High EFC Shock!! 40K Good Grief

Parents Forum
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<p>I've been perusing these boards for a couple weeks now. My impression is I'm one of the few in this position (I know this is BS because I'm sure lots of people are).</p>

<p>Anyway my FAFSA is 40K. Yes we have a good income (~160K) but that's recent. My wife just started working again 2 yrs ago, don't have a lot of savings I don't have 150K and the bank to cover 4 yrs at a private school or out of state public school. I'll not qualify for any need based FA either. </p>

<p>Oldest D is getting some merit aid but fact is if she get accepted to CMU or Columbia she won't be able to go there. I can kick in about 40-50K over 4 yrs and that's it. I've got 2 others behind her so I can't go into debt covering the 1st child. She wants to go to med school so going 100K in debt for undergrad is of course out of the question...not sure you could even get that type of loans if you wanted to anyway. So it looks like it will be good ole State U where she can go and come out debt free.</p>

<p>I'm just ranting here. FAFSA is pretty much based on current income. Live in a high cost of living state like Mass doesn't get factored it. Yes high income but no pension plans where we work, retirement savings have to be via 401K so that goes via the W2 so it shows on FAFSA. As opposed to a company with a full pension benifit which doesn't show up as salary.</p>

<p>I guess maybe my big rant should be on the high cost of college education. Costs going up 6-7% a year is obviously greater than inflation (or my income) can keep up with. College do these increases as a way of getting more $$$ from wealthier parents to help subsudize low income. Sorry but as middle class I'm not wealthy. </p>

<p>Point of this thread? Just to rant and see if others are in my same situation. Reading these boards you'd think 80% of the people are getting full rides or the parents have no problem forking out 40K per year.</p>

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<p>If your daughter is devoted to Columbia or CMU, she should be expected to help bear the burden of the cost. Med school is very expensive, and a merit-aid school or public U might be a better financial option, but she should still be able to consider the privates she likes if they mean that much to her. What state do you live in? There are also many good OOS publics that are relatively low-cost (~12K/year), but it's probably too late to apply now. Why if your income is 160K can you not afford to pitch in more than 10K/year??? Once your other children are also in college, FAFSA will provide you with more financial aid I believe.</p>

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<p>I agree with kcirsch.
I don't want to be mean, but if my family had a $160,000 a year income, I'd expect to pay the full cost of my kid's college education. We make far less, and I don't feel that we can afford our large EFC, so we are having our sons look at colleges that we can afford or are likely to give him merit aid. </p>

<p>Meanwhile, there certainly are many lower cost alternatives to Columbia if you don't wish to pay the big bucks to send your D there. We are very lucky ikn the US to have such a wide range of colleges to choose from. </p>

<p>Many kids fall in love with Hummers and Mercedes, but that doesn't mean that their parents buy those cars for them. I also think it's a good idea to check out the cost of colleges before encouraging a kid to fall in love with a place that one's family can not afford.</p>

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<p>Foomonchew- I feel your pain. We have a combined income of 130000. Our EFC from Fafsa is 39000. We have 3 children. We are also from northeast (N.J.) where cost of living is way up there. I really don't know how we are going to do it, and I think that explains these sleepless nights.....</p>

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<p>Join the club. We too are a 2 income family as are many of the people who live in my neighborhood out on Long Island. As the incomes are based on salarys of teachers, firefighters, salesperson etc, the family income here seems pretty high in comparison to most of the country but we ain't rolling in dough. Contrary to many peoples belief that we send our LI kids to HYP and other powerhouse schools- I would say that 2/3's of the graduates from my kids HS attend SUNY--local colleges like Hofstra and Adelphi and maybe other public Univ. like Maryland & Delaware. When all is said and done, most of us can't afford $40,000 to send our kids to college. Private U's that have been fairly generous in bringing down tuition costs have included U of Rochester-Boston-Syracuse and others. But you would still need to spend $30,000 a year. To me, SUNY Cortland and Albany are looking better and better. No one is looking for sympathy but if the family income is above $125,000, I do not think you are going to get much in financial aid.</p>

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<p>If Ihad big bucks to give to a college, it might be for financial aid for those who make just a little too much to get current need based aid but too little to pay full freight. Is there some collusion among expensive colleges that keep them from extending their definition of need a little higher up the ladder?</p>

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<p>eulenspiegel,
The Ivies and colleges feel that they are giving aid to 100% of the accepted applicants who have demonsrated financial need.</p>

<p>I think that some people who don't get aid don't realize that it's expected and normal to have to cut back or take out loans to pay for kids' college costs. It's unrealistic to expect that a family will be able to live exactly the same lifestyle while sending a kid to an expensive college. The only people who probably can do that are the truly wealthy. For others, sending a kid to college requires some sacrifice just like it takes sacrifice to buy a car or a house, other purchases that benefit oneself or one's family.</p>

<p>It's also important to realize that middle class people who don't want to pinch their budgets for college have other alternatives such as sending a kid to a place with merit aid, having a kid live at home and go locally, etc. Just because a student is smart enough to get into a highly competitive college doesn't mean the world or their family owes them that kind of education.</p>

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<p>I have to agree with Northstarmom on that. I think that is why in the end so many of our kids wind up at SUNY and other public U's.</p>

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<p>I don't totally disagree with Northstar mom, but don't you find it a little strange that so many schools are in lock-step as to the exact definition of need? I don't suggest that aid funds be drained away from those getting aid under the current definition, but there is another slice of the population, just a little above current need recipients that have to face the big financial question, while the poorer and the richer can base their college choice on other criteria.</p>

<p>In any case, what about an expanded definition of need as a partial alternative to merit aid at schools that use it?</p>

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<p>No pity from here. Some parents have diligently saved and are faced with EFCs significantly higher than their incomes. Their savings, in essence, are subsidizing educations of students whose families have much higher incomes and live much more extravagent lifestyles, but have no money in the bank.</p>

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<p>NSM - Amen. This is what I've been telling my husband for months now. </p>

<p>If our d is fortunate enough to get in at one of her expensive reaches, we expect to pay for it if we can. It isn't fun, but it is normal to curtail spending, watch the budget closely and make sacrifices during the college years. DH agrees in theory, but he is a saver not a spender....so it will be harder for him to watch the savings account deplete. He'll get used to it though. </p>

<p>Need-based aid is for creating opportunity where none existed before. I try to remember this always. We are fortunate, we have opportunities....so we give thanks and write the check.</p>

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<p>I'm with the NSM and company. When we had a similar income (we don't now, we're about a third of that at the moment), we were able to pay D's school out of pocket (about 35,000/yr back then) and put aside the same amount for upcoming S's school, every year. Which is why we can still send him to Columbia with a much, much smaller income now. We are hoping that we now qualify for aid, but if we don't, we'll be okay. And we live in NJ, too.</p>

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<p>I think part of the problem is that there is huge difference in 130,000 or 160,000 gross in some states, and earning this amount in another states. There is a difference if your pension is taken care of by the government or other employer, or whether you need to finance this. Fafsa does not seem to take these factors into account. It also does not take into consideration grad school, or whether other kids at home will be going onto college. The latter I can understand to some degree, b/c nobody has a crystal ball to predict the future.</p>

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<p>"Yes we have a good income (~160K) but that's recent."</p>

<p>I can completely relate to the OP. 4 years ago I left a company to start working on my own as a consultant. It took me three years to build up my business to where it is now thriving. I now have a significant income, where I will not qualify for need-based aid. However, I have no savings. As a matter of fact, I have a lot of credit card debt that I have accumulated over the past few years while starting up my business. Nevertheless, due to my current income, my kids are ineligible for any need-based aid. My daughter is interested in med school, and definitely has stats that could place her in the Ivy's (SAT I:790/800/760, and SAT II's:780/800/800/800), but she instead will be attending an undergrad institution somewhere with a full-tuition scholarship so we can save up for med school (again where we will not receive any aid).</p>

<p>"If your daughter is devoted to Columbia or CMU, she should be expected to help bear the burden of the cost." That is easy to say when someone has a middle or lower income, but when you have an EFC of $40,000 or more, then even if you contribute $15,000 per year, your child would need to borrow $100,000 or more, for an UNDERGRADUATE education. For someone with an EFC of $15K to $20K, their children can go to the Ivies and graduate with much less debt than that, even if the parents do not contribute anything.</p>

<p>The OP mentioned that he knows there is nothing he can do but was only venting. Northstarmom has no compassion for this man, apparently because his family earns more money than hers does. It is a fact that EFC is determined by current income, not income averaged over the past 10 or 20 years. This certainly hurts, especially when a family decides to get a second income to supplement the income to be able to afford college more easily. Middle class / upper middle class kids do not really have much of an option for the Ivies, especially when the parents have 3 or more children, so they cannot afford to take a home equity loan, etc.</p>

<p>For those who say "I make $160,000 per year, I would just pay the $40,000 and not complain," you likely either do not have many other children or you have had a comparable income for many years.</p>

<p>Other things that do not factor into EFC are retirement plans, etc. Someone who earns substantially less than I do but has a substantial pension to look forward to is in a dramatically different position than I am. I could easily say, "Well, if I had THAT type of pension to look forward to, then I could afford to pay $40,000 per year for my kid." However, I understand that the rules are what they are, and the fact that I have a larger income now is all that is taken into account. So I will just have to go back to work and try to earn enough money to pay for all 4 of my kids to go to college/grad school. However, I do have compassion for the OP. It is a tough situation when you are trying to earn a little more to help your kids and it feels like it backfires: your kids cannot afford to go to a top private school. It is certainly not the end of the world to go to a school a rung or two down and get a tuition scholarship. But many of those posters who smugly claim that they would GLADLY pay the $40,000 per year if, ALL OF A SUDDEN they were earning $160,000 next year are mostly kidding themselves. If only the income increased without a commensurate increase in your assets, where would the $40,000 come from?</p>

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<p>Pretty impressive. A 160K/yr income and able to pay 35K for one kid and save 35K for another per year at the same time. That's 70K/yr out of a 160K income.</p>

<p>Some pretty good points presented here. I've got to reevaluate how much I can spend. I should be able to kick in more that 10K/yr. </p>

<p>I live in Massachusetts. 6% income tax. Right off the top between fed/state income tax, FICA (soc security) + medicade It's over 50K just for that. Retirement savings (401K) is currently 24K/yr, don't have a pension plan so I've go to save on my own. Could cut this back during college years I suppose.</p>

<p>I've got 3 kids about 3 yrs apart so out of next 10yrs there will be only 2 overlap years. Should have had triplets :)</p>

<p>State U is Umass-Amherst. Tuition/fees + R&B = $16K/yr. Merit aid is 7.5K (commonwealth college) so that's 8.5K/yr (to start but if cost goes up 6%/yr the merit aid stays fixed that will grow). </p>

<p>Umass-amherst is a good school. Ranked 104 in USNEWS. Not the best but a pretty good deal if you ask me. Paying an extra 30K/yr to go to an IVY seems a strech but I'm I'd like to hear if others think it's worth it.</p>

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<p>We get caught up on the "retirement" thing. In my state, teachers (I'm a teacher) do NOT contribute to social security at all (and won't collect it either). Our retirement is via 403B or state teachers retirement. In both cases the amount contributed in 2005 will be counted as INCOME on the FAFSA. I have no choice about the teachers retirement plan. I MUST contribute to that. Because my state doesn't fully fund the teacher's retirement program, I have little confidence in its integrity. SO...I have a 403b also. DH works in a private company with NO pension plan except his 401K (and SS). Again...it's not like in the "olden days" when there was a company pension and those 401K plans were gravy on top. The IS no company pension, and many experience the same thing. NOW...is it my decision to fund my retirement...? Well...yes. But next year when two kids are in college that will not be able to happen. Those contributions will have to be used for college expenses.</p>

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<p>I wouldn't say that I would happily pay the $40,000 a year.
However even with our income, we did have savings set aside for college. We also have low expenses, even though we live in a high cost area, because we have made conscious decisions over the years to limit those expenses.
Limiting our family to- 2 children and having them 8 years apart for one( although, now I find out that you spend less when they are both in college at the same time, )It is just amazing how much kids cost. I really don't know how people do it.
Tis true EFC is determined by current income.
For everyone.
However, aid offices ahve been known to consider other information.
Somone suggested using the printout from SSA as a resource highlighting salary changes over the years. I think that is a great idea, particulary if you are getting close to retirement age and have few working years left.</p>

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<p>"Northstarmom has no compassion for this man, apparently because his family earns more money than hers does. It is a fact that EFC is determined by current income."</p>

<p>I don't know it's correct to say that I have no compassion for him. I actually have a lot of empathy for him in that although we make less, our EFC is probably about the same as his is.</p>

<p>Depending on what the cost of living is where he lives, we may have very similar lifestyles. I know personally that it hurts to know that one would have to pay $40,000 + to send a kid to a full cost college. </p>

<p>Still, I feel lucky to be as comfortable as I am (and trust me, we are not living in luxury) and to be able to have the choice of biting a hard bullet and sending S to a very pricey highly ranked school that doesn't offer merit aid or sending son with relative ease to a lower ranked school where he can get merit aid or where the cost would be easier for us to carry.</p>

<p>Overall, I feel lucky to have things like a relatively decent household income that would allow us to pay for many colleges without feeling a huge financial burden, and I feel lucky to have health insurance, to live where there's a decent school system, and to have a kid who has the intelligence, ECs and scores that can attract merit offers. I also know that kid's scores and ECs and academic program are due in large part to his luck in growing up in a middle class, highly educated family.</p>

<p>I don't think that most people are that lucky. I don't think that it's terrible that the high priced/no merit aid colleges that S might love probably wouldn't give him aid. I feel very fortunate that our income and S's scores, etc. mean that S still should have a nice choice of colleges, even if we're not willing to pay big bucks for places like Oberlin and Wesleyan that he might also enjoy.</p>

<p>The fact that when I taught at a second/third tier, I had low income students who were working up to 30 hours a week while going to college fulltime, who were also caring for siblings or sending $ home to their impoverished parents, and who even were selling their own blood to buy books makes me not complain about any belt tightening my family might choose to do to send S to college.</p>

<p>I guess that one could say that I have empathy for the OP's shock at being expected to pay $40,000 a year for college, but I don't have a lot of sympathy for the OP.</p>

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<p>
[quote]
I also think it's a good idea to check out the cost of colleges before encouraging a kid to fall in love with a place that one's family can not afford.

[/quote]
</p>

<p>It doesn't sound like anyone can afford to have their kids fall in love with a college. </p>

<p>Even a college that looks comfortably affordable when a student is in 11th grade might not be affordable down the road. </p>

<p>Stuff happens...especially to parents who own small business, whose incomes can be extremely volatile.</p>

<p>If you have a secure job (e.g., civil service or tenured professor) with a stable salary, reasonably stable health care costs from a generous employer plan, predictable pension plan, and adequate life insurance/disability insurance, you are in a position to predict what your family can afford to pay down the road. You can plug your numbers into an EFC calculator and get a reasonable notion of what need-based colleges may offer.</p>

<p>If you own a small business with a changeable future income stream, pay for your own health insurance, provide for your own retirement saving, and/or have an insecure job, then it's really pretty impossible to predict whether the cost of a need-based college will be manageable for your family, especially with college costs rising at double the inflation rate.</p>

<p>The safest places for families in the latter category to encourage their kids to consider are places with generous merit-based scholarships, where continuing aid will depend on the student's performance rather than the families fluctuating circumstances.</p>

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<p>IF your school takes the CSS profile, it does take into consideration where your live, </p>

<p>While OP may live in a high Cost of living area like MA. What it does not take into consideration is the lifestyles that people choose to live. If one has an extravagant house and owes a lot of debt on it, it is cont considered because it is a lifestyle choice. OTOH, if your house is paid for you have equity, which colleges look at as an asset which you can draw upon.</p>

<p>While the contibutions to your 401 K are factored back in as income, parents also have a level of income protection based on age, so while it may not be a balance to your liking, there is a balance (this happens on the CSS profile).</p>

<p>If you additonal chidren attend college during the same period of time while you first born is in school your EFC is not suddenly doubled or tripled but rather cut in half and by a third. </p>

<p>Does all of this mean that it easier to finance our kids education? Nope it just means that we have to sit down have the hard talks with our kids and let them know what we can or are willing to pay/borrow for these educations. It also means casting a wide net for schools where if your D is a contender for Columbia, she would also be in line for merit money at other schools (especially if she is willing to get out of the NE?midatlantic bubble).</p>

<p>You state that your EFC is at $40,000 and you can only afford or are willing to pay $12,500 year toward her education. Presenting this scenario, as hard as it is to say no, then the talk should have been "Columbia is not a feasible financial option for our family" but you should look at school X where you would be a contender for some great merit.</p>

<p>As a parent of a college student, she knows that she has to be an active participant in the financing of her education. She also knows that sacrifices are being made, so there is no fancy vacations, brown bag lunches and no shopping on my end, and no talk of spring break trips (unless she can swing it and still manage to take care of her business).</p>

<p>While she is also looking at professional school for it, she already knows that it is on her, because this parent does not have it.</p>