Financial Aid For A Returning Adult Student - Will Income Before Enrolling Affect Aid In Year Two?

Paying for College
1

A friend of mine is thinking about quitting his job, and going back to finish his degree. He has around 100 credits from back in the 1980s.

He lives in New Jersey, and is looking at NJ publics. I think he makes around 94K. He has no assets outside of his retirement accounts, besides his savings account, and expects to have 30K in the savings account by the time he starts school.

He’s not ready to do it this year, but suppose he applied for Fall of 2016. Let’s say he gets into a school for Fall of 2016 and keeps working through June of 2016. The he starts taking classes in July of 2016. I’m guessing he can do that, and just transfer the summer classes into his degree, after he actually gets enrolled in the Fall.

Anyway, based on 94K of income in 2015, I’m estimating that his EFC will be around 36K for year one. The NJ public he’s looking at is around 30K total COA. So for year one, he’ll get nothing. But he expects to have around 30K saved by the time he starts, so he’ll be fine.

When year two rolls around(Fall of 2017), he’ll have a previous year income of around 47K, from working January 2016 through June 2016. I’m assuming he’ll work through June of 2016. Based on that number, I came up with an EFC of around 19K. I estimated his taxes, and took 47% of his take home. So does this that mean he might be eligible for 11K in financial aid in year two? If so, would that most likely be in the form of loans or grants, at a NJ state school?

I’m not too worried about the exact numbers. What I’m wondering is whether I’m looking at it correctly. Once he gets past year one of school, will the colleges stop looking at the income he earned in 2015 and before that? If he went for a third year(Fall 2018), would his EFC for that year be based on the little bit of money he might make while attending school in calendar year 2017?

Thanks.

2

Before he quits his job he needs to think long and hard about at a couple of things:

He needs to get copies of his old transcripts and meet with the college in question to see how many of these credits will actually carry over so that he has a idea as to how many credits he needs.

What is his intended major? Depending on the major, he may find himself almost starting from scratch. While he may keep his gen ed credits or english, math, history, art, etc, he may find himself being in school for more than 2 years.

If he received financial aid while he attended school the first time, he needs to check his lifetime eligibility limits (he may find out that he may not have as much financial aid coming as he thinks)

https://studentaid.ed.gov/sa/types/grants-scholarships/pell/calculate-eligibility

Someone who has a 94k job should not be quitting his job to attend school full time unless he is being fully funded and it is not costing him anything. Even then he is losing -150k in income that he is not receiving while in school full time. He is also not guaranteed to make this money again once he gets a degree especially if the degree is in a different field. ( I speak as a person who left corporate life to do something different but did not quit my day job to do it. I did get a big portion of my graduate degree paid by my former employer. Even though I knew I was going to take a pay cut I spent time and got my financial house in order to do so).

I would definitely recommend that he looks at his employee benefits to see if has tuition reimbursement or look at the possibility of going to school part time or weekends (he must also remember the cost of biing unemployed for 1/2 years and trying to come back into the workplace (so he is “spending” 150k to get some free money.)

As an independent student, with a 19k EFC going to a NJ public, he will most likely not be eligible for any financial aid other than loans. If he is looking for some “free money”, it is probably not coming (another reason not to quit his job)

He has to remember that if he quits his job he probably is not going to be eligible for dislocated status on the FAFSA (so this means he will most likely meet the requirements for simplified needs test and as an independent student)

He may be better served keeping his job and going to school full time/part time (plenty of people do it all of the time

3

Foolish to quit a $94k job to finish his degree. Instead, he should just pay as he goes and finish his degree with a reputable online program…while STILL working.

4

Your Year 2 EFC projection is wrong because FAFSA EFC for both 2016-2017 and 2017-2018 is based on 2015 income.

Why does he want a degree? Just for personal satisfaction? Is he in his 50s now?

5

Also. Lots of opportunities to take courses towards a degree online these days.

I would strongly suggest he look at all options before he leaves his current job. Perhaps college part time evenings and weekends would get him that degree.

6

Your friend is thinking about quitting a $94k/year job to get ~$11k in financial aid? Why would he do that? If he went to school in the 80’s he’s not 20, so he doesn’t need to live on campus. That will bring his COA down to $12-15k/year. If he’s concerned about money, quitting his job doesn’t seem like a prudent choice.

You don’t have to quit your job to finish college. I completed my degree at night while working a full-time job. One of my sisters, whose salary is in the same ballpark as your friend’s, is finishing hers online (thru a SUNY university) while working full-time in Manhattan. Has your friend explored other options?

7

Also…keep this in mind. Your friend might not get enough aid to fully pay for college even if his income is $0. The vast majority of colleges do not meet full financial need for all students.

With a $0 EFC, as an independent student, he would get $9500 as a Direct Loan if he is a freshman. And a $5800 Pell grant. That’s it. Clearly not enough to pay tuition, and fees…AND living expenses (rent, utilities, food, insurances, clothing, car expense, etc).

8

Also students starting in Fall of 2016 are applying now or have already applied.

9

Thanks for the replies, everyone. I didn’t put all the gory details in the OP, because it was long as it was, and I was just trying to figure out the financial piece.

Here’s the rest of the story:

He’s not planning to enroll in order to get free money. He’s actually thinking about waiting until he has enough money for 2 full years of school and living expenses before he quits his job. He’s single, so his family income will be 0 once he quits. For this reason, his COA will not be just tuition. He’ll have to pay rent out of his own pocket while he’s in school.

He has anxiety, and he’s completely overwhelmed by his job. He’s had a couple of panic attacks that prevented him from going to work for a couple of days. So going to school while he’s working is not an option, unfortunately. Obviously, he has to deal with the anxiety first, but he feels like the job is what’s pushing him over the edge. He feels that he would be much happier and less anxious in a lower stress job.

I realize that not having a job could cause anxiety, and that school work could cause anxiety, but not having a degree in your fifties, and feeling trapped in a job that you hate isn’t exactly good for your state of mind, either. I’m just trying to explore this option for him. It’s not a given that he’ll go this route. I’m just trying to see what it would cost him if he chooses to go this way.

School is actually his Plan B.

His Plan A is to stay in this job he hates until he has enough money to buy a very cheap house for cash, in a very rural area that has low real estate taxes. He’s in his early fifties, has no debt (not even a car loan), no kids, and can live on around 2K per month in New Jersey, and much less if he moves somewhere cheaper. He’s just looking to coast until he’s 62, and can take his pension and possibly Social Security.

Plan A would include a low paying, low skilled job that would just cover his expenses. He has enough money in his 401K to just let it keep growing. Of course, you can never have enough retirement money, but he feels like he has enough saved, and will be OK if he can get to 62 without touching his retirement money. He’s willing to take a job at a Home Depot or any other job that will pay $10 - $15 per hour. He could probably live on $1500 per month or less if his real estate taxes are low enough.

Sounds depressing, right? I’d need Zoloft if I were living Plan A! But it’s his life. I’ve been encouraging him to consider school, but in the end it’s his life and he has to do what makes him comfortable.

Plan B would be to go to some type of school and get into computer desktop support. He thinks it would be low stress for him. His course work from years ago was in Chemistry. His first thought was to go to a tech school like Devry or ITT, and get trained in Windows and Cisco support, but I’ve talked to some people I work with about it, and they’ve advised against it. They recommended a Computer Information Systems or Information Technology degree at a 4 year school.

Anyway, that’s how we got from Plan A to Plan B :slight_smile:

Back to Financial Aid.

@Madison85, is that really true that his 2015 earnings would count toward school years that far out? When does it end? If he went for 4 years, would they still be looking at his 2015 income for the 2019 – 2020 school year?

@sybbie719, thanks for the links. I don’t see anything in that EFC Formula doc that mentions what @Madison85 said about income in years before enrolling being looked at for school years 2, 3, and 4. Do you know if that’s addressed anywhere in there?

Thanks @mom2collegekids, @thumper1, and @austinmshauri. I think I answered your questions above. I appreciate the feedback.

10

He needs help for the anxiety. Going to college isn’t exactly a cakewalk these days. And the anxiety isn’t going to just disappear. Please help your friend find a good professional, who he will trust, to help with the anxiety issues.

Once those are resolved, he will be in a much better place to make ANY decisions about the future.

11

The FAFSA for school year 2017-2018 will be using in i.e. Sand assets for financial year 2015. For school year 2017-2018 the FAFSA filing date will be moving up from Jan 1, 2017 to October 1, 2016. They will be using what they call prior, prior income which is income from 2015

12

Thumper is right. While he has insurance thru his job (what about when he’s unemployed???), he should get full treatment for his anxiety. That may require meds (likely), and maybe therapy.

He needs to get his anxiety in order anyway…for school…for exams…for deadlines…for presentations…for future job interviews…for future jobs.

13

My dd works in a CS field. If anything, it is very stressful and contract-driven, with timelines and date specific deliveries which would probably increase his anxiety.

Plus, his age may be detrimental to his job search since his competition will be, at least, 20 years+ his junior. He sounds like he wants to retire but can’t quite afford to do that in his area. Nothing could be worse than looking for a job just to cruise through his last working years. Most decent jobs will be competitive.

I agree that he needs to stay put, but deal with the anxiety.

14

He already has about 100 credits. He really only has about 1 more year of college to go. That could easily be done, a little at a time, over the next 3 years. He wouldn’t even have to wait until he had $30k set aside to quit.

The reason he should try part-time online FIRST, is because what if he finds that he can’t hack school? Then what? He’ll have given up a great job for nothing.

There are many wonderful meds out there for treating anxiety. Plus, therapists can discuss some appropriate self-soothing self-calming skills and techniques. Some even use hypnosis, but only use a very reputable therapist for that.

15

He will need at least 2 years to fulfill the residency requirement to get a degree if he is not going back to his original school. In addition, we are talking about 30 year old credits (while things have not changed in english, math, history, etc., we don’t know what credits he still needs and what he will have to take to fulfill the current prerequisite requirements.

Does he dislike the job, dislike the company or both? Can he consider training opportunities in the company to so something different?

16

@sybbie719, wow, that’s crazy. Sounds like Financial Aid isn’t going to happen. He wasn’t counting on it anyway. That was something I was looking into as a possible bonus for him to make it cheaper.

@thumper1, @mom2collegekids, and @“aunt bea”, I’ve been trying to convince him to go to a therapist and consider anti-anxiety medicine for over 3 years. Unfortunately, he’s anti-therapy and anti-drugs. He’s afraid to take the drugs, and has never been to a therapist in his life. There are some people you just can’t convince, no matter how hard you try.

I have a relative like this. He’s been barely functional for over 40 years, and has still never been to a therapist. If there’s even a little bit of paranoia in the mix, it becomes very hard to get someone into treatment.

Short of knocking him out and dragging him there, I doubt my friend will ever see a therapist. I continue to try, but I’ve accepted the fact that he’s going to live his life the way he wants to. I just try to help him in whatever way I can, given all the constraints.

@“aunt bea”, I know certain IT jobs are stressful. He wants no part of those jobs. He wants low level desktop support. There shouldn’t be too much in the way of deadlines there.

I agree about his age. He could have trouble getting a job. He’ll be mid fifties at the end of school. It’s a tough one to figure out .

In a normal situation, doing the degree at night would make a lot of sense. He just doesn’t think he can handle work and school at the same time.

Honestly, I’m starting to think his plan A is the best idea, given all the constraints. He’s a no frills guy, who doesn’t mind living out in the middle of nowhere. He actually prefers it. If he owns a house outright in an area like that, he’ll have very low expenses. A $15/hour job might be plenty of money for him. I know people think quitting a 94K job is crazy, but it’s not a great job if you dread going there every day. Also, a 94K job in New Jersey is nothing like what it would be in some other parts of the country. It’s a very expensive area.

Thanks for all the feedback everyone. I’ll post if there are any developments. I’ll be talking to him tonight.

17

Good luck!
FWIW: There are lots of young people without college degrees who are low level desktop support.

18

^
That depends. Many state schools don’t require that many “in resident” hours. Many only require 30 semester credits.

19

Any chance his current company will allow him to reduce to part time?

20

^^ or pay for him to finish his degree???

seriously though…he needs to be treated by a psychiatrist who specializes in anxiety, preferably one who has therpists on his/her staff. It can become like a one-stop shop. The MD prescribes the medication, and one his staff therapists provides treatment and maybe “fine tunes” the “working diagnosis.”