<p>I'm currently a senior and I'm the only child of the family, so the FA process has been new to us. My parents had a college fund saved up since the day I was born and they've racked up around $20,000 to this day. The school I'm planning to go to gave us, what I thought, a generous amount of money. We have:</p>
<p>That's a total of $34,800 and the tuition is 52,758.
That means we'd have to pay $17,958 out of our pocket.</p>
<p>Parents (or anyone), is that too much? I'm still a teenager who's had no work experience so I don't really have a firm sense or understanding of how much money is considered too much or too little. I personally thought that the money we'd have to pay isn't so bad, but I thought about it more and now I'm changing my mind and thinking it's expensive. My Dad thought it was a pretty good deal.</p>
<p>My parents both run small businesses and with a combined income, they make $40K - $45K.</p>
<p>It sounds like a lot of debt to me. Too much, in my opinion.</p>
<p>You’ll use up the whole college fund freshman year and then, assuming you get similar package and the tuition does go up–you’ll rack up 8k/per year for soph, junior, senior 8x3= $24k PLUS out of pocket $18k/year x 3 =$54k.</p>
<p>That’s a total of $78,000 more you will need to come up with. With an income of 45k, I can’t imagine they could come up with anywhere close to that, or even qualify for loans of that amount.</p>
<p>Just exactly how does your family propose to come up with that $17,958? All of your college fund could be gone in one year. Will your parents be able to pay some of this from current income, some from your college fund, and some more from a Parent Plus loan?</p>
<p>Your total loans must include both Stafford and Perkins, because the Stafford maximum for freshman year is only $5,500. Will your college expect you to borrow $8,000 each year? That will leave you with a debt of about $32,000 on graduation which works out to be roughly $370 due each month for ten years to pay it off. This is like an extra car payment for a not-so-cheap car. On the high end, but probably do-able for most people.</p>
<p>As small business owners, your parents are used to evaluating financial information. Have them sit down with some of the calculators at FinAid.org, and test out various financial scenarios. Here is one that lets you compare several financial aid offers side-by-side: [FinAid</a> | Calculators | Award Letter Comparison Tool](<a href=“Your Guide for College Financial Aid - Finaid”>Award Letter Requirements - Finaid) Remember that some of the costs in the college’s estimated Cost of Attendance (COA) are things that you can reduce by buying cheaper textbooks, living in less expensive housing, or electing a less expensive meal plan. You also can help pay for more of your family’s share of the bill by working more hours during the summer vacations, and by finding a better part-time job during the school year.</p>
<p>Your aid package may be perfectly workable for your family. Just be sure to take the time to understand what “workable” will mean in your particular case.</p>
<p>Well we’ve already payed the deposit to my school so there’s no turning back and my Dad is pretty set on me attending the school I’m planning to go to. I do plan to work when I’m at college. My parents have been trying to improve their business lately. I do plan to work over the summer as well. I’ve applied for some scholarships. And I don’t remember my parent’s EFC with me now, but when I have the time I’ll go look it up when I come back.</p>
<p>Thank you happymomof1! I’ll check that link out when I come back and yes, the loans is Stafford and Perkins combined. I will definitely plan to buy all my supplies cheap! Wow, maybe I should’ve taken the expenses more into consideration I’m new to this and so are my parents, so this is … brutal now that I’m seeing the numbers add up.</p>
<p>3 suggestions.
One, as happymom says, discuss w/ your parents. Even though they own a business, they may not be looking at the whole picture. Be sure to go into this with your eyes open.</p>
<p>Two, consider asking the school to revisit your package. Maybe they can do a little better. It can’t hurt to ask. </p>
<p>Three, even though you have paid a deposit, that is small change compared to the big picture. I have known kids, many, unfortunately, who start off at expensive dream college but can’t finance beyond the first couple years. End up in debt, come home, if they are lucky go to local college (more debt, but less) and graduate.</p>
<p>If you look at the whole picture & that is something that might happen to you, it would be better to apply to local college, save money, and transfer later possibly.</p>
<p>I know, not fun. But unless your parents have significant assets that they are willing to risk, and also have great credit, they may not even qualify for that many loans.</p>
<p>Better to figure it out now that at the end of freshman year. </p>
<p>I hope they have another source of income or perhaps other savings & that my concerns are unfounded!</p>
<p>Jen - I would encourage you and your parents to continue evaluating your options from a financial perspective. Just because you’ve paid a deposit doesn’t mean you have to go if you can’t afford it.</p>
<p>One of the factors that your parents need to take into account is that you may not be able to borrow enough money to graduate from that school. Your savings will be gone after year one, if they’re approved for that loan amount year two there is no guarantee that they will be approved in year three or four.</p>
<p>I have known families who were unsure of whether or not their kids could return to school for their senior year due to reaching their limit on borrowing years 1,2 and 3. If this happens to you, do you have wealthy relatives who could/would cosign a loan? Will it be worth it to rack up debt if you’re unlikely to be able to afford to graduate from this school?</p>
<p>If there are resources that your parents are willing to tap into or liquidate to make this school possible that’s a choice, but they need to realize that there are no guarantees that the school will continue to be within reach of their borrowing power.</p>
<p>I know it seems like a good deal at first, because you’re looking at all the free money they’ve offered - it is substantial and it is flattering, but it is not close enough to the cost of attendance given your savings. Your parents have save 20K in 17 years - that is the best prediction of what they will be able to save in the next four - which in my opinion makes this school a bad purchase, however enticing it may be in other respects.</p>
<p>Second semester tuition are usually required in Oct-- So just as you have started your first semester the bill comes in for the next. It’s a BIG pill to swallow. Will your parents have another $9000 ready to pay? (after FA pkge) What about living/transportation/book expenses (another $1K to $2K)</p>
<p>If you decided to postpone attending HC - they may refund your deposit if you ask really nicely & suggest that you will be re-applying as a transfer for jr yr- (after attending comm college of state school).</p>
<p>HC is a great school better to finish w/ a degree from there then to just have a freshman yr there.</p>
<p>You should add the loans and work-study to the contribution, and that comes out to almost $28K total payments per year. Is that too much? Depends on the family. Some can afford that and pay it to go to a particular college. Is it too much for you? That is up to and your parents to determine whether you can pay the difference between your savings/loans/work-study and the annual payment from the family. </p>
<p>Is it too much for this particular college? That depends on your other options – do you have less expensive alternatives? Also, are you and your parents willing to make the payments and loans – in other words, it will be a financial challenge that you need to decide whether you want to make. What are you getting here that you do not get at less expensive options?</p>
<p>I think you should take the advice from bchan and paperplane and use the calculations from happymom to work through all the financial issues. Make sure you can actually afford it and are comfortable making the investment.</p>
<p>It does depend on the family as to whether an amount is too much. In your case, you, as a family, are being asked to pay $27,758 this upcoming year. You don’t count work study or loans as aid since they are both coming from future funds out of your/your parent’s pockets. I am assuming that the $8k is from Stafford and Perkins monies. </p>
<p>How are you parents going to pay their $17,958? Can they do this comfortably without stressing themselves and their financial plans? You are an only child, and they have saved some money, and they will save a bit more when you leave home, and they will get a tax benefit as well, so it may well be doable. </p>
<p>I look at college cost in terms of past, present and future costs divided between parents and child. The savings are from the past, the payments from the year’s income the present and the loans future. The numbers are workable in your case, yes, for an average family. The big issue is whether your family, at their income level, can afford this? In your favor, they have saved and you are an only child. You are very much squeeze, however, with little lee way for increased costs, an extra issues. Taking on a job—done already. Taking on more loans–you are maxed out. That is usually breathing room. </p>
<p>But if you and your parents feel it is worth it, I would go for it.</p>
<p>Jen - another thought, you don’t say what business your parents are in. I think the stability of their income now and into the future needs to be considered. Also, how long are they able/willing to work? There are some parents who would want to be the Walmart greeter at age 70 if that put their kid in the school of their dreams (I’m not saying I think that’s a good idea or that I think they will think it’s a good idea at age 60+ either) but certainly there are some self employed jobs that are more easily maintained into advancing years than others. Things like this need to be taken into consideration, not hopefully, but realistically.</p>
<p>I imagine your parents really, really want to do this for you - but there are many people with higher income than theirs who would not think this is doable and that judgement in no way means they love their kids less. This is an area where kids don’t have to blackmail parents to overspend - parents will guilt themselves into it without a second thought.</p>
<p>Appeal - write a letter immediately and send it to the admissions office, preferably to a specific person if you can find his name on the school site. I did that and can finally afford to go to my dream school. After you write the letter call and explain your situation, because personalizing yourself will always help you with your appeal.</p>
<p>First off, thank you everyone (happymomof1, paperplane, bchan1, livesinnewjersey, Copterguy, cptofthehouse, and mom2collegekids) for all the advice! It was a lot of good information to read and I’ve discussed it with both my parents. </p>
<p>I misunderstood what my father was saying, and we’ve actually had $60,000 in my college fund and have started saving when I entered elementary school. Mixed up information. They meant that they would be willing to pay $20,000 each year. My apologies for the confusion.</p>
<p>I wonder whether this will change your minds and advice.</p>
<p>bchan1 - My parents both work as drycleaners/alterations and run seperate businesses in different areas. They are willing to work as long as they can because sadly, they don’t have a retirement fund :(</p>
<p>After my talk with my parents, the only concern they have for me is what will happen to me after my undergraduate studies. They can only afford my undergrad years and that’s it. I’ll have to pay my graduate school tuition on my own and I plan to work on the side as a part time job throughout school.</p>
<p>Leaves your parents less than $3K a year to have to pay out of current income which will problem be helped by tax credit and money saved with you being out of the house. The question now is whether you loan burden is acceptable to you. As a general rule, your loan/work amounts will go up each year, as will the cost. You are pushing what many consider acceptable limits in terms of ug loans even though some are subsidized. With no retirement fund, getting older, and college costs, it will be tough at their income level to help you out, but evidenced by their savings for you, they are frugal and careful. You do realize that part of why they have no retirement fund is because they saved for you.
It looks like you are pretty much set in what you are going to do. It’s never easy when going to these expensive schools. Good luck and enjoy. A hug to your parents too.</p>
<p>Well that does sound better. Others may have more detailed advice but I would try to minimize loans for first few years–keep the loans beyond the fed ones for the end, because that will keep interest from racking up while you are in school. And once you’ve spent more of the college fund, you MAY get better aid. (No guarantees…but if the money was in your name, not in a 529, that could be part of why they have your need lower than I would think it would be–money saved in student’s name ‘counts’ against you more than money in a 529 or in the parent’s name).</p>
<p>Yes, I do realize that the reason they don’t have a retirement fund is that they’re doing it for me, and I’m moreeeeee than thankful of what they have sacrificed. I may not show it to them, but I am awfully thankful and I do plan on giving them lots of money in return once I start my career of being a pharmacist. It’ll take 8 years, but it’ll be worth it. They work many hours through the day 6 days a week with no vacations except holidays under uncomfortable conditions, so they definitely deserve it!</p>
<p>paperplane-</p>
<p>My parents probably plan on taking care of the loans early anyways and thank you! Just to clarify, what do you mean by “keep the loans beyond the fed ones for the end”?</p>
<p>“keep the loans beyond the fed ones for the end”</p>
<p>If you and your family need to supplement the college fund with a few Parent loans for them or Private loans for you, you should wait to take those on after you have maxed out on the federal student loans. This has to do with the way interest accumulates for different kinds of loans.</p>
<p>You might also look into jobs on campus during the summer or RA positions later to help with R & B. I know jobs can vary, my son was much luckier than my daughters with finding them, but it can accumulate.
Freshman summer, he worked for 8.50 an hour at a store and made just under 2500 and over the year, it reached 4000 which he put part of it toward his tuition, abut 3,000. </p>
<p>I agree, take the stafford loans (which get larger each year) and perkins first, they have much better interest rates.</p>
<p>And I second what HappyMom said about COA, none of my 3 chidren came close to what they estimated, maybe some do, but they never did. Books can be cheaper, meal plans, expense money, etc. We saved money by not taking the health insurance (700.00 off there) becuase our Blue Cross was more than adequate. I think at HC, the meal plans are the same money, just how you want to divide it, one place or more dining dollars to use in other dining areas. You wont have some freshman expenses after the first year on your bill which helps.
We did the 10 month payment plan which helped us, same amount, but spread out, paying it all at once was not doable and it kept us from taking a loan. If they like that option, even if they take a loan, the FA office can give them information, if it wasn’t in your packet.</p>
<p>“once I start my career of being a pharmacist”</p>
<p>Somehow I missed this earlier, but you do need to take the cost of pharmacy school into consideration. If you have a bunch of debt from your undergrad degree to add onto your debt from the pharmacy degree, you can end up with more debt than you are able to handle. Knowing pharmacy school is in your future may mean that you want to go to a cheaper undergraduate college.</p>
I’m new to this and so are my parents, so this is … brutal now that I’m seeing the numbers add up.</p>