Help!...anyone! I've got 5 kids!

Paying for College
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<p>I’ve brought this up before. I have a friend who decided to invest in real estate and to support his family that way. He bought and fixed up a number of apartment buildings. By the time his son was college aged, the rents from the properties were what the family pretty much lived on, with the real estate themselves the geese laying those “golden eggs”, and to be sold at old age when my friend figured he would not want the issues of managing the properties.</p>

<p>His son was accepted to Harvard, at the time that Harvard was saying that those with income below a threshhold got full aid, or something like that. Though they were below that threshhold Harvard did not look at it that way, They evaluated his assets and set up and told him he had to borrow against the properties or sell them. And Harvard tends to be one of the most generous schools about these things.</p>

<p>Now, there could be schools that would not see things quite that way, but I don’t know any, and finding them is like looking for that proverbial needle in the haystack. Schools do thngs every which way in evaluating fin aid and they aren’t big about giving details. For instance, some schools will include the value of your primary home as an asset, some will not, some will include but cap the value at 1.2x, 2.4x or some other mulitiple of income. FAFSA does not use the primary home value at all. </p>

<p>So the old YMMV holds greatly here. My suggestion is to maybe ask a school like Carnegie Mellon to do an early read on your situation and give you an estimated finanical aid package. I pull their name out of the hat, because I know they will do this if you ask them to do so in anticipation of applying ED, as they do guarantee to meet full need for ED students. This will give you an idea of how one school will view your financial picture and what kind of aid you can expect. </p>

<p>Depending on the value of your primary home, and how much will be added back to your income, it doesn’t look good for fin aid. With two in college, going to top priced school, maybe a little bit of need in the picture, which would likely be met with subsidized loans or work study. </p>

<p>You need to come up with some numbers as to what you can afford for your children’s college, especially the older ones as that is coming up soon. What can you pay out of savings, current income and can you borrow safely? What can your children pay–do they work, have savings, there is the Stafford Direct loan of about $5500 that first year? What would state schools cost? What local options are there? What are some schools that have given some good merit awards to grads at your kids’ high school? What schools out there would pay merit for yout DD’s stats? Any good OOS options? </p>

<p>We set a limit of $35K for our kids, other than the first one, and it has worked out, not without some strain, but we are doing it. That meant, commuter schools, in state public, some privates willing to give out some merit sweetneers and some OOS schools. Our in state options were very affordable to us and one son so chose. Another got just enough from a private LAC to make it a go. He worked every summer and also worked part time at school, and paid about 10-15% of the cost, plus it went down quite a bit when he moved off campus, something they all did. Another found an OOS public that he really liked that is just affordable with his summer work contributions. My kids all worked summers while in highschool and college, so they had some savings as a cushion too. They used the Stafford loans as back, but none of them had any outstanding at graduation. Some sweet surprises were some local privates that offered some generous merit. Some Catholic schools also offered merit money. </p>

<p>Good luck in looking for some varied choices.</p>

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<p>Wow…Mom of three boys…very helpful…thankyou…</p>

<p>I kind of did “reverse engineer” narrowing the choices to state schools in NY state…I figured investing $20,000 /year would do it but my income is not enough to sustain…Will there be loans available for them if needed or will my assets hurt them in getting loans as well</p>

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<p>Your kid’s will each be able to,take out the Direct Loan in their name only in the following amounts:</p>

<p>Freshman $5500
sophomore $6500
Junior $7500
Senior$7500</p>

<p>Any loans beyond that would require a cosigner. If you are instate for NY, there are a good amount of SUNY schools for you to look at…with reasonable costs for instate students.</p>

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<p>Can your children commute to any of the SUNYs as cptofthehouse mentioned above? I haven’t looked up SUNY pricing in a while, but I thought R&B was almost twice the tuition charge.</p>

<p>Her scores would need to increase significantly from those sophomore year PSAT scores in order to see significant merit aid.</p>

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<p>thankyou cptofthehouse</p>

<p>Did you mean $35k for yhe year or total?</p>

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<p>thankyou Thumper</p>

<p>Are those Stafford loans that you are talking about? and are they applicable automatically or do we have to qualify?
Yes a NY state resident.</p>

<p>Ct1417…She did take them again a couple weeks ago…Do you know what score she needs to get for Merit aid? Is there any relation to Psat score and Sat score?</p>

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<p>The room and board at the SUNYs can be high, but there might be off campus options that are cheaper.</p>

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<p>Does anyone know of any schools that don’t look at real estate assets against financial aid or with as much weight</p>

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<p>While not 100% accurate, simply add a zero to the end of each PSAT score. I do not know merit aid thresholds, but they vary and usually require both high GPA and high standardized test score. The higher the scores, the more money that is awarded. I believe NY’s cut-off score was 219 this year for National Merit Semi-Finalist.</p>

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<p>Your rental income properties will be looked at by ALL schools. The only real estate that is NOT included on the FAFSA is your primary residence.</p>

<p>If the equity In those rental properties is $1,000,000, 5.6% of that amount will be added to your family contribution (5.6% is the asset amount used for FAFSA need based calculations). That would be $56,000 (per year) which exceeds the cost of attendance at MOST universities in this country. You would not receive need based aid at MOST colleges.</p>

<p>The Stafford Loans are now called the Direct Loans. Your kids do not have to “qualify” for them. If you complete the FAFSA, your kiddo can take those loans.</p>

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<p>The Staffords are now called Federal Direct now and since they are in the name of the student they can be used by your kids (with no credit check). They increase as the student moves from freshman to junior and senior. They can be subsidized (no interest until after graduation or after leaving college for 6 months) or unsubsidized (interest accrues) at the colleges discretion.</p>

<p>The other federal loan is the PLUS loan (P stands for Parent). Parents can request any amount needed for that year. They must be taken out each year and there is a pretty low threshold credit check. I believe the interest rate is around 8% but I don’t keep track as I have only triggered a PLUS one time when one of the kids “sprung” summer semester on me and I paid it off in 3 months so not sure of the terms.</p>

<p>There is also a Perkins loan that the college can distribute to the kids, but I don’t know what triggers that - although I do believe it is need based.</p>

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<p>The general rule of thumb is to multiply the PSAT score by 10 to get an idea of what their SAT score will be. So 175 PSAT projects to about 1750 on the SAT.</p>

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<p>SUNYs instate cost a little below $20k for the colleges and a little above $20k for the university centers (Stony Brook, Binghamton, University at Buffalo, Albany) including tuition, fees, room and board. Binghamton doesn’t give merit aid but the other university centers and at least some of the colleges give at least some.</p>

<p>Here is a chart with the middle-50-percent stats for accepted SUNY students last year:
<a href=“https://www.suny.edu/student/downloads/Pdf/Admissions_qf_stateop.pdf[/url]”>https://www.suny.edu/student/downloads/Pdf/Admissions_qf_stateop.pdf&lt;/a&gt;&lt;/p&gt;

<p>You may want your oldest daughter to take the ACT to see if it’s a better test for her. I know that in NYC, Princeton Review gives mock tests, both SAT and ACT, and scores them so you have an idea of which would work best. My daughter did significantly higher on the ACT, so she prepped for it and did very well the second time she took it as a senior, much higher than her PSAT scores would have indicated.</p>

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<p>Good info to add cpt. A couple of other “freebies.” The price at the midwest private schools is generally lower than those in the NE and mid-Atlantic. The south also has some good bargains. It never hurts to target some privates and lob some apps in, they can at times be surprising if you are willing to venture outside a regional comfort zone and if the kids are willing. Also applications cost $$, as does sending the test scores as does submitting the Profile (if the college is a Profile college) and while those costs are low in comparison to that first tuition bill, it is money in your pocket to have a well crafted application list as opposed to a buckshot approach in search of a penny. I don’t know about you but I’m a skinflint and I would never have let my kids spend a grand or more on college apps. A grand buys alot of college textbooks.</p>

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<p>thumper…thankyou …that puts things in perpective …curious…what numbers work for need aid …can you give me an idea? income wise?</p>

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<p>Father…MOST colleges do not meet the full need of all students. Remember that! So for the vast majority of colleges, your FAFSA EFC (expected family contribution) should be viewed as the MINIMUM your family will be expected to pay each year. </p>

<p>As a ballpark…your family contribution will be 1/4- 1/3 of your GROSS income ( not your adjusted gross income…your gross income). Add to that 5.6% of the value of all assets…all (the only exclusions are balances in IRA, TSA retirement accounts). Also, any contributions TO your pretax retirement accounts will be added back in as income for the year of your FAFSA.</p>

<p>Assets include any real estate other than your primary residence, savings and checking accounts, investments, stocks, bonds, etc.</p>

<p>So…for example…if your income is $100,000…figure $25k to $33k from income. If your assets are $1 million…$56,000 additional. if your assets are $2 million, add $56k more. Actually…no…the max EFC is $99,999.</p>

<p>If your EFC exceeds the cost of attendance you absolutely will receive NO need based aid. At most colleges, the only aid you can count on is the Direct Loan.</p>

<p>With just a $100,000 a year income, your EFC would likely exceed the cost of attendance for NY public universities…thus no need based aid. However, still your child could take the Direct Loan.</p>

<p>Someone on this site has posted a link so that you can do these computations yourself for the FAFSA. Hoping they see this thread and do so here.</p>

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<p>Google EFC formula 2015, and you will get the link to the PDF of the FAFSA formula for school year 2014-2015. Print it out and work through it on paper. That will show you how your income & assets are treated.</p>

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<p>^^^</p>

<p>That will only tell him how FAFSA will treat his assets. We already know that he’s beyond Pell. If he wants aid, his kids will have to go to CSS Profile schools, and that formula won’t give him the info that he needs. Finding out that he has a FAFSA EFC of $XX,XXX isn’t going to give him an idea about aid he’d might get.</p>

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<p>I kind of did “reverse engineer” narrowing the choices to state schools in NY state…I figured investing $20,000 /year would do it but my income is not enough to sustain…Will there be loans available for them if needed or will my assets hurt them in getting loans as well</p>

<p>So, how much can you spend each year on your child’s college costs? And, how much can you spend on EACH child when there are TWO in college at the same time?</p>

<p>You may be spending too much time trying to figure out financial gymnastics when the results will be the same. All schools will look at those real estate assets. None will exclude them. </p>

<p>You have to accept that your kids won’t likely qualify for much/any need-based aid. I understand that. I have rental property. Our EFC is very high. No one would ever give us need-based aid. </p>

<p>I’m not sure that you’re understanding that really only the “best schools” (the top schools) give out need-based aid to those who qualify and who are beyond Federal (low income) limits.</p>

<p>So, you can have your kids apply to a few top schools just to see what happens.</p>

<p>BUT…also have them apply where their GPA and TEST SCORES are very high for those schools - with hopes of getting merit money. AND…have them apply to a few schools where you know FOR SURE that their stats will get LARGE merit money.</p>

<p>HIGH test scores are needed. At the schools that give out large merit, they give to those whose test scores are well-within the top 25% of the school…usually the top 5-10%.</p>

<p>So, if a school’s middle ACT quartiles are 25 - 29, and your child’s ACT is a 32+, then your child will probably get a nice merit award. (Have your kids take both the SAT and ACT…some do better on one or the other. for the SAT, usually only the M+CR count for merit)</p>

<p>Your D’s PSAT is equivalent to a 1750 as a sophomore. Very good test takers might increase their PSAT by 20 pts from soph to jr year. Some are lucky to increase by more. The largest jump I’ve seen is 55 pts. My own kids saw about 20 pt jumps. I think in NY, the PSAT has to be around 220 to make NMSF. So, not likely will your D’s score jump that much…but not impossible. lol</p>

<p>however, there are still MANY large merit opportunities based on SAT or ACT scores (with an accompanying good GPA…often a 3.5+). The test scores are more important, though. Simply a high GPA isn’t enough. There are too many kids out there with high GPAs. The test scores separate “the men from the boys.” </p>

<p>If I were you, I’d get my kids some SAT and ACT practice books and give them some incentives to use them. I gave my kids movie matinee tixs (1 for them, 1 for a friend) for each Sat morning they studied and did a practice test. It really paid off. I hardly had to pay anything for my kids’ undergrad. The older one got a full ride and the other one got nearly a full ride. One went on for a PhD and the other is in med school.</p>

<p>Look at it this way. Assume that you won’t qualify for any aid. If so, then if your child can get a “free tuition” scholarship somewhere, then the remaining costs will be about $15k per year (room, board, books, fees, misc). If your child borrows $5k per year from fed loans, then you’d pay $10k per year. IF that’s still too much, then your child can work over the summer and contribute another $2k or so.</p>

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<p>I believe his FAFSA EFC will far exceed the cost of attendance…starting there will give him a basic figure.</p>

<p>Father…what were you expecting? Were you expecting that your kids would all qualify for significant need based financial aid for college? How much CAN you pay each year? Are your instate publics affordable to you. Will your kids have the stats for significant merit aid someplace?</p>