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

Paying for College
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<p>You save for your own retirement. Your son will need to pay for college. If you are able to help him to some small extent, that’s wonderful, but it’s not required. If his father will help pay, that would be great, but it doesn’t sound as if your son can count on that. You mentioned earlier that his grades are middling at best, so spending two years at a community college bringing up his grades is a good option for him both academically and financially. </p>

<p>You should not feel that you need to apologize to your son for this. It is what it is.</p>

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<p>*You should not feel that you need to apologize to your son for this. It is what it is. *</p>

<p>Exactly…you don’t owe your son an apology. It’s not your fault if his dad won’t help and your son’s stats might not be high enough for scholarships.</p>

<p>If it’s unlikely that he can get a good scholarship anywhere, then he might as well get used to the idea of either going to a local CC for two years or (if he can afford it), commute to the local state university.</p>

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<p>PS 13 said: " I also am under the frustration many have spoken . . . state of shock at this point with my high EFC and the cost to attend $50K schools . . . D1 $20-24K in top three school choices . . we are trying to payoff our mortgage within next ten years by making extra principal payments . . . w decided it would be in D best interest to have a LAC education and are willing to keep on working to help achieve her goals as well as D2 in four more years . . will pay more money to go to college than your average student going to state college . . ."</p>

<p>Well, to paraphrase an old saying about low bidder contract work, with personal finances you can fully our retirement OR pay off your mortgage early OR pay for expensive colleges . . . Now pick which 2 you want to do.</p>

<p>This poster’s frustration - like some others on this post - is self-imposed: believing somehow that they should be able to Do It All, then feeling like the system is somehow squeezing them, when in fact they are doing the squeezing themselves.</p>

<p>It is a CHOICE to send the kids to 50k schools . . . There are many great schools for which the NET cost is much less, from LACs in the Heartland that are enticing students through merit aid to state colleges (some with good honors programs) where the list price is less to other schools where the list price is a bargain (e.g., McGill.)</p>

<p>Yes,colleges cost a lot . .but the national average list price is just under $30k a year for 4 year colleges, with many state schools considerably less.</p>

<p>For PS13, the solution is obvious: pick which 2 financial goals you want to fully met then do them . . . without whining.</p>

<p>P.S. SingleMomNJ, is in a different situation, and is closest to being a a victim of the sky high cost of college . . . community college may be the best route . . . CC is in a rarified place: nationally a little less than half of all high school graduates who start post-secondary education go to 4 years schools, with slightly fewer going to 2 year colleges.</p>

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<p>I, too, am a single mom who remarried but my current husband will not be able to contribute and my daughter’s father cannot either. I have no savings. My credit scores are not great…SO my question is…after all is said and done between scholarships, grants, whatever, and I am left with x-thousand dollars…for loans…will my daughter be able to get these on her own without me co-signing? I am worried due to my credit scores. My husband has excellent credit but I would be afraid to ask him to cosign.</p>

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<p>if you are talkiung about FEDERAL loans (Stafford, Perkins) your daughter will get these on her own without a cosigner. for most private loans, you will probalbly need a cosigner. the easiest loan to get was the Plus loan since it has a low credit check that most people willn’t be able to be disqualified for, but it is unsubsidized and in the parents name so that might not be a good option for your family. If you dont cant cosigner for your daughter, you will have to stick with STafford loans from the gov’t.</p>

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<p>You can’t deny that the system that requires middle class families to pay into gov’t coffers without any chance of actually getting any aid from the gov’t adds an unnecessary pressure. I am all for helping out the poor but is it really fair that people who do have jobs and who are working legitimate hard jobs can’t get any financial aid and have to take out huge loans? At the same time, families who were prudent enough to save money also get squeezed by the system since their savings are consumed by college costs while families who didn’t bother to save get free aid from the gov’t and from colleges.</p>

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<p>I know I’ll regret it, but I just can’t leave Bedouin’s statement below unchallenged:</p>

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<p>The two largest entitlement programs are Social Security and Medicare. These two programs largely send money to MIDDLE CLASS retirees!</p>

<p>The middle class benefits far more than the lower class does from the mortgage deduction on the federal tax form.</p>

<p>The middle class benefits far more than the lower class does from the federal and state moneys that are spent on building and repairing interstate highways and feels the effects of the overall lack of spending on public transportation far less.</p>

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<p>I am not attacking those ideas. I am merely pointing out the difficulties that middle class families (who still have to pay taxes that go in small part to fund things like Pell and subsidized loans) can get in receiving federal aid. I am not saying that middle class families receive no benefits from the gov’t; I am well aware of social security and Medicare and I have no criticisms here about those things. My point was SOLELY that middle class families have to spend more on college costs and are penalized for saving and earning higher incomes by the FAFSA system.</p>

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<p>Bedouin said:“You can’t deny that the system that requires middle class families to pay into gov’t coffers without any chance of actually getting any aid from the gov’t adds an unnecessary pressure.”</p>

<p>That’s a critique of taxes, not of higher ed funding . . . you pay for a lot of things you do not use.</p>

<p>“I am all for helping out the poor but is it really fair that people who do have jobs and who are working legitimate hard jobs can’t get any financial aid and have to take out huge loans?”</p>

<p>Ummm, it is NOT for “the poor” . . . a reality check on family incomes might be in order here: median family income is ~ $52 k per year . . . 80% of households earn less than $100k per year . . . I think median income of college going kids is just over $60k per year . . . I know many families in that area just over 100k area who get significant need-based financial aid . . . so it’s not " poor" who get helped out by need-based college financial aid, it’s the large majority of American families who benefit, the poor and the middle class</p>

<p>“At the same time, families who were prudent enough to save money also get squeezed by the system since their savings are consumed by college costs while families who didn’t bother to save get free aid from the gov’t and from colleges.”</p>

<p>Sorry, the “rules of the game” have been there for all to see for years, e.g., savings in the parents name are hit for college expenses at a much lower rate than savings in the kids’ names . . . second, merit aid is out there that has nothing to do with need-based financial aid . . . my family is financing college by using a combination of past income, current income and future income, as are most families.</p>

<p>Last, you get a rarified view of the world here on CC . . back in reality land - you know, where median income for a family is $52 k per year - 48% of the kids going to post-secondary education go to 4 year schools and 44% got to 2 years schools. That may not reflect the choices you want to make, but it is an option.</p>

<p>That said . . . as a percentage of family income college costs too dang much!!!</p>

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<p>I also have to take issue with this statement by Bedouin:</p>

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<p>Except for Pell grants for students from truly lower income groups, there is no * free aid * from the federal government. The only Federal aid other than Pell grants are the Stafford and Perkins loans, which are NOT FREE, since they must be paid back by the student and cannot even be wiped out by bankruptcy. Moreover, all students (no matter how wealthy) can take out Stafford loans as long as they and their parents fill out the necessary FAFSA form.</p>

<p>Free aid (i.e. GRANTS, not loans) from state and local governments varies tremendously from state to state.</p>

<p>Some state programs (such as NYS TAP grants) do provide grants to students meeting * income * guidelines. In NYS, a middle or upper middle class student will probably qualify for little or no TAP regardless of whether his/her parents saved any money or not.</p>

<p>Other programs, such as FL Bright Futures, are based only on academic achievement in high school (and college for renewal), and have NO income test for eligibility; these programs directly benefit middle and upper middle class students regardless of whether their parents saved for college or not.</p>

<p>One (possibly unique) program, the Kalamazoo Promise (Kalamazoo, MI), provides significant grant aid for <em>every</em> graduate of the Kalamazoo Public School system. The Kalamazoo Promise program pays for between 65% and 100% of tuition and fees at a public MI CC, college, or university for up to four full years of enrollment. The actual percentage depends on the length of time the student has been enrolled in Kalamazoo public schools and not at all on the parents’ income or savings.</p>

<p>As for free aid from the colleges: The vast majority of ** public colleges ** have very small pools of money to use for need-based grant aid and give little institutional grant aid to any student, no matter how poor. And a ** private college ** has the right to give its money to whoever the heck they want to and to decide how to determine financial need however they wish since this money is theirs to spend how they see fit. Some privates restrict their grant money to only students who they believe have real financial need, but even most of these private colleges don’t meet full need for all students with nothing but grants. Some privates colleges routinely award significant merit awards to 20 or 30 percent of the incoming freshman class and spend less on meeting financial need of students. Many privates split the difference and offer some balance of merit/need-based aid to attract the mix of students they want to get.</p>

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<p>Thanks Kei-o-lei for your post! You said a whole bunch of things that I should have said!</p>

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<p>I guess I am confused on this…I make about 75,000…have three children…assumed I will not qualify for any need-based loans/grants, etc???</p>

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<p>Mollymoo, that depends…first, will you have more than one child in college at a time? The Expected Family Contribution (EFC), which is produced by the FAFSA (and Profile, at some schools) is split between the number of college students currently enrolled. Second, there are different “need” definitions and scenarios - you likely will not qualify for federal grants (Pell), but state aid often does not use the same, fairly low, EFC cutoff. Finally, need-based institutional aid depends on the college’s endowment and policies. There are some schools, typically the most selective ones, where a $75K income would qualify for 100% funding above the EFC, which the school gets to determine. Others, who have a high percentage of no-need (ie upper income,full pay) students may also have more federal “need -based” aid left to give, such as Perkins loans and work study which are awarded at the school’s discretion, to middle-income familites than a public school would have. </p>

<p>Truly, the only thing you can safely assume is that you will have to research the schools your kids are interested in and make sure they apply to some that you know will be affordable!</p>

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<p>Of course everyone’s situation is different, but with an AGI of 74,000 my son was awarded almost exactly the same aid from all private schools he was accepted at. I did do quite a bit of research to target the schools he applied to. It surprised me since for some it was strictly need-based and for some it included merit $. The bottom line was roughly $25,000 not including work-study, loans, and student contribution. My fafsa EFC is about $20,000, but these were all profile schools. So I wouldn’t think you should assume your child will not qualify for aid, quite the contrary. Whether it is sufficient for your family to manage the expense is a different question.</p>

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<p>mollymoo,</p>

<p>It’s important to remember that if EFC > COA - (merit aid) for College A, then you will not be eligible for any need-based FA at College A. If you fill out the FAFSA, your student will be able to take out unsubsidized Stafford loans in this case, but that’s all you’ll get from anybody.</p>

<p>On the other hand, if EFC < COA - (merit aid) at College B, the maximum amount of need-based aid that you’ll get from College B is COA - (merit aid) - EFC. In other words, ** you’ll be expected to pay at least your full EFC** at College B. So it’s critically important to know (in advance) what the ball park figure for your child’s EFC and whether you can possibly afford it. [There are lots and lots of threads on unaffordable EFCs, but many of them are posted by folks with family incomes in the $100K to $200K range.]</p>

<p>Given your income level, only federal aid that your child is likely to get are Stafford loans and maybe some work study and maybe some Perkins loans. None of this aid is free since the loans must be repaid and the work study must be earned. The Staffords are likely to be split between subsidized and unsubsidized.</p>

<p>Now that does not mean Stafford/Perkins loans and work study are the only FA money your child will receive. The total FA package will depend on:</p>

<p>1) The total number of your children in college at the same time, which affects the FAFSA EFC. (Basically the EFC for “one child in college” is divided by the number of children in college to compute each child’s individual EFC.)
2) Your child’s EFC and need at the individual college; and need = COA - (merit aid) - EFC.
3) The college’s FA and/or merit award policies; these vary from college to college, and most colleges do not promise to meet “full need” for all students.
4) The state you live in and whether it has any grant money or subsidized student loan programs that your student qualifies for.
5) Your child’s stats relative to the stats of the pool of admitted students.</p>

<p>If your child is looking at most in-state universities, then the only * free * aid (i.e. grant or scholarship) you’re likely to see is either state or institutional merit based aid or state need-based grant aid, since most state universities have very little money set aside for institutional grant aid based solely on need. If you’ve got more than one child in college at the same time, you might see a smallish ($1000 or $1500 max) institutional grant as part of the need-based package. The state flagship may be much more generous with need-based grant aid since the state flagship is likely to have a much, much larger endowment than the typical directional state U. A few state flagships (UVa and UNC-Chapel Hill come to mind immediately) do have extremely generous institutional need-based grant aid. Other state flagships (Alabama for example) have extremely generous automatic or near-automatic merit awards for top-notch students in order to attract a larger number of them. So to give you a better idea of what to expect for your in-state colleges, we need to know where you live.</p>

<p>If your student is looking at out-of-state publics, then the need-based institutional grant aid will most likely be non-existent. There are only a very tiny number of public colleges that promise to meet need for OOS students. OOS students are often eligible for the big merit awards at publics, although in many cases the biggest merit awards are also highly competitive. [Alabama is a well known exception and there are others. See <a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/848226-important-links-automatic-guaranteed-merit-scholarships.html?highlight=automatic[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/848226-important-links-automatic-guaranteed-merit-scholarships.html?highlight=automatic&lt;/a&gt; for a thread about other schools with guaranteed merit aid.]</p>

<p>If your student is looking at private colleges, you’ll need to spend time on each college’s web site investigating that particular college’s financial aid policies and merit aid policies. They really do vary a lot from college to college and they can change with little or no advance warning for new incoming students. A general rule of thumb is that the more highly ranked and more greatly endowed a private college is, the more likely the college is to have quality need-based FA for families making less than $100K per year. But there are exceptions: NYU is the exception that comes up most frequently on these boards.</p>

<p>By the time you’re looking at schools ranked between 40 and 100 on the US News lists, you start to see colleges using $10K to $20K merit awards as a way to attract middle and upper middle class students. Usually the bigger awards go to the students who are well above the 75% of the applicant pool in terms of SAT/ACTs with really high GPA and class rank and strong ECs.</p>

<p>Some private colleges also use preferential packaging in need-based aid: A student with need that also has very high stats (relative to the pool of admitted students) is likely to get major institutional grant aid (and thus a minimum amount of loans and little or no gap), but a student with need that has run-of-the-mill or low stats (relative to the admitted students) is more likely to see a FA package that includes large a Parent PLUS loan, institutional or private loans, and/or a large gap.</p>

<p>Finally, it’s important to remember that while colleges use the FAFSA to determine (or partially determine) a student’s need, the vast majority of *free * FA/merit money is given directly by the colleges out of their own money.</p>

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<p>We are the definition of middle-income. We haven’t quite finished getting everyone thru college but are doing OK so far without loans. The first 2 went to CC first; one because she was very shy and not ready to go anywhere, the other because he had no idea what he wanted to do yet. They then transferred to state colleges and graduated. One went on to get her Masters at a good private school. Neither have loans. We payed for most of it and they helped out by working full time summers and a little during the year.Both had scholarships. The next one went to a private school with a large scholarship, didn’t like it and came home to go to a CC, and is now transferring to a OOS state school with a good scholarship again. No loans so far but we might have to do a small subsidized loan for a year. The 4th is still in high school, has a 4.6 GPA and is very active in sports and EC so we are hoping for more scholarships. He knows that without scholarships he may have to spend time at a CC; he does not want to so is very motivated.</p>

<p>We told them all up-front what we would help them with so there were no surprises. I am right in there with Momofthreeboys that our priorities are 1.our mortgage, 2.our retirement, and then 3.our kids education. We do not want to enter old age and have to ask our children to help support us because of debt that we incurred getting them through school. We live very frugally; old cars, camping vacations, furniture from Craigslist that I refinish. As a result we have no debt other than our mortgage, which is also very low. We will not re-fi our house for school. Of course not everyone chooses to live like this- our kids used to ask why we didn’t take better vacations, have better cars, etc. like their friends. Now the older ones really appreciate that they have no loans while their friends are barely scraping by. Our daughter recently bought a house which she could not have done with loans.</p>

<p>I guess it boils down to your priorities and how you choose to live. Everyone wants different things and you have to do what works for your family. For us,the “best” schools are what allows our children to get a good education without breaking us or them. Definitely a lot of people would not agree with us!</p>

<p>I also used to think "what are we doing wrong? when I saw people around us that I knew must make similar incomes with so much more than us. Then over the past couple of years, we have seen some of those same e lose their homes or get into real financial trouble. In the end I’m glad we live like we do!</p>

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<p>Those retirees paid about 13% of their income to fund SS and Medicare while they were working.</p>

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<p>Really? The standard deduction is $11,400. Homeowners that itemize mortgage interest don’t get that. So they’re behind the eight-ball to begin with (bet you your realtor won’t tell you that).</p>

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<p>You mean funding from federal and state highway taxes from fuel sales and tolls? Those that use the highways pay for them, right?</p>

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<p>I’d like to know what the OP and her son decided to do.</p>

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<p>We lived frugally and saved like mad and made a bunch of good investments. Didn’t have cable television (just an old antenna in the roof), lived in a cheap home with low maintenance costs. Current car has 200,800 miles on it. We’ve always lived on one income, my engineer’s salary. Not bad but not great. We only have one bed in the house. We sleep on the floor most of the time. Paid the house off in my late 30s which meant nine years of high-powered savings. Careful management of those savings has resulted in more than enough to fund two full-pay kids. Son chose a cheap OOS public as he’s cheap too. Daughter is starting a CS program at a local CC this year. She doesn’t know what she wants to do and already has almost a year of credits and an AA degree is only a year + summer away on the cheap.</p>

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I’m trying to picture my wife’s reaction if I had suggested that we sleep on the floor to save money instead of springing a few bucks for a frame. </p>

<p>Not pretty.</p>

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OP’s son is an aspiring mech e major. Getting through in even 4 years will be a challenge. It’s unlikely his AP’s will take anything significant off of that.</p>

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<p>‘Amen’ to takeitallin…the challenge I face is I am married to a ‘keeping up with the Jones’ wife. ‘Absoluteley no community college for my son’, she says. Do I just do what I feel is reasonable…or make the choice of heavy debt v staying married! Anyway…that is a separate post topic as is.</p>

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<p>You seem to be doing the right things, applying to the right schools. You have several affordable options. One thing I did not see was your state schools. For us, the state schools were by far the least expensive, and that is where one of my kids went.</p>

<p>As to how families in these income ranges pay for college, first of all your current husband and DS’s father should be contributing as well. That is assumed by PROFILE schools, and though your husband’s financials are off the hook in calculating for FAFSA EFC, it still comes down to the fact that he should be paying a portion of these expenses. That he refuses to do so, is not something the schools take into account. They cannot, because then all non custodial and step parents would refuse to do pay. The system is overloaded with needy students as it is where you really get nothing but loans, maybe subsidized from the government unless you are very low income, in which case you may get a PELL grant. You make too much money for the PELL. So you are at huge disadvantage in that those who are also deemed responsible to pay are not, putting the entire burden on you, your son, the schools, and the government.</p>

<p>Which comes down to how families like yours afford college. You are better off than many since you have saved something for your son’s college. Many have not, even at higher income levels, and that causes a problem. So you have about $15K a year to pay for his college. You son also should be paying something for his college. Does he have any money saved? Does he have a summer job? He also should consider working during holidays and second term at college. He needs the money. No vacationing or road trips for him–he needs to work and put some money towards this load. The colleges also provide money…sometimes. It looks like he got some merit money that goes on top of that $15K that you have for him and the $2500 I am estimating your son should be paying. Clearly those schools that do not offer any money and are high cost are eliminated from your list. Just can’t do it. Then you have loans. Your son is eligible for $5500 in Stafford loans. Depending on your family EFC through FAFSA, some of that may be subsidized. You are also eligible for PLUS, which is the parent loan to make up some of the difference.</p>

<p>So when all of your numbers come in, you look at what you can afford. Rowan is looking pretty good. Just $3K that needs to be covered, and your son should take responsibility for that with Stafford and jobs. You may cover incidental expenses out of current income such as transportation, books, etc. </p>

<p>So that’s how most families do it. Savings, Current Income, Loans, School scholarship, Government loan/grant from the parents and the student himself. That’s how we do it.</p>