How much aid can I get realistically?

Paying for College
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<p>I'll try my best to explain my situation here. </p>

<p>So my father is retired. He gets 30k social security 20k pension, 50k on stock dividends and fluctuating extra income from stocks (last year around 50k, year before around 20k). Mother works, makes around 20k. </p>

<p>Total comes to between 140-170k gross income. Home eq. is maybe 400k and we have around 500k in stocks as assets.</p>

<p>I have a twin sister also entering college this year and one younger brother who will be a sophomore in high school. I'm worried about aid because both of us are applying to pretty expensive private colleges (Ivies, highly ranked LACs). I know there's some discount with 2+ kids in college but I don't know how much.</p>

<p>I know FAFSA expects something around 6% of assets/year minus a 50k or so "nest egg" which would put my EFC around 27k + whatever they expect us to pay based on income. So I'm expecting around 35 to 40k EFC. But with me and my sister both that's 70-80k a year which is very unrealistic, especially since our college funds would mostly come from the money my dad gets from stocks, but by taking money from his stocks to pay for college, that asset money would go down + our income would go down... Especially bad because my dad is in his 60s, retired, and in declining health.</p>

<p>TLDR: Making 140-170k gross with 400k house + 500k stocks. Guessing me and my sister both will be expected to pay around 35-40k because of our assets but after tax my family gets maybe 110k net and with both of us in college paying 75-80k it would be a huge burden. Taking money from our stocks would lower our income. </p>

<p>Thanks for any help. I'm really unsure of where I stand right now since my father basically dropped this bomb on me a couple hours ago when trying to fill out the Profile. Until then I really had absolutely no clue how much we made-- I assumed only my mother's work and my father's 50k or so in retirement funds. I certainly had no clue about his half a million in stocks. All my hopes were on financial aid but I'm not sure how much of a reality that is at this point.</p>

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<p>Most of your parents’ income is from “unearned income”, that will have a harsher calculation. </p>

<p>Did you have your dad also do the Net Price Calculators on the schools that you and your sibling are applying to? If not, have him do them…</p>

<p>You and your sibling need to ask your dad how much he can contribute towards each child’s education. Did he give a number?</p>

<p>I’m guessing that you and maybe a sibling are applying ED somewhere, which is why you’re filling out CSS now? </p>

<p>If you believe that these schools are going to expect your family to pay more than they will pay, then you need to come up with some schools that will give you merit for your stats.</p>

<p>How much will your parents pay each year for EACH kid in college? </p>

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<p><<<
I know FAFSA expects something around 6% of assets/year minus a 50k or so “nest egg” which would put my EFC around 27k + whatever they expect us to pay based on income. So I’m expecting around 35 to 40k EFC. But with me and my sister both that’s 70-80k a year which </p>

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<p>Ok…so you’ve figured that $27k of total EFC will be from assets.</p>

<p>With that income, EFC will be about $50k. So, $50k from income and $27k from assets, would be an EFC of almost $80k. But, then the EFC splits per child.</p>

<p>HOWEVER, CSS Profile schools do not do a 50/50 split. They do a 60/60 split. So, with two in college at the same time, the TOTAL “family contribution” could be more than $80k per year. </p>

<p>However, if you get into HYP or S, then they are more generous. </p>

<p>Which schools are you and twin doing ED???</p>

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<p>My father said that he expects to pay 25k a year for each of us, so 50k total. I don’t know how realistic it is to get an EFC of 25k with our current income and assets.</p>

<p>Net price calculators are strange because I get wildly different calculations from very similar schools. </p>

<p>I wanted to apply ED to Brown but now I’m thinking of EDing to a 568 school like Amherst or Columbia because they could potentially give better aid since they cap assets. Still, I’m not so sure about ED anymore because if I got in I probably WOULD be able to pay but it would be a huge burden… but since I’m <em>able</em> I couldn’t ask them to take back the decision. </p>

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<p>Since you and your siblings are under 18 and your dad is collecting $30k retirement social security per year, are you and your siblings also receiving monthly social security checks of about $400 each? If so, have your parents been saving this for you for college?</p>

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<p>@mom2collegekids I estimated a total of around 80k a year so this is right in line with that. 80k would be immense considering our net income is around 110k and my parents still have themselves and my younger brother to support. That’s why I was considering the supposedly more generous 568 consensus schools because even though they do Profile they limit the amount of assets that count towards your financial aid award.</p>

<p>@madison85 I had no idea that that was even a thing. My dad has been VERY vague about our income.</p>

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<p>Yes it’s a thing. While you’re under 18 the checks should be going to a representative payee, in your case a parent. When you reach 18 the checks go directly to you. They continue until you graduate from high school.</p>

<p><a href=“http://www.ssa.gov/retire2/yourchildren.htm”>http://www.ssa.gov/retire2/yourchildren.htm&lt;/a&gt;&lt;/p&gt;

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<p>@annoyingdad Interesting. I didn’t know this. I confronted him about it and he told me he used it like normal money for food and stuff. </p>

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<p>Sounds like the money has been coming from SS for the under 18 kids, but the parents have just applied it to household expenses, which I guess they’re free to do. They’re not required to save it for college. </p>

<p>Since you mentioned a rather high SS amount, it did seem like the money was coming in for the three kids. </p>

<p>When do you and your twin turn 18? </p>

<p>As for those 568 schools…I think they just limit home equity. I don’t think they limit all assets. Can you check on that?</p>

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<p>Okay, did a little research and yes, it’s only home equity capped, but they cap it at 1.2x income so hopefully that will help a <em>little</em> bit. BUT Profile (and therefore Consensus) is actually a little more lenient with only 5% of assets expected to go to the student, not 5.6 like FAFSA, which was my mistake. Not much of a big difference there, though.</p>

<p>So I assumed income EFC from this chart <a href=“http://www.stratagee.com/resources/efc_quick_reference/1213_efc_quick_reference.html”>http://www.stratagee.com/resources/efc_quick_reference/1213_efc_quick_reference.html&lt;/a&gt; which says around 30k based on our income, so that plus assets would be a total of 60k EFC, then a 60/60 split if my sister went to a similarly priced school would be around a 36k EFC total for me…? Am I calculating this correctly?</p>

<p>And when they say they expect 5% of assets do they mean including primary home value or no?</p>

<p>We turn 18 in April. </p>

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<p>You are not likely going to be able to estimate FAFSA EFC very well because of most of your parents’ income is from unearned sources (not a paycheck) . The calculations are tougher on income from stocks, pensions, SS, etc.</p>

<p>Also, using FAFSA EFC formulas aren’t going to be accurate for CSS schools, since they have their own formulas.</p>

<p>Have your parents use the Net Price Calculators on each schools’ website.</p>

<p>AND…what are your financial safety schools? Those are the schools that you know FOR SURE will be affordable (easily affordable) and that you and your twin would like to attend? Be sure to apply to those NOW as well, because those will likely be schools that give large merit scholarships and their scholarship deadlines are likely soon.</p>

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<p>Net price calculators are wildly variable, like I said. Harvard’s NPC, on their site and not through collegeboard, tells me 30k EFC, Stanford’s tells me 40k, Columbia’s, through the collgeboard NPC, tells me 50k. Since they’re very comparable schools in general they should probably be giving me similar amounts but they’re not and that’s worrying.</p>

<p>We live in CA so Berkeley, UCLA, etc. will be cheaper for us since they’re in state. I’m applying to some schools where I know I can get aid but still feeling a little rough just because they’re obviously not as great as schools with no merit aid. But I’m lucky to live in CA because I can still go to a great public school so I’m not too bummed.</p>

<p>Anyways. Thanks for the help. I really appreciate it.</p>

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<p>@damara: Congrats to you for confronting your dad about the Social Security payments. I calculated that with three children (the total for the three kids is 50% of the parent’s total) - a check has been coming to you for around $400 a month for as many years as your dad has been collecting social security. [$30,000/year x 50% = $15,000, and then divided by 12 months = $1250 and then divided by three children = $417/month].</p>

<p>While people on CC have said differently (and I am not a SS expert) and have a different perspective, my understanding is that your parents did NOT have to spend this on your needs (food, clothes, insurance, housing) and could have saved 100% of it for your college expenses. There is actually no requirement that this money MUST be spent.</p>

<p>A similar situation happened to a friend of mine regarding her daughter with the divorced dad receiving the child’s SS checks and using them for ‘his’ contribution to her verbally agreed-upon child support (which is perfectly legal) - but he claimed that he HAD to spend the money and it could NOT be saved for college. </p>

<p>At my suggestion, my friend marched over to the SS office with her daughter and had an appointment about the situation. Since the child lived almost 100% of the time with the mother, the mother was able to get the representative payee changed to herself and get the monthly checks out of the divorced father’s control (he had subsequently remarried, and had a boat, horse, RV to pay for). Now the child’s monthly checks (over $1000, since she is an only child) are going into college savings - a 529 account.</p>

<p>Like I said, while your dad can use your and your siblings social security checks to pay to take care of you, he appears to have plenty of money and does not ‘need’ YOUR SS money. (I look at it like your SS money is helping him increase his half million in investments since he doesn’t have to spend as much of his own money to take care of you). I personally feel parents who get this windfall by virtue of being old enough for SS but with kids under 18 should save that money for the child in a 529 account.</p>

<p>When did you dad turn 65? Perhaps you should calculate how much you received in SS since he began collecting SS, and, well, I think you should just discuss this with him; that (ethically, in my opinion) this should be your money and he should set this chunk aside for you (and for your siblings) in 529 accounts.</p>

<p>In my friend’s situation - it seemed clear that by the transitive property, he was using the daughter’s SS money to support his retirement lifestyle of new wife, new boat, new horse, vacations. Since he wouldn’t have been able to afford those things if he had to pay for his 50/50 share of his child’s expenses from his own money.</p>

<p>[I find the SS situation similar to when a child pays for his own tuition through loans and scholarships with little to no help from the parents, and then the parents take the $2500 American Opportunity Tax Credit and do not turn around and give the child the $2500 tax savings].</p>

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<p>Those NPCs on collegeboard for Stanford, Columbia etc. are still customized for the specific school. The results are only as good as the information that is entered.</p>

<p>Regarding the SS, the purpose is to provide for the child’s food, shelter, current education, entertainment etc. until they graduate from HS and can be self-supporting. Any extra can be saved for future use such as for college education. He is supposed to be doing some accounting and the SS admin may ask him to file a form each year concerning how the money was spent. When you turn 18 in April before graduating, at that point the checks will be made out to you and you should set up direct deposit. You will have to have your school fill out a form that says you’re still a HS student and when you will graduate. In theory at that point you use the money for your own support. That could be reimbursing your parents for expenses.</p>

<p>I’m sure in stable families, this money is often treated more informally like your dad is doing but in effect it should allow parents with decent or better incomes to contribute more during the college years even though the money isn’t currently being earmarked for that in a specific account. This may be part of why your dad thinks he can contribute a total of $50k per year for the two of you. Remember that this benefit is based on your Dad’s work record and not on anything you did to earn it. Still the purpose is your current and perhaps future support.</p>

<p>I think Madison85 is underestimating the amount of the checks. Each child can get 50% of the parent’s full retirement amount but there is a 150% to 180% cap for the family as a whole. I think the checks are more like $1200 a month per child. You will know the amount in April for sure. I also think Madison85 is suggesting a more nefarious situation here than is warranted by what we know about the family dynamics.</p>

<p>OP, I don’t know your relationship with your Dad. You said you confronted him about this. I think you have the right to discuss it with him but confrontation probably isn’t the right attitude going in.</p>

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<p>@annoyingdad: Thanks for your input and opinion. I am always trying to learn more on CC.</p>

<p>I thought the max was 50% of the retired parent, and didn’t have time to check the rule. The two situations (one not described above) that I personally knew about were more contentious and colored my experience/opinion about parents who spend the money to replace their own agreed-upon (but not court-ordered) child support (in a divorce situation) and don’t save it for college and hide it from the other parent and the child, or are untruthful that it MUST be spent (nefarious!).</p>

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<p>I wonder if the $30k SS is just your dad’s retiree portion or if that includes all of the kids’ monthly payments as well. What type of job did your dad have before he retired – more ‘blue collar’ or executive level?</p>

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<p>I would think that the $30k is what’s on the parents’ tax return and would be solely the Dad’s. If the Dad is getting $50k+ a year in dividends there are a lot of assets which most likely resulted from a high income for a long time and thus large social security payments. The $400k in home equity would indicate that too. But maybe not. The kid’s social security shouldn’t be included on the parents’ tax return.</p>

<p>I do think the Dad in this case should have discussed this money with the children when he retired and how it would be used. I discussed it up front with my daughter and she understood. Some of it was allocated to her expenses in case the SS admin asked, some was saved. In the end though it all served to increase what we could contribute for college.</p>

<p>In reading the Guide for Representative Payees though, there was no mention that it all could be saved. Most of that guide is for elderly, incapacitated etc. people where the payee could be an external person, lawyer etc. or non-nuclear family member. The part concerning the OP’s situation with a parent representative payee still talked about spending the money on current needs which really may be needed for that purpose in the case of many retirees who don’t have the income of the OP or even me. Retirement isn’t always voluntary and many retirees are just scraping by and if they had kids late in life are just hoping to get them through HS and self supporting.</p>

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<p><<<
Net price calculators are wildly variable, like I said. Harvard’s NPC, on their site and not through collegeboard, tells me 30k EFC, Stanford’s tells me 40k, Columbia’s, through the collgeboard NPC, tells me 50k. Since they’re very comparable schools in general they should probably be giving me similar amounts but they’re not and that’s worrying.</p>

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<p>H and S give super-aid, so their aid will be more generous than most schools. Columbia’s results are probably what most full-need CSS schools would indicate.</p>

<p>For two kids at a UC, your parents would pay $60k total. If that is fine with them, then a UC safety will be your safety. If your dad says that he can’t pay $60k per year for two kids, then you need other safeties. </p>

<p>I don’t fault the dad for not saving the SS money for college. The purpose of the money is for living expenses. It doesn’t sound like the dad will leave his kids “high and dry” so in the end, if he spend $100k for each child’s college education, that will be more or about equal to what he got from SS for those kids.</p>

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<p>@Madison85 @annoyingdad Thanks for the info. It wasn’t so much a confrontation. I just asked him about it. </p>

<p>@mom2collegekids We discussed the UCs and he is willing to pay for them. I’m planning to live off campus after freshman year and probably take out loans if I need to but the UCs are fine. I just wanted to get a feel for what I could get from private universities. So sounds like unless I can get into HYPS then I’m out of luck. </p>

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<p>Um…no. They might be comparable schools in terms of USNew rankings, but they have different policies in terms of awarding need based aid, and different formulas for calculating need based aid. And clearly some are more generous than others to higher income earners…and some are not.</p>

<p>Your family income is on the high side, I would strongly urge you to look at those affordable colleges. Build your list beginning with affordable schools that you like. Work up,from there.</p>

<p>It’s not likely that your family contribution will only be $25,000 a year at most exoensive private universities.</p>