<p>My family has the problem of having too much money to get a ton of financial aid and too little to pay for college by ourselves. I live in a family of four. I am going to graduate from high school and a community college this year and my sister is attending a four year university. The only one of us with a real job in my father. He used to have a high paying job, but he got laid off a few years ago and is now working at a lower paying job. He makes around $33,000 a year from income, but he has been taking money out of his retirement account to pay our living expenses. Even so, we have debt on our house. Because of the money he is taking from his retirement account, the latest tax return lists our total income as $102,000. This puts us out of the running for a lot of financial aid dollars, but we can't continue to survive taking money from his retirement account like this, nor can we substantially decrease our spending quickly. I do have high grades and test scores, so I may be eligible for merit awards, but I haven't won any yet. I'm also planning to apply to some competitive colleges with good financial aid programs, such as Yale. What suggestions do you have for getting the best financial aid deal? Unfortunately the numbers on my FAFSA are somewhat misleading, and I don't know how to get more aid.</p>
<p>Are you going to be a freshman? The “and community college” comment makes that unclear.</p>
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<p>Huh? Please explain.</p>
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<p>The only merit awards that will matter are those offered by the colleges themselves, that will cover you for all four years of college.</p>
<p>It is confusing what your situation is. Are you going to be a senior in high school this coming academic year? Where does community college come into the picture? It’s an issue because financial aid and scholarships are not nearly as available for transfer students. Your best chance for money is straight out of high school.</p>
<p>Yes, the withdrawals from your father’s IRA this year will be counted as income on FAFSA and other financial aid applications. THat is the way the rules work, and unless the money went to some true catastrophe or medical situation, they are income. As they are so taxed by the IRS (often with a penalty tax as well) as well. </p>
<p>However, most students truly do not get all that much money even if they are needy. Just so that you know that very few colleges meet 100% of need or even close to it, so just having the need doesn’t mean it is going to be met. That is a fallacy. Most students do not get even close to what the calculators give as need met by colleges.</p>
<p>The poorest families with EFCs under ~$5K do get the PELL grant up to about $5k(that is for a zero EFC), but after that, all that is guaranteed by the federal government are some subsidies in STAFFORD DIrect loans. A student can borrow up to $5500 the first year on his own through that program.</p>
<p>If you live in a state that does have some funds towards college for which you do not qualify due to the IRA withdrawals, that can be an issue since that and the full PELL could come up to enough to pay for instate tuitions in some situations. </p>
<p>College is only one part of your family’s financial picture, so you need to sit down with your parents and find out what their situation is. Will they be withdrawing each year from the IRA to subsidize their living expenses so that they can live up to the $100K level, or are they going to be downsizing to what the true family income is without such withdrawals? If they are going to live like $100Kers, they are going to be expected to pay for college like people of that income level. It’s considered part of being in that income bracket, regardless of where they are drawing the funds in this case. If this is indeed a temporary thing that is over after this year, you might want to take a year off from college and apply when the family income more clearly shows your financial situation for the future.</p>
<p>What sort of colleges you are eyeing make all the difference in this situation. There are only a few schools that guarantee to meet full and only a few more that tend to come close. Most schools don’t care what your need is. THey gap you. They don’t have the money to fund everyone with need. </p>
<p>If you look at school where you are at the top of the applicant range, and if those schools have merit money, that is a good place to look for scholarship money. THat is where most of the money comes from; the schools themeselves. Look at Momfromtexas 's Full Ride Scholarship threads. </p>
<p>What most people do is commute to a local state school and go to college part time. Rooming at a college is a luxury and is something that is expected from the students’ parents most of the time. Just like boarding school is.</p>
<p>I’m in Washington state’s Running Start program, which means that I can attend my local community college and earn my Associate of Arts degree during my junior and senior years of high school. Since I’m still in high school, though, I will be applying as a freshman, not a transfer, but courses should transfer over.
I am planning to apply to a variety of colleges, but because we live in a small rural town, there is only one that I would be able to live at home while attending. I am planning to apply to Portland State, University of Washington, and Western Washington (all public) as well as maybe one or two private (such as Yale). Unfortunately, it would be very hard to substantially cut our expenditures (quickly, at least). Most likely we would have to sell our house or make other big changes. My father says he can afford to pay for me to go to a public, in-state school were I could commute to, but that would require him to take even more out of his retirement account, and of course the money will eventually run out.</p>
<p>I haven’t read all the way through it, but [this</a> current thread](<a href=“http://talk.collegeconfidential.com/parents-forum/1377041-saving-money-ap-credit-dual-credit.html]this”>http://talk.collegeconfidential.com/parents-forum/1377041-saving-money-ap-credit-dual-credit.html) in the Parents’ Forum regarding AP and dual credit might be helpful for you.</p>
<p>Your community college credit will most likely not transfer to private universities. If you have the stats to have any chance at Yale you should be able to get good merit aid from some schools, but usually merit aid has its limits and won’t meet all financial need.</p>
<p>If you have the stats to get into Yale, there are many schools that would award you merit scholarships.</p>
<p>What are your stats? (SAT/ACT/GPA/PSAT)</p>
<p>Yes, the pension funds will eventually run out and if used to pay your college will run out even faster. It’s always a huge decision to make as to when to bite the bullet and relegate oneself to a “permanent” life style change. Most of the time, the sooner one does it, the better off one will be, but human nature likes to put it off as long as possible in hope that something will come up and that the move would be unnecessary.It’s great when that happens, but when it does not, one is worse off than if one had made the move much sooner.</p>
<p>You will have a safety school, which is your school where you can commute and get your degree. ALso look for local private schools that might want to pay for your stats. As BobWallace says, if you have the stats to get into Yale, or be a reasonable candidate for admissions, there will be many schools that would award you merit scholarships, though they will not have the name recognition that Yale has. Also look for what your state schools have for high stat applicants. Talk to your guidance counselor and pick her brains for places where kids from your school with your stats have gotten good merit money. </p>
<p>By all means, also apply to Yale. THe top schools like Yale give generous awards even to families at your income level, and there is a chance something can be worked out if accepted. As long as your base is covered, you can shoot for the stars and hope something pans out. THat you are aware up front that you have an issue regarding financial aid is good. You won’t get blindsided.</p>
<p>It’s not a good idea for your dad to take money out of his retirement acct for college.</p>
<p>Yes, since he’s been withdrawing money you will have a high EFC.</p>
<p>Since you’re doing Running Start while in high school (2 of my nieces did the same), you still apply as a FRESHMAN for scholarship purposes even though once you’re enrolled you’ll have Junior status.</p>
<p>If you have the stats for Yale then you have the stats for LARGE merit at a number of schools. </p>
<p>What is your likely major? </p>
<p>FORGET about “winning scholarships” from applying to private scholarships. Those are usually ONLY for freshman year…one time awards.</p>
<p>YOU need to apply to the SCHOOLS that give large merit awards for your stats for ALL FOUR years. </p>
<p>What is your likely major?</p>
<p>What are your stats?</p>
<p>You may also want to look at University of Portland, they have a reputation for offering good merit aid.</p>
<p>I’m hoping to double major in English and theater ( as long as the school I go to allows that. If not, English major, theater minor). My stats are: SAT: 2250 total, 800 CR, 800 W, and 650 M. GPA: 4.0. PSAT: 215 total, 80 CR, 70 W, 65 M. </p>
<p>I know someplace like Yale would be a stretch, but I figure I might as well apply just in case. Even my safety school could be hard financially, since my sister is also attending college (without any scholarships, grants, or loans) and we both plan to go on to grad school.</p>
<p>I’ve heard there are some little things, such as saving more money in the parent’s account than the student’s account, that can help. Does anyone know anything about those sorts of things?</p>
<p>4.0 (assuming that’s your unweighted GPA) and 2250 would put you in the running for HYP (Harvard/Yale/Princeton) or any other top school, if we are looking at only those two stats.</p>
<p>Heck, the average SAT of all HYP admitted freshmen is right around that score, so in that sense you are a definite candidate for Yale, or any other school… except maybe MIT or Cal Tech, which seem to require much better Math stats. </p>
<p>The top schools tend to give excellent financial aid. I’ve run tests for 1 and 2 kids (at once, in college) at an arbitrary income of $100,000, which is strikingly close to your family’s situation. I put the bank account value at $10K, house value at $300K, house purchase price $150K, amount still owed $100K… $2500 in the student’s bank account and $2000 earned by the student in the past year. No other additions to income, no trust funds for the kids, etc. Again, i was doing arbitrary searches.</p>
<p>With one (total) kid in school, your family might expect to pay something like $12000-$17000 per year at HYP and their ilk. </p>
<p>With two kids in school, your family might expect to pay something like $8000-$12000 per year at HYP and their ilk.</p>
<p>That includes no loans – no money to pay back. Some will include minimal loans,like $1000-$2000 per year.</p>
<p>Try the Net Price Calculator at the schools in which you’re interested to get a more accurate idea of what you and your family’s expected annual contribution might be.</p>
<p>Maybe make a list of those that might offer the lowest annual expected contribution, and then add to that list the best schools at which you’ll have a good chance of securing merit aid.</p>
<p>Add a few safeties, maybe, and you’ve got a decent list of schools at which to apply.</p>
<p>(and, of course, as nearly everyone says: it’s a good idea to pick schools you actually like; schools that are, or would likely be, a good fit for you…)</p>
<p>For need-based financial aid, as far as the savings go you want to save either in a 529 account in the child’s name or save in the parents’ name. The one thing you don’t want is regular savings (non-529) in the child’s name. The reason is that your family contribution will include about 6% of 529/parent savings per year, but 20% of child’s regular savings per year.</p>
<p>Your stats are good enough for big merit awards from many colleges. You would qualify for almost all the merit scholarships on this list:</p>
<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1348012-automatic-full-tuition-full-ride-scholarships.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1348012-automatic-full-tuition-full-ride-scholarships.html</a></p>
<p>Also you would have a good shot at many excellent competitive scholarships. See this list:</p>
<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/211927-institutional-merit-based-scholarships-full-tuition.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/211927-institutional-merit-based-scholarships-full-tuition.html</a></p>
<p>I’d take a gap year, allow your family to regain control of their finances so you don’t show six figure income when your dad only makes $33k.
Having two years of college credits at graduation will give you a great start toward earning a BA but those credits will go the farthest in a Washington state school.</p>
<p>Neither English or theatre are high paying fields and while graduate school may be desirable, working in the interim will likely be expected so I would concentrate on undergrad right now and not grad school.</p>
<p>It’s true that savings in the parents name is not weighted as heavily for college costs as money in the students name, but if you are a senior now, and your family is taking $69,000 OUT of savings just for CURRENT bills, where are they going to find money to save?</p>
<p>You are in WA, try Whitworth where you can obtain $19k annually in merit:</p>
<p>[Whitworth</a> University Financial Aid Office - Academic Scholarships for Incoming Undergraduate Students](<a href=“http://www.whitworth.edu/administration/financialaid/scholarshipopportunities/academicscholarships.htm]Whitworth”>Page Not Found | Whitworth University)</p>
<p>They will honor your freshman admission status even if all your units transfer from Running Start.</p>
<p>Gonzaga:</p>
<p>[Scholarship</a> Opportunities - Gonzaga University](<a href=“http://www.gonzaga.edu/admissions/undergraduate-Admissions/Scholarships/Scholarship-Opportunities.asp]Scholarship”>Scholarship Opportunities | Gonzaga University)</p>
<p>What about SPU or PLU? Though living expenses would be lower in Spokane.</p>
<p>With your stats, Yale may admit you, but there is no way to know whether they will ignore or count that retirement income toward your income. You can get merit aid at local privates to bring the costs down to the equivalent of public schools and if your RS units cover the breadth requirements, you may be able to finish in two years.</p>
<p>Even my safety school could be hard financially, since my sister is also attending college (without any scholarships, grants, or loans) and we both plan to go on to grad school.</p>
<p>that could be a problem. If your sister isn’t getting any aid, then even if you get good aid/merit, paying even some money for you may be a problem. Paying full freight for sis, and paying $10k-15k or more for you is likely too much. This happens in families where one child isn’t getting much/any aid…EFC doesn’t really split. </p>
<p>Another issue you have is that the retirement withdrawals are hit with a harder calculation since work-related taxes aren’t being withheld (FICA, etc). </p>
<p>Frankly, I think the sister should take a gap year instead of having parents using retirement money for college. That’s just so risky. </p>
<p>With the OP’s stats, she needs to apply to at least 2-3 schools that will give HUGE assured merit.</p>
<p>With your scores and grades you may be eligible for full scholarships to State Universities. For example, The University of Alabama has a merit based scholarship for out-of-state students that you would qualify for:
PRESIDENTIAL SCHOLAR
An out-of-state first-time freshman student who meets the December 1st scholarship priority deadline, has a 32-36 ACT or 1400-1600 SAT score [critical reading and math scores only] and at least a 3.5 cumulative GPA will be selected as a Presidential Scholar and will receive the value of out-of-state tuition for four years.</p>
<p>You could probably qualify for other scholarships or grants to cover room and board.
Good luck!</p>
<p>Are your dad’s “retirement accounts” actual retirement accounts (i.e. 401-K, IRA etc.), or are they just savings accounts that are not tax-preferential or acknowledged by the government as specifically for retirement? </p>
<p>If they are in reality just savings or investments where your dad has parked his retirement money, then they will be assessed as available by colleges to pay your tuition.</p>
<p>FAFSA doesn’t take actual retirement accounts into consideration when determining EFC.</p>
<p>I remember a while ago there was a thread on here from a widow who found, to her horror, that the money she had intended for her retirement was considered fair game for her D’s tuition because it wasn’t actually in a government-designated retirement account.</p>
<p>If your Dad’s retirement savings are not in “retirement” accounts, he might want to consider moving them into some for their protection.</p>
<p>If your Dad is taking money out of actual retirement accounts to make ends meet, then it will be considered as income and it will eventually run out, because he is treating it as income.</p>
<p>Emeraldkity’s suggestion of a gap year sounds like a good idea.</p>
<p>His retirement account isn’t an IRA…my mother said it is a private welfare account.
My family has talked about maybe using more money from my account and my sister’s rather than taking as much out of his retirement account. I should also add that were struggling to find ways to cut costs since we have quite a few medical expenses right now (my father recently had a heart attack, both my parents are seeing a chiropractor, and my father has been unable to work for the past few days because of a pulled muscle in his back).
Thank you everyone for all your suggestions. I’m not too financially saavy, so I could use all the help I can get.</p>