Ok I may be dense but this doesn’t make sense to me at all.
So student says the EFC is $30k with the savings assessed as his asset, but would be $20k without it.
He also says that parents won’t pay anything and that he doesn’t want big loans because of grad school later.
If you spent the money and then the EFC is $20k that would be the minimum you would pay, correct? How would you pay that with no savings and only a student loan of $5,500?
If you don’t spend the money the EFC is $30k, but you would have about $12.5 k per year of savings and $5.5k of loan.
The balance in savings will go down every year and loan amount up by $1 k as well.
If you put money in 529 before filing FAFSA the EFC is $22,800 the first year, less every year after that if you spend $12,500 on school per year.
You alone can only take $5,500 to $7,500 a year with loans and then you would have $12,500 a year to spend from savings. That’s $18,000-$20,000. That’s your budget. You will need to find a school with that net price.
So keep your savings in a 529 and use it to help pay for college if your parents won’t help.
Your best option for your situation would be to attend a school where you could get a full tuition merit scholarship, then you could pay room and board from your savings, most likely without loans.You might need to work in the summer to have money for books, travel and personal expenses.
It doesn’t sound like your parents are willing to pay $20-30k, if that is the EFC they would be expected to pay that much, if not more.
Right - whether the EFC is $20k or $30k at a $60k school doesn’t matter if the student and his parents are willing to pay zero. A $60k private school is unaffordable.
And what school is this that guarantees to meet FAFSA EFC need? There are not many, if any at all.
Cars lose value like crazy, so this idea is daft (and you won’t use that car in college likely anyway). Use the savings account to pay part of whatever your actual cost of attendance ends up being. As someone pointed out, this can let you avoid loans and you will have some money left. If you can’t follow the logic of keeping 80% of the money … you need to study before college…
And if your parents aren’t contributing, you need to look at low cost options like state schools and merit aid. Sorry, it’s their prerogative to pay or not pay. And if somehow you have amassed $40K, it is likely that they have been subsidizing more than almost any one else’s parents, so maybe give them some credit …
Rather than pay Russian roulette with your education, you need to apply to some schools that you can afford on any terms, whether you get FA or not. Let’s say you go to a state school with $25K COA, you have $50K in savings, you could work summers and make say $20K, so you could graduate with a manageable $30K of debt and have a fine education (and maybe mommy and daddy will help you pay that $30K). At that point, you should be employable and have the start of a nice life.
Many parents do not want to pay their EFC, get over with it, make a real financial plan, and get that college education. You can make your kids some nice 529s … but you will see why many people can or will not do that once you run your own household.
Put 2015 earnings up to $5500 in a Roth IRA before you file FAFSA and before April 15, 2016 and it won’t be counted as an asset at all for FAFSA purposes.
NC State is $22K a year x 4 and you have $50K in the bank. You can be an RA or work summers. Student loans aren’t a horrible thing if you keep to the $5500 type numbers per year and avoid private loans (likely not cosigned anyway). Hey, your parents might even cough up some money if you have a plan that does not involve financial distress for them or yourself.
You may have some good commuting options or could start out in a CC and transfer. Your profile is a bit high, but that means there is absolutely nothing that will slow you down in the option, including using your AP credits to maybe keep CC down to one year instead of two, you may be able to graduate with only 2x NCState costs.
I see you worked a lot for your grandfather, maybe that is the source of your other $20K too. To cut your parents a break, apparently they did not ask for one dime of that money, likely because they think you will use that for college.
You can apply to some reach schools and hope they can bring COA down to $30K but that means more money to scrounge up.
There are other merit options, like Bama that seem perfect for you too.
Trying to optimize rare FA money is a lost cause. You can use 529s or IRAs, but they will have penalties if you do not follow all the rules exactly. For example, once you put the $50K in a 529, you can only use that money for education, not the startup you dream up junior year…
Thank you guys for all of your help. I’m going to look into a 529 and see if that it is the right option. I wasn’t aware that I could still move it from a savings account and not have it assessed at the 20% rate which is what made me think I needed to spend it. Also, as a previous poster pointed out, the car is a bad idea since it will lose value quickly. I’m not going to apply to any schools early decision because I don’t want to be locked in if the EFC is too high. I’m also thinking about applying to some schools that would give good merit aid like some of you guys suggested as well as cheap state schools like UNC-W. Hopefully, I can get some serious scholarships which I have been applying to like crazy which would make private schools more realistic… I’m realizing my dreams of going to a great school may not be so realistic if I can’t get my financial situation sorted out but I hope that I can. Thanks!
Also. @BrownParent I am a graduating high school senior living with my mother who has an income around 80,000. My Dad has an income of around 100,000+ but from what I understand I don’t have to list him since my parents are divorced. Also, my income was about 12,000 in 2014. How does this work on the financial aid forms?
Tyler- your savings don’t get “assessed”. You are in a position to pay out of your savings, vs. a kid who has no financial cushion whatsoever. The college doesn’t go to your bank account and vacuum out the contents- it merely asks for a snapshot of your financial resources, and then figures out how much money you will get from them. How you choose to finance the balance is up to you.
You do not have to include your father’s income or assets on the FAFSA, but some of the ‘great schools’ you might be thinking of may require the CSS to be filed, and some of those schools may include his income/assets when calculating your need based aid.
At $80k in parental income, you might qualify for some federal aid if there are other circumstances (multiple student in college? medical expenses?) but probably not. If you are applying to schools that don’t guarantee to meet need, it probably won’t matter much if your EFC is $20k or $30k - you’ll get no Pell, you’ll qualify for the Stafford $5500 loan (may or may not be subsidized depending on the COA for the school), and you’ll be gapped for the difference between EFC and COA.
Your 2014 income won’t matter, but your 2015 will. If you earn $12000 in 2015, the first ~$6300 will be excluded from consideration on FAFSA when figuring your EFC, but the additional ~$5700 will figure into your EFC, so even if it is no longer an asset (spent or invested in a 529 or other retirement vehicle), you will still take a hit. However, it is not a 100% hit, so earning the money is still better than not earning it!
Tyler, you seem to have good financial sense and good for you for looking into costs ahead of time and searching for merit.
If you make another thread detailing your stats, family income, career goal and such I’m sure you can get some suggestions from knowledgable posters here for good places to apply to.
So as has been pointed out 2015 income is the relevant number for students’ applying for the 2016-17 school year. And assets are reported the day of filing. And usually you will have to use NCP info for private expensive schools. Not always though.
OP needs to bone up on finaid and how it works. If you want a private 60k college, at a reasonable cost, you have to understand the basics and what your targets look at, not assume any one piece of info you happen across is necessarily accurate. As an applying senior, the CSS Profile colleges can look at 2014, then the info for 2015 and a projection for 2016. That’s both parent and student. And, depending on the college, your father’s income may indeed be considered. If you’re trying to come up with a reasonable strategy, it’s important to understand the range of factors, then what your specific targets say, on their finaid pages.
@tyler1127, pick a college you’re really interested in and call the financial aid office. Have a list of questions and take some notes! I’ve done this several times and it’s been invaluable. They answer questions all of the time. Be sure to mention that your parents are divorced – I’d be surprised if they didn’t care about a non-custodial parent’s income.
Remember that they’re people. If you complain that you don’t want to spend your 50k on college and want them to give you free $ instead, it won’t go over well. They also speak with people who are wondering where their next meals are coming from. However, if, in the course of conversation, you ask for advice on how to be most efficient with all of the savings you’ve saved from working long hours throughout high school, so that you can afford all four years, you’ll probably get some seriously good advice.
