Impact of ParentPlus application

Paying for College
1

<p>My apologies in advance if this is confusing....</p>

<p>My D received a very generous scholarship as well as an achievement grant from her university. She is also taking out the standard $5,500 in first year student loans. In this case, generous means her resulting COA will be about $5k less than our FAFSA EFC for her first year. I really, really need this to not get screwed up.</p>

<p>My ex is responsible for half her college costs per our divorce decree. He says he is broke, and (in a cover letter only) his lawyer says he has filed bankruptcy. I haven't verified this because I would need a Pacer account and would have to pay for the search, but I don't think it's necessary. I don't care if it doesn't affect my D. He is notoriously irresponsible, so I don't doubt it.</p>

<p>I sent him the Fall bill as soon as it arrived and told him the date on which I intend to pay it. He has already said he can't come up with the money. We chose the school knowing that I would have to front the payments and would likely have to pursue him legally for reimbursement, so I am prepared to pay it next week. He has been missing in action through the whole college application process (not to mention the past 17 years), and doesn't know the first thing about financial aid. He didn't go to college himself, nor did his siblings.</p>

<p>When we accepted/declined my D's Scholarship and FinAid package, I declined the ParentPlus that was offered. Last week, he applied for a Plus loan through D's school. I can see the dollar amount pending on her account (it is for more than his share of the costs, incidentally) and a To Do item for him to sign a MPN. </p>

<p>With that background, here are my questions:</p>

<p>~ If he truly filed bankruptcy, I assume he'll be denied Plus. Correct? Is there any circumstance under which he could be approved? </p>

<p>~ Is it correct that his wife can not be the Plus applicant if he is non-custodial and she has not adopted my D? As if this couldn't get any more demented, his wife has the same name as me, spelled the same. (I couldn't make this stuff up if I tried). But she could conceivably be his co-signer if she was not part of his bankruptcy, correct?</p>

<p>~ If he is somehow approved and I have already paid the Fall bill, what happens? Does he get a check?</p>

<p>~ How quickly does he find out if he is approved or denied, and does he have to sign the MPN before the review process begins, or after he knows he has been approved? </p>

<p>~ I suspect he has applied knowing he will be denied, and knowing that my D will be offered an additional $4,000 loan. I suspect this because he MUST have talked to someone in financial aid or he wouldn't know the first thing about Plus loans. If he was told that this would be the case, he will likely take the denial and try to force my D to take more loans. NO WAY will she be doing this. </p>

<p>~ D's school was FAFSA only, so at the moment only my financial information has been considered. Does anyone see anything about this situation that could cause her package to be re-evaluated? He must have had to apply for a FAFSA PIN in order to apply for the Plus loan, but he does not appear anywhere on D's FAFSA. </p>

<p>This stuff, especially the last bullet, is keeping me awake at night. Any insight would be greatly appreciated.</p>

2

<p>

Most likely he could not secure and endorser. See [FinAid</a> | Answering Your Questions | Bankruptcy and Financial Aid](<a href=“http://www.finaid.org/questions/bankruptcy.phtml]FinAid”>http://www.finaid.org/questions/bankruptcy.phtml)

</p>

3

<p>It is possible that he could be approved for the PLUS loan, even if he is in bankruptcy. I have seen it happen.</p>

<p>If he is a parent, he can apply for the Parent PLUS on behalf of his child; his name does not have to be on the FAFSA. Step-parents are eligible to borrow under the PLUS Loan program if the student is a member of the step-parent’s household, and the step-parent’s income and assets would be considered if the student files a FAFSA … so your ex’s spouse cannot apply for a Parent PLUS on your child’s behalf. </p>

<p>If he is approved for a PLUS loan, he will get the money … the fact that you have already paid is not relevant. Only eligibility for aid is relevant. He will know within a very short time if he is approved (a day or two).</p>

<p>Talk to your D. She absolutely does NOT have to take out additional unsub just because your ex gets denied a PLUS. It “allows” her to do so, but SHE is the one who chooses whether or not she will accept that additional amount.</p>

4

<p>Thanks, 4kids and kelsmom. What you said has confirmed my general understanding and research. And yes, I have talked to my D just in case he contacts her and she has no intention of taking out additional loans. She is upset at the thought of it, but I have assured her that she has done her part 1) by working to earn an agreed amount of money to contribute and 2) by taking her $5,500 student loans. If my ex doesn’t come up with a nickel, the rest will be my problem.</p>

<p>I guess it is possible that the bankruptcy was limited to him as an individual and excluded his wife, who could then be his co-signer. That would be a good thing for me, so hopefully that is the case.</p>

<p>Does anyone see any way his actions to apply for Plus could have an adverse effect on my D’s university grant? The grant was called an Achievement Award and was separate from her merit scholarship.</p>

5

<p>In my experience, you are immediately told if you are approved for PLUS. If he is approved, the funds will go directly to the school, and anything over the amount needed to pay the direct billed items would be sent to the borrower, in this case, your ex. What concerns me is this: If you pay your daughter’s bill, and then the PLUS funds come rolling in, your ex has just taken out a loan for himself. That you paid the bill makes no differnce at all. He would get the money over and beyond the direct billed amounts unless he specifies that they get paid to your DD. I have seen some skullduggery done with PLUS this way.</p>

<p>I suggest you call the school, and find out if PLUS funds are on their way to your daughter’s account. If they are, let those funds get applied to the costs FIRST. Talk to financial aid and see how this is done. If you work this right, IF your ex is indeed approved, the money should go to whatever payments for the school, and your DD NOT have to take out any loans herself. If you can put a hold or cancel and make sure that his PLUS proceeds are used first, that would be the ideal. Otherwise what your ex can do, is get a loan for himself, pure and simple. I’ve seen it done.</p>

<p>If his PLUS funds can be applied directly to everything FIRST, that would be ideal. Fax a copy of the divorce decree showing that he is responsible for the costs and ask Fin Aid to help tap the PLUS first, and then the other funds, so that any excess can be released to your DD instead of to your Ex because other wise it is possible he pockets the amounts.</p>

6

<p>Kelsmom, I’m a little confused. The ex is not the custodial parent, so he would never be listed on the FAFSA. And he is not providing the support. So am I understanding this correctly…ANY parent can apply for a PLUS?</p>

<p>It’s step parents who cannot…so the wife of the ex would not be able to get the Plus because the kiddo did not reside with them, and they are not the family on the FAFSA?</p>

7

<p>I suggest you call the school, and find out if PLUS funds are on their way to your daughter’s account</p>

<hr>

<p>You may have to have your D call, depending on the school’s policies regarding discussion of aid with parents (since you are not the parent who requested the PLUS). </p>

<p>I do love the idea of getting the ex to pay via the PLUS!! The simplest way to do accomplish this feat is to hold off on completing payment until the PLUS proceeds are applied to D’s account (she can see this in her student portal, if the school has online access). Of course, my guess is that he would cancel the loan in this case …</p>

8

<p>The ex can get the PLUS … the ex’s spouse cannot, unless the ex completed the FAFSA.</p>

9

<p>Thanks, cpt, I have thought since last week that he would try to pocket at least some of the money based on the fact that he applied for an amount that is more than his share of the costs. </p>

<p>I had not however, thought that I would be allowed to intervene with FinAid when it comes to his funds. Gosh, I really don’t want to do that if I don’t have to. One thought is for me to immediately pay my share of the costs to the school, so that the balance due is exactly his share. In that case, he would receive a check for the difference, unless he instructs the school to disburse the funds to my D, right? He would never do that, so I suppose he would pocket the rest. </p>

<p>I’m a little worried that my D will have holds or other issues if I do not pay the bill that is due by next week (the due date is the first day of classes). If I did pay both our shares and he received a check for the loan proceeds, I do think he would reimburse me his share. As cpt says, there would be no guarantee. But I have made it pretty clear that I am not going to allow him to walk away from this obligation and would pursue him legally if he did not reimburse me.</p>

<p>Additional thoughts about me paying the bill in full instead of waiting to see what happens? What about me paying my share, leaving his share pending?</p>

<p>Thank you all - I’ve reached a point where I have so many “what ifs” running through my head I can’t think clearly.</p>

10

<p>But his spouse could be his co-signer, if she was excluded from the bankruptcy, right?</p>

<p>You are correct thumper and kelsmom, neither of them have ever completed a FAFSA, and my D has never lived with them.</p>

11

<p>Agree with the above - and crossing my fingers that Mr. Ex gets approved . . . and stuck with the bill! :D</p>

<p>The problem is, of course, that he does not have to sign the MPN until after he’s approved, so if he has any sense at all (clearly, a question that’s open to debate), he’ll just back out if he’s approved.</p>

<p>But best of luck . . . and here’s hoping he gets stuck with the bill!!!</p>

<p>P.S. In response to your last question, contact the financial aid office and/or school bursar and find out if you might be able to delay payment pending the results of ex’s PLUS application. They’re the only ones who can tell you.</p>

12

<p>Most schools are pretty good about waiting for the PLUS funds to dispense and not charging any late fees or reversing them if some are incurred. They will NOT chase after dispensed funds that the bursar’s office releases and alot of that is done automatically, so you will need the cooperation of the school to apply his PLUS money first and then your money and maybe your DD doesn’t even have to take out a loan. If you end up owing him money, you can put it in a 525 account for future payments or ask to prepay the next term, rather than sending it to him. It would be just so cool if you get him to pay via PLUS. Hopefully this was his plan all along, but unfortunately, I’ve seen people who have pocketed the money as private loans that they never otherwise could have gotten. Works well. Let the ex pay the whole thing, take out a loan so it looks like you paid, and then pocket the money when it turns out to be excess. It causes enough confusion that a sleepy tired judge just might not get what happened here, as he can show he paid. That’s where I have the concern.</p>

13

<p>“It would be just so cool if you get him to pay via PLUS. Hopefully this was his plan all along, but unfortunately, I’ve seen people who have pocketed the money as private loans that they never otherwise could have gotten. Works well.” </p>

<p>dodgersmom and cpt, thank you for your cheerleading on my behalf. :slight_smile: It really did make me smile despite my worry over this. </p>

<p>Just to be completely clear here, as much as I would like karma to bite him in the butt for once, I’m not out to do anything beyond getting him to fulfill an obligation. Call me weak for not taking advantage above and beyond, but I just don’t need any hassle from him if more than a penny of the bill is paid with his funds. I have a long established record of NOT being the jerk in all of this, so if we do have to go to court at some point my hands will be completely clean. Practically sterile, and I plan to keep it that way. My daughters (albeit 21 and 18 now and not little kids) are watching and learning from all of this.</p>

<p>The more we discuss this, the more I think maybe I should pay only my share of the bill next week, and leave his share unpaid for the pending Plus funds. If he gets approved and gets a check for the excess, so be it. If my D runs into problems because her bill is not paid, in the worst case I could pay his portion of the bill and I’m right back to where I expected to be - trying to get it out of him.</p>

<p>What do y’all think?</p>

14

<p>

I don’t think so. See [FinAid</a> | Financial Aid Applications | Award Letters](<a href=“http://www.finaid.org/fafsa/awardletters.phtml]FinAid”>http://www.finaid.org/fafsa/awardletters.phtml)

So why would they decrease the aid if you’re getting more loans?</p>

15

<p>

529 account?</p>

16

<p>"So why would they decrease the aid if you’re getting more loans? "</p>

<p>I don’t know - because they can?</p>

<p>I’m probably just paranoid, but since he has been completely absent up until now, I’m just worried that another checkbook in the picture (albeit an empty one unless he gets this loan) could cause D’s package to be re-evaluated. Tell me I’m paranoid.</p>

17

<p>

Contact the school to make sure.</p>

18

<p>

</p>

<p>Yes, in this case, you are being paranoid. :)</p>

<p>Your daughter’s 2013-14 financial aid package was determined by the FAFSA you filed last January (or thereabouts). It is not subject to reevaluation mid-year unless (a) a parent’s financial situation changes drastically for the worse and the student begs for more aid; or (b) a verification of the family’s tax returns shows that the figures reported on the FAFSA were wrong.</p>

<p>Also, since the noncustodial parent’s finances are NOT taken into account on FAFSA, your ex’s actions shouldn’t make a darned bit of difference anyway!</p>

<p>Regarding your plan to pay half and then just “wait and see” . . . I’d strongly urge you to check with the college before you do this. There could be consequences if the bill isn’t paid in full by the due date, and a quick phone call might be enough to stay those consequences until the PLUS results are in. (Remember, you’re not just waiting to see if he’s approved or not; he also has to execute and submit the MPN . . . which he may decide not to do.)</p>

<p>Also, if this bill is for first semester only, you might consider letting him pay it in full, and then pay the next semester’s bill yourself.</p>

<p>As cptofthehouse pointed out above, once Mr. Ex has borrowed the full amount, and has documentation to prove it (along with a loan contract stating that all funds MUST be used for the student’s expenses), as well as documentation from the school showing that the bill was paid in full, you might have a very difficult time convincing a judge that he didn’t pay the entire amount. So my advice would be to let him pay it, and you pay the next time.</p>

<p>As you suggested yourself, it’s unlikely to get that far. Either he’ll not be approved, or he’ll refuse to take out the loan . . . but you never know.</p>

<p>Meanwhile, eat ice cream . . . I find it works very well to relieve stress in situations like this. ;)</p>

19

<p>dodgersmom, bless your heart. :slight_smile: And I’m all about ice cream.</p>

<p>Just one problem with the let him pay Fall and I’ll pay Spring idea - my D’s account shows the proposed Plus loan split into Fall and Spring portions, just like the student loans do. Again, both are for amounts greater than what will be his “share” of the costs per semester, but whatever.</p>

20

<p>Just logged into my D’s account, and I assume he has been approved because it says the loans (part Fall, part Spring) are “accepted”, but he has not yet signed the MPN as it is still a To Do item.</p>