In dire need of some financial advice!

Paying for College
1

<p>Here is my situation. My oldest son will be graduating this year. We have done some college tours over the summer and he has narrowed down his schools of choice to Penn State and Pitt. My wife and I have never really made a lot of money. She was a stay at home mom for most of the time.And now she has entered back into the work force since my youngest son has gone to Junior Highschool this year.My wife and I never went to college so this whole thing is new to us.</p>

<p>Our combined income is about 80,000 net a year. We have never been able to save a ton of money and we have lived paycheck to paycheck. Over the last 2 years we have paid down most of our debt to the point we can now start saving roughly 500 to 800 a month. Its not a lot but its a start.</p>

<p>So I started checking into the costs of Pitt and Penn State to see what exactly its going to cost to send him there. I did the calculations and they say my EFC is 13,000. Now if I am doing the math correctly this amounts to 52,000 is what we are expected to pay. After all that he still will have to pay 25,000 in loans.</p>

<p>My son is very bright and he has challenged himself in his Sophmore and Junior years making honor role every marking period. He has taken honors classes and AP classes. He has not slacked off his senior year at all taking 2 more AP classes and honors classes. Because he didn't do so well in his freshman year his GPA is 3.4. He didnt take school seriously in 9th grade otherwise his GPA would probably be a bit higher. He took his SAT's and he got an 1910. He is a band kid and plays in the Marching band, Jazz Band, and Indoor drumline.</p>

<p>This is why he wants to go to Pitt or Penn State because they offer great musical programs as well as a solid education. He is interested in engineering or some kind of science degree. He has not narrowed down any further than that because he just doesn't know what he wants to do, all he knows is he loves science.</p>

<p>So here is my dillema. First the shock of 52,000 is unbelievable to me. I realized school would be expensive but how in the world does anyone in the middle class pay this kind of money. I obviously do not want to let my son down because he has made a huge effort in school to get good grades. Am I doing the math correctly for these two schools first of all?</p>

<p>Will he qualify for any additional aid, grants or scholarships?</p>

<p>My youngest son is autistic and has been documented by the state as having a disability. Fortunatley for us he is high functioning but that still does not take away from the fact he will always need some assistance in his life and it is very doubtful that he could ever live on his own. Will any of this help our cause of trying to get my older son into Pitt or Penn State and not go financially broke doing so?</p>

<p>I just need some really good advice because I am very concerned at this point. Any help would be very much appreciated.</p>

<p>Thanks in advance!</p>

2

<p>One quick correction our income is 80,000 gross… I wish it was net!!!</p>

3

<p>Maybe a direct plus loan…if you are clearing 500-800 a month your payment should be easily below that, but cutting it close. Best bet is to take a hour and call up both schools and talk to a advisor…they want u to call…</p>

4

<p>^^^
Sorry, but that’s not good advice. Calling the schools isn’t going to help. And, taking out Plus Loans is not a good idea either.</p>

<p>Did you use the Net Price Calculators on each school’s website? If not, do so.</p>

<p>Just because a student works hard for his grades doesn’t mean that his parents have to pay an amount that they can’t afford. Even if your son was a 4.0 student with a 2200 SAT, you wouldn’t be under any such obligation. </p>

<p>FYI…students are SUPPOSED to work hard in high school. That doesn’t create a right to an expensive education.</p>

<p>MOST students in the USA do NOT go away to college. Most commute to their local CC or state school because their parents can’t afford much. </p>

<p>Neither UPitt nor Penn State “meet need”, and neither give much aid. IF you used a FAFSA calculator, then that may tell you your FAFSA EFC, but that’s not going to tell you what UPitt nor PSU expect you to pay. You need to use the NPC on each school’s website. </p>

<p>Your income is beyond qualifying for Pell with one student in college. I doubt you’d get any “free money” from either school. Neither is going to give you more aid because you have a child that you may have to support into adulthood. If that child is currently costing you huge amounts of medical bills that aren’t covered by insurance, then you’d have to show those paid bills, and maybe your EFC would drop some. But, simply stating that the younger child will need support during his adulthood will not make a difference. </p>

<p>If you can’t afford what UPitt or PSU expect you to pay, then that’s that. You’re in the same boat as most Americans…whose kids commute to college.</p>

5

<p>I assume Pennsylvania is your home state? Unfortunately the two colleges you mention are quite expensive even for in-state students. You didn’t like the sound of the FAFSA EFC, but at those schools you would likely be expected to pay more than that.</p>

<p>What is your son’s SAT score without the writing part, i.e. Critical Reading + Math?</p>

6

<p>Bob is exactly right. Those schools will likely expect you to pay more…significantly more…than what you estimated. </p>

<p>*he has narrowed down his schools of choice to Penn State and Pitt. *</p>

<p>It is too early to “narrow down his school” to only two schools…especially when you are not likely able to afford them. </p>

<p>What is the PA state school that he can commute to? He needs to include that school on his list…he may get some merit there…and he can save on R&B costs.</p>

<p>And frankly, when cost is a serious issue, the only choices should not be schools where your net cost will likely be more than what you can pay.</p>

<p>What are his financial safety schools? These are 1-3 schools on his list that you know FOR SURE that you have all costs covered.</p>

<p>Tip…you say that you’re now saving $500-800 per month. So that doesn’t mean that you could spend that much towards college instead because over a 4 year period, your family will have several unexpected financial expenses where some of that money will be needed: dental bills, appliance repair/replacement, car repairs, car replacement, home repair, etc. </p>

<p>Realistically, you may only be able to contribute about $200 per month towards college…or about $2k -3k per year. Your son can borrow $5500. Over the summer, he can work and save about $2k. During the school year he can earn about $2k to put towards “daily expenses”. </p>

<p>So, unless he gets merit money, he may only have about $12k to put towards college costs and personal expenses.</p>

7

<p>Not sure if you realize that FAFSA EFC is a misnomer. It is NOT the amount that you have to pay. Schools do NOT have to give you aid to make up the rest of the cost. EFC is just a number to see if you qualify for any federal aid…which isn’t much aid at all.</p>

<p>EFC is confusing. People often mistakenly think that’s what they have to pay and make their choices based on that…only to find out too late that the schools aren’t going to give them aid for the rest of the cost.</p>

<p>I put in your EFC into the Penn State Net Price Calculator.</p>

<p>Listed below is the information you entered:</p>

<p>Residency: PA
Campus: * University Park Campus
Dependency Status: Dependent
Housing: On Campus
FAFSA EFC: $13,000</p>

<p>Estimated Cost of Attendance for 2013-14
Tuition And Fees $16,992
Room And Meals $10,116
Books and Supplies $1,696
Transportation $1,566
Miscellaneous $3,222
Total Cost $33,592</p>

<p>Need Calculation for 2013-14
Cost of Attendance: $33,592
Expected Family Contribution (EFC) - $13,000
Total Need $20,592</p>

<p>Net Cost Summary for 2013-14
Cost of Attendance: $33,592
Total ESTIMATED Scholarship and Grant Aid - $3,991
ESTIMATED Net Cost $29,601</p>

<p>Other Potential Types of Aid:
Total **Total Estimated Student Loan $5,500
**</p>

<h2>*Potential Parent PLUS Loan $24,101</h2>

<p>Total Potential Other Types of [loan] Aid $29,601</p>

<p>*Parents of dependent students may qualify to borrow a Federal Parent PLUS loan to cover the net cost not met by grants and scholarships. Parents are also able to borrow the parent loan to cover the cost of their expected family contribution. Visit studentaid.psu.edu for more information on the Parent PLUS Loan Program.</p>

<p>As you can see from the above, you would be expected to pay $24,000 per year at Penn State (the UPitt numbers will be similar). They’re expecting you to pay or take a loan for that amount. That would mean borrowing a very large amount.</p>

<p>As you can see, the only “free money” you’d be given is about $4k towards the entire cost of PSU…which is about $35k. The rest is expected to paid for by you and your child.</p>

<p>As awful as this news may likely be, be glad that you’re getting it NOW, and not next spring when it’s too late to apply elsewhere. </p>

<p>You need to sit your son down NOW and explain that you can’t pay the amounts that these schools will expect you to pay and that you’ll have to find other schools.</p>

<p>What is his likely major?</p>

<p>What is his Math + CR SAT?</p>

8

<p>Run the Net Price Calculators for each school. This will give you a good estimate of potential aid.</p>

<p>$52,000 for FOUR years of college is not costly in the big scheme of things considering the total cost is well over $120,000 for four years. Of course, that is IF that is all you actually will be paying. Neither Pitt or PSU meet full need, and as noted are costly. </p>

<p>Does your son have two safety schools also…ones where he would be happy to attend, is guaranteed acceptance, and is financially affordable? If not, work on those.</p>

9

<p>Thanks everyone for the advice. Those are all good questions. I do not know the answer to the SAT information without the writting but I will find out tonight when I get home.</p>

<p>As for the calculations Mom2collegekids provided, thats the exact figures I got and thats when the shock sunk in :)</p>

<p>The 500-800 dollars is in addition to other savings I am able to make since our debt has been considerably paid off. I may be able to save additional money before he would start next fall but not much.</p>

<p>While I understand in the grand scheme of things that 52k is not that much money for the type of education he would be getting. And my own mistakes for not saving as much money as I could is my own fault. Make no mistake I am not making excuses for myself at all.</p>

<p>However I am looking and exploring any avenue I can to help my son achieve his dream and that is what a parent is supposed to do. He will share some of the costs for his education because I firmly believe he should have some skin in the game. This will insure he keeps his head in the books and feels a sense of responsibility for his own future.</p>

<p>Now back to the money. Lets say my wife and I feel based on what we could save is about 500 consistently that we could put towards his education. Lets also assume that the split would in fact be 50k for my wife and I and the rest would be his to be paid back after he graduates.</p>

<p>Can anyone here with experience tell me what kind of options I would have to take on that debt? What kind of payments would this entail? Is it possible to fund it based on the background I gave and the kind of numbers Mom2collge kids gave out?</p>

<p>Again everyone I appreciate your help with all of this because I really want to explore every possible avenue to help him with his number one choice before we have to resort to looking at other schools.</p>

10

<p>You could apply for a Parent Plus loan. If you take a $50,000 in loans over the four years, your repayment will be about $600 a month. If your so takes the max Direct Loan, his repayment on that $28,000 or so, his repayment will be about $300 a month…or so. Both for ten years.</p>

<p>Here is another option…can your son go to one of the less costly Penn State campuses for two years and then transfer to the main campus for his final two years? That could save you some money.</p>

<p>Is your son ONLY applying to these two colleges? What will,happen if they really are not affordable? Please help him find some less costly options to add to his application list.</p>

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<p>So, you’re thinking that you’ll pay $12k per year, and that your child will BORROW $12k per year? That still isn’t going to cover the family’s share to PSU.</p>

<p>PSU is expecting you to pay ALL costs except for about $4k. So, your family will have to pay about $30k per year. </p>

<p>Your child can only borrow the following amounts without co-signers:</p>

<p>$5500 frosh
$6500 soph
$7500 jr
$7500 sr</p>

<p>So, are you saying that you’ll borrow about $6k per year towards YOUR contribution…and you’ll co-sign about $6k per year towards your son’s add’l loans? What will pay for the rest of the costs???</p>

<p>Also, keep in mind that costs go up every year, so add a few thousand to each year. </p>

<p>Your son would have about $60k in debt when he graduates and you’ll have about $25k in debt (do you have other children to put thru college? If so, then you’ll be still paying back THAT debt when the younger one(s) go to college. That could interfere with their choices/needs.)</p>

<p>Your son’s debt would be TWICE the recommended amounts. He’d have to have a VERY high paying job as a newish grad in order to afford THOSE payments AND pay for his own living expenses. Do not count on his ability to live at home and commute to his job to pay back his debt. His job may not be near your home, and/or he may be in a relationship at that point and not want to live at home.</p>

<p>What is your son’s career goal and how much will he be earning upon graduation?</p>

12

<p>While I understand in the grand scheme of things that 52k is not that much money for the type of education he would be getting</p>

<p>I’m confused. The $52 is the FAFSA EFC, which means almost nothing. YOUR FAMILY would be expected to pay about $120k…not $52k.</p>

<p>his GPA is 3.4. He didnt take school seriously in 9th grade otherwise his GPA would probably be a bit higher. He took his SAT’s and he got an 1910</p>

<p>I’m going to be honest with you, so pardon the bluntness. Neither parent went to college, so I imagine that you’re very proud that your son will be going. However, do not let that excitement blind you into making a decision that could really backfire on you financially. Your son’s stats are good, but they’re not phenomenal and they’re not worth all of this debt. </p>

<p>There are VERY few careers that require a “top school” education. And, while PSU and UPitt are very good schools, they don’t meet that criteria anyway. </p>

<p>What is your son’s major?</p>

13

<p>If the school costs $33,000 a year…subtract $5500 Direct Loan from that amount…and that is the amount you COULD be looking at paying for freshman year alone.</p>

<p>The PA regional campuses are well worth looking into.</p>

14

<p>Are you in state for those schools? If not, what is your home state? Where are you getting that $52K figure? Is that over 4 years? </p>

<p>As others have said, the EFC is not what you can depend on having to pay. That is the LEAST amount you will be paying and still get federal aid. You make too much for PELL, I think, so the only entitlement in terms of aid that your son can be sure to get is the subsidized Direct Student loan in $3500 freshman year, and $2K unsubsidized for a total of $5500k in loans in his name. You can run NPCs for the two schools for some AVERAGE idea of what you might be expected to pay, but the fact of the matter is that neither school meets full need for most of their kids, and getting merit money is very difficult and is like entering a lottery. Doubtful he will get much. </p>

<p>What are his stats, like test scores and grades, and types of courses taken? Those will directly determine eligibility for scholarships. Finding schools where he is a top notch candidate is how one increases the chances fo an award.</p>

<p>The alternative is , as THumper suggests, looking at some satelite or smaler state colleges, maybe within commuting range for the first two years and cutting down on costs that way. Your son should certainly include some such options. I tell this story all of the time, how my son thought that was a horrible thing when he was a senior, and now more than two years along the way, he sees a lot of happy successful kids who did just that.</p>

<p>Take a look at some Catholic and private schools that might be better deals in term of meet financial need and giving out merit. WIthout academic stats, it’s diffiuclt to come up with suggestions. For example, Albright College meets need defined by EFC, excluiding discretionary expenses (travel, books, sundries) which is a great deal. Or they used to. Things change very quickly in this area.
My DH has a colleague whose daughter graduated from Temple in the honors college and she got a nice chunk of change and loved the experience. Lasalle is a Philly Catholic school that has been generous to students I know, as has Scranton. </p>

<p>When my son had his acceptances in an array in front of him some years agoe, they ranged from free tuition from a local Catholic school if he lived at home, to $60K full cost. With variations all in between. By picking different possiblilites, so can your son have such choices. You eliminate what’s not affordable and pick from what is doable. </p>

<p>If you can come up with $6K a year for your son out of current income, and decide to borrow an equal amount, and have your son work summers and during the year for about that amount and borrow his direct loans amounts, you are looking at about $24K ayear that you .between the two of you, can afford for college. That means unless Pitt or Penns state comes up with about $6K a year, it’s not affordable for your son to go there, just going the way it usually is for families at that income bracket. I say this because the on paper expenses rarely work out. Things always come up. Insurance rates go up, house repairs, car repairs needed, a root canal for a tooth needed. things happen at school, and you have another child at home, to boot. So you don’t want to put yourself in financial corner. People do,and it’s a long hard haul getting out. YOu think it’s hard paying for college while it is an “in your face” thing with your kid going there? It’s is a bitter pill paying for it once he’s out, for both of you. But with a reasonable, doable nut, you’d be in good company, not bad. </p>

<p>Also check out Duquesne University. They offered my son a nice scholarship, but he was OOS, and they wanted the diversity that would have brought, but give it a go, along with other school. Again, look for schols in particular where he would be a top student for the best chances of money.</p>

15

<p>Above, I meant to write: I’m confused. The $52 is the FAFSA EFC combined over 4 years, which means almost nothing. YOUR FAMILY would be expected to pay about $120k…not $52k.</p>

<p>I know the dad is shocked over his FAFSA EFC…about $13k per year. I’m not sure if he understands that PSU and UPitt will expect his to pay over twice that per year.</p>

<p>PA is a “bad state” for finding affordable schools. If the dad knows the son’s major and career goals (and his M+CR), we could probably come up with better choices.</p>

16

<p>Have you looked into any of the PASSHE schools - perhaps he could attend there for 2 years and get some of the general requirements out of the way. My DD attends Slippery Rock and while they do not have engineering he could still as I said take general ed classes. SRU is considerably less than any of our in-state schools in Ohio. And they are even less than that for in-state students.</p>

17

<p>I want to add that my cousin;s son is at PItt, as an instater. Their income is similar to yours, though he is an only child. They had no money saved for college. Pitt gave the young man a $5K grant, and he took out the $5500 in loan entitlements from direct loan, and he works for another $5K a year. That parents pay out about half of what’s left and half they borrow. </p>

<p>One nice thing about Pitt is that one can live off campus rather inexpensively with a room share after freshman year, if the student is frugal and determined to find cheap housing and can feed himself decently on his own. You can “beat” the room and board prices somewhat thaty way, though leases are typically for 12 months and there are utilities and other expenses that come with living off campus. My son currently pays $400 a month total-for rent/util-shares a bedroom in an off campus apartment with some guys, He has his food costs down to a very low amount, and he works 15 hours a week. My other sons did pretty much the same as they went to school in areas where cheap student housing was avaialble and they were frugal. BUt that is a gamble. Ironically, my cousin’s son at Pitt, though the family is tight on funds, wanted to live with a well heeled group of friends, so he is paying double for room and board that my son is. It’s important to him so his parents are going a long with it and borrowing. But my son right now, and my SIL’s niece are both costing respective parents nothing in room and board costs as they are working and coviering every cent of those. My son is doing so without a loans since we are paying his tution and transportation expenses in full as well as some money here and there, but in the hundreds of dollars range, not thousands in terms of handouts.</p>

18

<p>If you believe that you can pay $500 each month toward college, create a separate savings account for that now, and put the money there each month. You will learn pretty quickly whether or not your estimate is accurate. And, you will have something sitting in the bank next fall when that first tuition payment comes due.</p>

<p>We had no college savings until January of our kid’s senior year. But by stashing away $500 each month (yup that was our figure too!) we had fall tuition ready for the community college when September rolled around.</p>

19

<p>I want to thank everyone for assisting me with these numbers because it is all very confusing. Yes we are in state and the calucualations mom2collegekids came up with are the exact numbers I am seeing. </p>

<p>I do see one mistake I made and Mom2collegekids cleared that up. For some reason I was thinking our estimated costs were 80K total and I will be willing to pony up 50k of that money and I would have my son pony up the remaining 30k. But based on the numbers I am now seeing it appears we are more likely up to 100k total.</p>

<p>Seriously is this right? I mean how can this even be possible? This looks down right ridiculous, I cant see how anyone can afford those prices. I was screaming about the 80k before but now its actually even higher.</p>

<p>Also I thank you for the bluntness and though his stats are not phenomenal, I know his potential greater. I realize most parents may want to send thier kids to an out of reach school and obviously many on here may have heard this same story before.</p>

<p>Again this is me exploring every single avenue to see what is possible and what is not. Like all parents that give a damn you want to try your best to give them every opportunity to succeed in life.</p>

<p>If he cant attend one of these schools we will certainly have to look for other schools to fall back on. We are also going to look at West Chester University. But according to my estimates thats not saving us a ton of money.</p>

<p>As for a branch campus, I have made that suggestion several times and I think he is open to it if there is no other way. The main issue here is he is musically gifted and he loves to play. He is a student leader at school for music. A section leader in marching band and indoor drumline. </p>

<p>Obviously his dream is to play in the Blue band at Penn State or play In Pitts Marching Band. So being at a branch campus does not give him that opportunity which is why I am here today asking for advice and any options that I may want to look into to help my son make it possible.</p>

20

<p>I agree fully with Happymom. Also your kid should contribute what he can to that fund (put it in either a 529 or an account in YOUR name) Having $6K sitting there will make things all the more easy.</p>