some of us drivers, late on our way to class. Yet all the while, many of us have never considered their real purpose, their potential as an oasis, a place of refuge from our primary travel routines. But where does one get on one of these magical transporters? Where do they go and how much do they cost? These are some of the questions plaguing student’s minds as they opt not to take the chance of hopping on. So here it is everyone. Your official “How To Guide,” to navigating your way around Ann Arbor’s system of public transportation with 27 bus routes serving more than 1,500 bus stops.</p>

<p>The “Link” Services all of downtown Ann Arbor from Kerrytown, to State Street, Main Street and the University of Michigan Central Campus. This transit system stops every eight minutes at one of the twenty four, purple markers. At each stop, are lists of other stopping points, as well as suggestions of various locations to visit around the city. The route consists of a loop along Hill Street, East and South University passing and making stops at the Business School and East Quad, across South Forest crossing over South University past Touchdown’s Café, Middle Earth, Jimmy John’s, The United States Postal Service, The Brown Jug and Good Time Charlie’s Café. down North University past the University Health Services, C.C. Little Building, Hill Auditorium and The School of Dentistry, to State Street and Liberty past the Ann Arbor Hands-On Museum and the Ann Arbor YMCA, along Main Street and into Kerrytown past the Greyhound Bus Station, City Hall, Kerrytown Concert House, County Courthouse. As well, it is rather easy to connect to other AATA and U of M existing bus routes.</p>

<p>As well, the U of M Commuter route, crosses all four campus locations and connects with the AATA routes at the C. C. Little Building on Geddes Avenue, where is meets of with AATA bus number 2, 12U, 36 and of course, the Link. It also meets up at State Street and South University at the Michigan Union, connection with AATA route 5, 6, 36 and the Link, Ann Street and Zina Pitcher at Couzens Hall, with AATA routes 2, 4, 12 U, and 14. And lastly at Bonisteel Avenue on North Campus where is meets up with AATA route 22.</p>

<p>For those of you who are still confused, the Blake Transit Center (BTC), located in downtown Ann Arbor on Fourth Avenue between William and Liberty, and the Ypsilanti Transit Center (YTC), located on Pearl Street at Adams Street, are the source of most originations for most Ann Arbor Bus Routes, leaving every 15 minutes after and before each hour in order to coordinate with subsequent bus transfers for all riders.</p>

<p>As well, the AATA website allows you to “Plan a Ride,” giving instructions on how to ride the buses to and from point of departure and destination.</p>

<p>All Ann Arbor Transportation Authority buses are now equipped with a double loading bike rack on the front of the vehicles. This addition allows for “multi-model commuting” around the Ann Arbor and Ypsilanti areas.</p>

<p>If the bus system really isn’t your thing, the AATA has a Ride Matching program. Through this, your information, starting location, destination, and the hours of work/college are added to a database of over 500 participants in an attempt to find others with similar locations and commuting times. You will then receive by mail a name or a list of names of people who live within a specified radius from your home and work. Then it is up to you, give them a call, send them an email and set up a time to discuss the possibility of a carpool.</p>

<p>As for the price, a UM/AATA Pass is free and available for staff and faculty in place of a parking permit. For more information contact UM parking services at 764-8291. The Go! Pass, is also free, and available for individuals who work for participating, downtown Ann Arbor Employers. Contact the GetDowntown Coordinator at 214-0100. Otherwise, it is a dollar per ride for all students, no identification necessary, and 25 cents for the Link. Token packages are another option to avoid scrounging around for change at the last minute. Feel free to check out all of this information on the web at <a href="http://www.theride.com%5B/url%5D"&gt;www.theride.com&lt;/a>. Happy Commuting!

[/quote]
</p>

9

<p>You should definitely speak with the financial aid office regarding your change in cirumstances. Even after the paycuts your mom makes $81,000 so the school will not consider her to be poor and you may still have a substantial EFC. One of the biggest problems is while Northwestern has meet your demonstrated need, they have saddled you with a lot of debt (at the rate you are going you will have over $100,000 of undergrad debt. My personal opinion no school is worth that kind of debt)</p>

<p>While I don't think you mom should sell her home, she should definitely take a home equity loan, and consolidate the $60,000 of plus loans into them. At least that way the equity in her home will be reduced because she has a larger mortgage (putting you in a better FA situation next year), in addition she will be writing off the mortgage interest paid.</p>

<p>You are starting Junior year. It is very easy to find out if your credits are transferrable. You can begin by comparing courses for courses. Evn if you Mich gave you zero aid, the cost of attendance woudl probably be half the price of northwestern.</p>

<p>As far as driving, I am of the mind set that it is a luxury (but then I live in NYC with a vast public transportation system). The goal overall is to finish. Do youhave a plan 'B' in place in the event that Northwestern does not budge on the amount of aid you have been given? You may have to look into going part time and working to keep the cost manageble.</p>

10

<p>I suggested selling the home because it is not where they are living- on earlier threads I believe that she and her mother are living in the city in an apt and a grandmother who is now deceased left them the home.
I wouldn't suggest selling their main residence.</p>

11

<p>Oh....</p>

<p>Then I defintitely agree, if student and mom are not moving into the home (for it bing yor primary residence) the full value of the home is going to be used in determining aid, therefore Northwestern will not be very willing to give more $$. You're right, they should consider selling it or moving into it then taking out an equity loan to help cover some of the outstanding debt and have a source to pay toward junior year.</p>

12

<p>The car is not "mine" -- it's my mother's. It's her car whenever the car she drives breaks down (it does occassionally). I use it to get to work (I have a full-time internship on the opposite side of town from where I live and where my mother works). A car is a necessity in Detroit. You may not believe me, but that is the truth -- especially in a city that has the worst public transit system in the country. </p>

<p>What point is it to live in my grandmother's house? It's a 7-room house built back in the 1930s. It's not worth much other than the meeting place of my extended family during the holidays and special occassions. It's in a rural area that does not have jobs like a metropolitan region will provide. She still needs to work, and working in a rural area won't cut it unless she makes 4-hour round-trip commutes to Durham, NC, which I doubt she would do. We will not touch the house, and things will remain as they are. It's the better option for the sake of the family and tradition. My grandparents would turn in their grave if we thought about selling the house and land that they left for us. </p>

<p>You don't understand - Michigan does not offer my current major. They will make me choose a different major and take their courses extending my time in college. I am almost done with my degree at Northwestern.</p>

13

<p>Tenisghs, what is this major that's so worth being in this kind of debt for? Do you have to pay it back and have you thought through what it will take?</p>

14

<p><a href="http://www.usnews.com/usnews/edu/college/majors/brief/major_5-0201_brief.php%5B/url%5D"&gt;http://www.usnews.com/usnews/edu/college/majors/brief/major_5-0201_brief.php&lt;/a&gt;&lt;/p>

<p>These schools offer black studies
Most schools of any size including Ann Arbor will have sociology/economic and history depts
After reading your problems with the profs etc at Northwestern, I just can't see how it is worth taking out $35,000 in loans every year to you.</p>

15

<p>I honestly don't understand the problem....81k is still a lot of money for 2 people. I also think that 29k is a huge amount to take out in loans per year. If your family is so bent on keeping your grandparents house in the country, let them pay the upkeep on it. If you are really that hard up for money, transfer to your state school and commute. That will also save a lot on dorm costs. I just graduated from college this past may. I drove 50 miles each way to school everyday because after freshman year, I couldn't afford to dorm. You are complaining about your mom only making 81k for 2 people. My father was out of work for two years...and there are 5 of us. Believe me, it was horrible. There was no money, utilities got turned off. For a while he worked at home depot out of desperation. But by some luck of god I was able to stay in school with loans and fin aid. I went to an in state public b/c I knew money wasn't going to fall out of the sky to pay for my school. Granted it wasn't my dream school, but it was fine. I still got an excellent education. Even now I can't understand people that go to expensive schools and really honestly think fin aid will come through. I think students need a back up plan in case that dosen't happen. I made the best of it. I went to class, commuted, and worked...but at least I finished. I'm the first in my family to do it. College is a huge financial struggle but if you want that degree bad enough, you'll do what you have to do whether that means transferring to a cheaper school, working and going part time, or whatever else.</p>

16

<p>You said it NeedsAJob05. I really felt sorry until I saw the numbers.</p>

<p>And you know what tenisghs? Changing schools and majors may not be the worst idea ever. You could get a better financial aid package. And people who major in one thing aren't tied down to only jobs in that field. English majors become tech support workers all the time. Why not research the job(s) you want and find a major that satisfies the requirements? review.com is a good place to look.</p>

17

<p>I'm in agreement with NeedsAJob and indiedice.</p>

<p>81,000 dollars. For two people. You live in Detroit, in an apartment.</p>

<p>I know families of four who live in NYC on $30,000 a year.</p>

<p>And they make it.</p>

<p>If you're so concerned, you have some choices to make.</p>

<p>Tough choices too.</p>

<p>Switch majors and find a new college, with a better FA package.</p>

<p>Stay at Northwestern and FIND A WAY TO PAY FOR COLLEGE. Without the FA.</p>

<p>Get a job. (Do not tell me you don't have time; I work two jobs and take six classes (some on grad levels), plus I have ECs--it can be done).</p>

<p>Apply for scholarships! Bloody Christ on a stick, there are MILLIONS of dollars out there in unused scholarship money, and it just rolls over EVERY YEAR. I don't care about your race, your financial aid, your grades, your ECs, your orientation, or your home life.</p>

<p>Somewhere, there will be a scholarship for you. I promise.</p>

<p>Use it.</p>

18

<p>tenisgh,</p>

<p>I have read a lot of your post over time, and for the most part I understand where you're coming from and have to compliment you on being a person of your convictions. However, I am really at cross purposes with you on this situtation, not that it may matter much to you. But since you are asking for a parent's perspective, I am giving you one . </p>

<p>Sounds like me like you are getting ready to sing solo (you keep singing me, me, me). This is a partnership. Your mother does not owe it to you to go over $100,000 in to debt over to prove her love to you or show her self supportive of yor educational endeavors. </p>

<p>You must remember your mother's age and the life of these loans. She will be repaying this money when her earning power has peaked, facing instability in the job market (you already stated that she has had to take a 12% paycut, which could be a layoff or reduced hours in her future due to the uncertainty of the economy). Some of theis debt is going to possibly be repaid at a time when she is on a fixed income. She has already taken money out her her TSA(I can assume that this her retirement fund, which she she can't easily replace and if she does, she has lost the interest that the money would accumulate had she left it in). This is going to leave her witha greatly reduced *****on at a time where we have just been informed that our social security will be cut anywhere form 20-40% to help supplement low income people. I hope that you are a really great son/daughter when you have the money to make this shortfall up to her, because you are limiting her ability to be self sufficient as a senior citizen. </p>

<p>I am of the mindset that if one is going to assume 6 figure debt, it needs to have a 30-yer fixed attached to it and you should be turning the key and living in it each night. Have you spoke to her about how she feels about continuing to take on this massive debt especially when she has lost over 1/3 of her income. You stated she took the second job just to pay the bills so she is already stretching the dollar as far as it could go.</p>

<p>Your mom has already made a lot of sacrifies in support of your education (paying out this money when you state that she has less than reliable transportation). If she can't get to work, she can't continue to pay the bills. If you can't get to work you can't make money. While she didnot have to spend $60,000 on a top of the line car, she could definitely get some reliable transportation. What part of this scenario makes sense.</p>

<p>You are preaching to the choir her, as I am also a single parent payig for a child's education. I don't make close to your mom's reduced salary. We have very open and honest discussions about money and how it pertains to her education. Yes, there have been moments, where we have robbed Peter to pay Paul, and both of us have made sacrifies (she knows that I would make them in a nanosecond without a second thought), and given up things for her to attend her "dream school". I also know that my child would not be able to sleep at night with me taking on this kind of debt for her.</p>

<p>Instead of taking a woe is me standpoint on possibly getting a 29,000 loan reduced to an amount that is still going to be a bit burdensome to her, you need to talk with her and come to a happy medium on this situation that does not involve drastically increasing the amount of debt that she has already taken on.</p>

19

<p>*"While she didnot have to spend $60,000 on a top of the line car, she could definitely get some reliable transportation. What part of this scenario makes sense" *</p>

<p>Sybbie, what is this? I don't even know what you're talking about. What is this $60,000 car that you are speaking of? The last time I check, none of our two cars cost that much at all. Since when does a Mitsubishi car cost $60,000? (We got it used for $12,000 and it's has already been paid off.)</p>

<p>Sybbie, again, that's why I will contest the financial aid package. My mother has lost nearly 40% of her income, and we qualify for "extreme circumstances" that are out of our control. Even if she was making the same money, I would also contest the school again because of her age and work history. My friends who do not receive financial aid don't have the same problem becuase they have two (or one) working parents who have fantastic incomes (exceed $130,000). I don't have that safety support.</p>

20

<p>NeedsAJob and Indeices, is "$81K" so much money to you, how come most of the money is going towards bills, insurance, mortgage, etc.? Both of us never go on "dream cruises" or anything of the sort because we cannot afford it. If my mother is taking money out of her TSA, then something is up that she does not have disposable income to just "afford" my education. The last time I check, in some major metropolitan areas, the standard of living will make $81K look like average income. It doesn't help that she has canceled credit cards (when the companies had increased their interest rates) so that she can just pay off the debts on those cards. Before you throw around that "oh they are living a rich life" you need to analyze the cost of living and type of expenses that the individual must pay in order to live a life they must maintain. Plenty of middle-class people are leaving this city that I reside in because a) the taxes are very high b) insurance premiums redline the city and c) it's cheaper to live elsewhere. And the fact that my mother has lost nearly 40% of her income is just hurtful -- especially when you will now lose $1800 a month.</p>