Middle to Upper Middle Class - How Do You Afford College?

Paying for College
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<p>Hello. Reading these posts has gotten me quite depressed. I am a single mom, single my whole life, now age 50. Supported myself since I was 18, and it was VERY difficult at times. Put myself through secretarial school (big $$ for me) and have worked 2,3 jobs at the same time to pay rent, car payments, Life in NJ.<br>
My son is a freshman in high school, and because I finally make a halfway decent salary, the EFC figure which came up on an online calculator was over $8,000 for me, even though I have NO savings of any kind. I’ve been paying off $20,000 of laywer debt (due to his father suing me for full custody after he married his girlfriend). Still paying - finally down to about $14,000 on the 6 credit cards I used to pay my lawyer. BTW - I won and we retain equal 50% - 50% custody. I do not receive any child support. Only did for 2 years when child was very young. </p>

<p>I have only $5,000 currently saved in a 401K for my retirement. And I am age 50. THIS IS SCAREY. I got a part time job that allows me to stay home the days my son lives with me. It’s the ONLY part time employer I could find that allows this. They lay me off a lot, then call me back, for project work. But they only pay $10 per hour. Every little bit helps. </p>

<p>I fear that his father will try to sue me in court to pay half of our son’s college. I just don’t have any money. I have no idea how much money his father has to give him. Probably some, but he does take an awful lot of vacations.
I am afraid I will foreclose on my little condo. I purchased my condo with all the money I had saved for retirement. But I’ve managed to save $5,000 through work. </p>

<p>My son has to be age 24 to be considered “independent” so he cannot get any financial aide until he is 24. I am supposed to come up with over $8,000 every year to give him? How? I need to keep paying down the card debt I have. I have to retire. I just cannot do this!!</p>

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<p>I fear that his father will try to sue me in court to pay half of our son’s college. I just don’t have any money.</p>

<p>He can’t do that. You were never married to him, therefore there was never any divorce which would have made such a stipulation. And, good heavens, this is a person who got off lucky not paying much child support!</p>

<p>As for your son…you have some options.</p>

<p>1) he can start at a community college, get good grades, and then transfer to a local university that he can commute to. He can take out Stafford student loans if necessary.</p>

<p>2) Your son can work in summer to help pay for his college expenses. He can probably get work-study to help pay for his college costs during the school year. Encourage him to get a part-time job when he’s 16 to help pay for some of his expenses while in high school. That will help free up your money to pay down your credit cards.</p>

<p>3) Your son can get high grades in high school, do well on his SAT/ACT, and get merit scholarships. You can help by learning which schools give assured big merit scholarships and what their req’ts are.</p>

<p>4) By taking AP classes and/or dual enrollment classes while in high school, he can “shave off” a semester or two with college credits. Both my kids started college with over 40 college credits from AP classes. </p>

<p>As for the last one…your son is young. He needs a “heads up” so that he can “own” his decision of how he’ll manage his high school year. If he knows that for him to go to a university (right away), then he’ll have to make sure he has the grades and test scores to get some big merit scholarships. If he decides that he doesn’t want to be bothered with getting good grades/good scores, then he have to own where he ends up. At least he won’t be able to say, “Well if I had only known…”</p>

<p>I am afraid I will foreclose on my little condo. I purchased my condo with all the money I had saved for retirement.</p>

<p>I’m confused, if you have some money saved, why do you think your Condo is going to go into foreclosure? </p>

<p>Anyway, in the meantime, pay off those credit cards as much as you can. You’ve got 3 years to do that. Pay the most on the ones with the highest rates. You might consider using some of the $5k saved towards the ones with the higher rates.</p>

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<p>Did you include your S’s father’s info in the calculator? The true EFC for top schools that meet need may be even higher than 8k, if he indeed takes a lot of vacations.</p>

<p>Your S may be forced to find merit-based full rides. If his stats are strong, he will have options by applying carefully. Others can give better specific advice on this.</p>

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<p>If you only make $10/hour working part time and have no savings outside of your 401k, then your EFC calculation sounds way too high. Try checking your numbers once more using your 2009 tax forms. Also, you might want to keep track of the time your son spends with you during his junior and senior years of high school. If your EFC is close to zero (which I’m guessing it will be when you recalculate), then it will be to your advantage to be able to claim that you’re the custodial parent for FAFSA. Your son would need to spend 51% or more of his time with you.</p>

<p>There may be dynamics with your son’s father that might make things difficult for you to be the parent who files FAFSA (only one parent can do this in a situation where the parents are not in the same household), but you should be able to show that your son’s EFC is lower if you file, which would be to the father’s advantage.</p>

<p>Focus on schools that offer good merit and need-based aid that are FAFSA-only (ie do not require the non-custodial parent’s income and assets to be reported), and encourage your son to get the best grades that he can in high school.</p>

<p>You’ve got a lot of time to work this out. Take a deep breath, cherish the time with your son, and don’t start worrying about college choices for another couple of years. He’ll have a lot of options when that time comes.</p>

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<p>And please, make sure you have more of a financial cushion and start building more savings for retirement. Your son should be eligible for enough financial aid to start at a community college even if nothing else comes through – though other schools could come through with both merit and need based aid – but you need to be putting your money into building an emergency fund, paying down debt, and putting some into retirement savings.</p>

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<p>Thanks for your response. To clarify - I used the on line EFC calculator assuming my son will say that I am the custodial parent and I did not include his father’s income. My income of $63,000 per year, which is a bit more than my current salary (assuming I get a small raise by the time my son applies for aide) and assests / savings of ZERO. The $5,000 I have “saved” is in my company’s 401K, which includes what they just matched (a small percentage). I stopped contributing to the 401K when I had to start paying my attorney for the custody case.
The calculator I used did not even take into account the value of my condo, which is not much at all right now (very little equity). My mortgage is rather high, this IS New Jersey - taxes are insane.<br>
I am focusing on my future survival. I will have the $14,000 of card debt paid off in about 3 years IF my part time job @ $10 stops laying me off several times a year. My car (it’s only a Huyndai, very basic car) will be paid off by then.<br>
I will then be 53 years old then. With a very tiny retirement fund for my survival. Do I continue working and handing over all the money to my son so he can go to school? Or do I start my 401 contributions again? I NEED to survive when I turn 65 and have so little money put aside for that. My parents have practically nothing left now, they are 77 years old. They are running out of money, down in Florida. I don’t want that to be me.
My son just assumes he IS going to college. ?? He talks about it. I told him I don’t have any money at this time. I want to help him…but…
His grades are pretty good, just “OK” C and B’s and one or two A’s for college-prep and advanced courses.
When I mentioned starting at a community college, he turned his nose up like that was beneath him.<br>
He’s going to have to work, and work ASAP when he turns 16 and start saving!!! Right now he’s quite the lazy teenager who sleeps till after Noon on weekends!!
He will HATE me, call me selfish, etc. etc. etc. as he does now if I “dare” to purchase anything for myself, such as a new pair of shoes or got get a pedicure in the Summer. He makes “comments” - which I am sure have a lot to do with what his father says about me, to him. I can only imagine what they will say when I “refuse” to pay some of my sons’ college bills and instead “keep the money for myself” (coming from them).</p>

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<p>*Do I continue working and handing over all the money to my son so he can go to school? Or do I start my 401 contributions again? *</p>

<p>No. You do need to ensure your retirement. Your son needs to know NOW that he has to “man up” and do what it takes to get what he wants for his education.</p>

<p>His grades are pretty good, just “OK” C and B’s and one or two A’s for college-prep and advanced courses.
When I mentioned starting at a community college, he turned his nose up like that was beneath him.</p>

<p>This is the reason why I mentioned learning now what schools give merit scholarships and what stats are needed to get those scholarships. What state are you in?</p>

<p>AUTO $$$ CC Important links to Auto Scholarships…
<a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/848226-important-links-automatic-guaranteed-merit-scholarships.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/848226-important-links-automatic-guaranteed-merit-scholarships.html&lt;/a&gt;&lt;/p&gt;

<p>Your son needs to know that community college is definitely an option unless he does what it takes to ensure that he has other choices. The ball is in his court.</p>

<p>*
He’s going to have to work, and work ASAP when he turns 16 and start saving!!! Right now he’s quite the lazy teenager who sleeps till after Noon on weekends!!
He will HATE me, call me selfish, etc. etc. etc. as he does now if I “dare” to purchase anything for myself, such as a new pair of shoes or got get a pedicure in the Summer. *</p>

<p>First of all, you don’t need to mention to your son when you buy something for yourself. Don’t let yourself be open for judgment. Yes, you have the right to spend some money on yourself, but why borrow trouble by letting him know. Frankly, the small amount that a pair of shoes or a pedicure costs is not going to make a difference for college costs.</p>

<p>*He makes “comments” - which I am sure have a lot to do with what his father says about me, to him. I can only imagine what they will say when I “refuse” to pay some of my sons’ college bills and instead “keep the money for myself” (coming from them). *</p>

<p>Well, you can always respond with… Your dad chose to keep money for himself instead of paying child support. If he feels that your college should be paid for, then he can figure out how much he should have paid and use that for your college.</p>

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<p>One thing I noticed, with income of $63K you must have a full time job in addition to your part time job (there are about 2000 work hours in a year and $10/hr comes to $20K). </p>

<p>Just be honest with your son from the start on how much you MIGHT be able to afford and that whether he gets any merit aid is in his own hands. If he applies himself and does well (and chooses the right schools) he has a chance to get some grants.</p>

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<p>Wow. Student Debt seems to suck as much for parents as it does for the students.</p>

<p>So, what is the best thing to do as a parent who’s middle-class to upper middle-class? </p>

<p>If you save for your kids college, that reduces the financial aid you get. So you essentially get punished for being responsible parents? Maybe parents should start stashing their kid’s college savings under their mattress…</p>

<p>On a side note- I think it’s somewhat illogical to determine the Family Contribution based on Family Income. It’s the kids who are going to be paying off their own loans (hopefully) after they graduate, and their income will then be independent of their parents’ incomes. So why should kids’ from middle-class families carry huge debt after college, while many lower income family students don’t have to worry about debt? Being in the same major, they will likely get similar starting salaries, yet the student from the lower income family will be at a much greater advantage to the student who came from a middle-class family debt-wise.</p>

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<p>First of all Community Colleges are a god-send to many. And they are not for the poor kids or the less bright kids. A friend of mine went to a community college in CA after high school for 2 years. Went to Cal Irvine to finish his degree. Then went to MIT and got a PhD. USA Today has some great articles about how some top tier colleges are actively recruiting the community colleges.</p>

<p>The shame is that in some parts of the country the college system is relatively cheap. The south and, until recently, CA. In the NorthEast colleges are much more private and much more expensive. Fla community colleges charge $67 per credit hour (instate). So $1,000 pays for a semester.</p>

<p>To the single Mom in NJ, I empathasize with your situation, I admire how well you have played a tough hand. To your concerns, I would say these things. Soc Security will be there for you (perhaps not at the same levels as today). I have really had to put the hammer down on my 2 oldest kids recently so that their grades are such that they have options at the end of high school. You might have to do the same with your son.</p>

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<p>His grades are pretty good, just “OK” C and B’s and one or two A’s for college-prep and advanced courses.
When I mentioned starting at a community college, he turned his nose up like that was beneath him.</p>

<p>You need to have a frank discussion with you son – his ability to go away to school and live on campus and have the full college experience is likely going to depend on him getting decent grades in high school and being an attractive candidate to win merit aid and scholarships. Too many B’s and C’s are really going to hurt his chances. He can’t wait until junior or senior year to turn it on – high school GPA is a very important factor and that includes every class he has taken. </p>

<p>And to second the comments of others – community college is nothing to look down upon. I know some very bright kids who have used our local community college to get their core courses out of the way at a very reasonable cost and then transferred into higher-ranked colleges for their sophomore or junior year.</p>

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<p>I honestly do not understand this mindset. If this is a middle or upper class mindset, then I am thankful I am not part of the middle or upper class. Why would you feel you were being “punished” because you could pay? Why wouldn’t you be happy that you had something to pay with, rather than having to receive grants and loans from the government? Why would you be bummed that instead of being poor or with no savings, you had the responsibility, the foresight, and the ability to pay - at least some of it?</p>

<p>It’s like when people complain there’s no incentive to get a second job because all of the money will go toward college expenses. Isn’t that the point? Paying for something you want or need, by yourself? Sometimes I feel like if you all prefer government and private funding, you should quit your jobs and go on food stamps. I guess I just don’t understand being jealous of those who don’t have the ability to pay.</p>

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<p>“So why should kids’ from middle-class families carry huge debt after college, while many lower income family students don’t have to worry about debt? Being in the same major, they will likely get similar starting salaries, yet the student from the lower income family will be at a much greater advantage to the student who came from a middle-class family debt-wise.”</p>

<p>Actually a low income student may end up with more debt than a middle/upper student. The FA may include Perkins loans on top of Stafford. Most schools don’t waive loans because your are low income.</p>

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<p>One note I didn’t make clear: I was referring to schools that promise to meet 100% of the demonstrated financial need. As in, they give substantial grant money (not so much loans) to those who need it, which is understandable.</p>

<p>Applicannot, you misunderstood me. It’s great for parents to save for college and have money to pay with, but it’s unfortunate that that isn’t seen as a “plus” on FAFSA; rather, they provide you with less grant money because of it. If FAFSA is going to base financial need on the families income and assets, I don’t think it should include the savings the parents were responsible enough to make for their kids for college.</p>

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<p>On this one…I fully agree</p>

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<p>Tough call on what assets should be included. Personally I’d rather see FAFSA protect a much more significant living allowance, because the one they use is laughably bad for almost every family, even if it meant a slightly higher assessment against savings.</p>

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<p>The assessment against parent savings is 5.6% at most. If parents have been responsible enough to save for their children’s college education, why wouldn’t they be expected to report that on FAFSA? This seems to be a very generous percentage.</p>

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<p>We are an upper middle-class family. We have tried our best to be ready for our kids to be in college. We have one finishing his freshman year and another that will start in the fall. I am so thankful that my husband and I have jobs that will allow us to help our kids get a college education and not be in debt when they graduate. We won’t get any financial aid nor do we deserve it. However, the one thing that bothers me is that I don’t get to take any tax deductions for any college expenses because our AGI is too high. ***? I think this is very unfair. I believe everyone…no matter their income…should be allowed to take the same tax deductions for paying for college expenses. So, if a family makes $100,000 they can take the $4000 Tuition and Fee Deduction. But, if another family makes over $160,000, they do not get to deduct any. Why not? Seems silly to me.</p>

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<p>Ah, the time-honored tradition of IRS phase-out rules…</p>

<p>They affect child tax credits, itemized deductions, interest on student loans, IRA contributions, Roth IRAs, etc, etc, not just HOPE & Lifetime Learning Credits. For these we need to thank our Congressmen and women. Or write to them and ask that these phase-outs be rethought. While they’re at it, they can fix the AMT.</p>

<p>Well, one can dream anyway ;)</p>

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<p>Right… you don’t need the grants since you can make up the difference with the savings. Need-based grants are given when you can’t pay. If you have savings and you can pay at least a portion, then of course the grants are going to be reduced. What is the problem there?</p>

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<p>That doesn’t make sense, either. If you have $100,000 in savings, then your financial aid package should aim to make college affordable above and beyond the $100,000 you are able to contribute. Thus, the savings you have would be the most important factor. This is also why non-saving families get slammed (and they do, contrary to popular belief); they should have been saving but were not.</p>