My child refuses to consider safety schools and financial limitations

Parents Forum
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<p>Time ran out to add the below…</p>

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<p>Now, hopefully your D will receive fabulous money offers from a wide range of colleges, but first she has to apply to a wide range - including some of her choices and some of yours. :)</p>

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<p>You’ve probably mentioned that do your DD. Hopefully she can see that good point. If she knows your monthly expenses, that might make some sense to her that also paying for a student loan on top (for 10 long years).</p>

<p>If she would be like many young women with a new career, she’s going to want to have the professional wardrobe, a decent car (not necessarily fancy, but dependable), decent housing (not luxury, but safe and nice), and to provide for her other living expenses. A big student loan payment is going to be a “monkey on her back,” especially if she later realizes that there were less expensive options. </p>

<p>That said, now is the time to be the calm leader. Let her pick 3-5 schools of her choice (whatever you can afford/or get waivers for). Then also apply to 2-4 financial safeties of “mommy’s choice.” This is the time for peace. There’s no point in really stressing since there are too manyunknowns at this point. Your D may end up getting fab offers from her choices, or the fab offers may only come from your schools (or a mix of both). But, until then, be the calm leader. No one can make you spend (or borrow) anything that you don’t want to do. </p>

<p>You’re a good mom to care so much.</p>

<p>:)</p>

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<p>Does anyone know…</p>

<p>Schools that are supposedly “no loan”…do they…</p>

<p>include work/study - and what are those earnings used for? personal expenses? books? some of the next semester’s fees? what?</p>

<p>also guarantee to meet 100% determined need? (I’ve heard that some don’t, so that’s a bit misleading.)</p>

<p>expect the students to also earn a minimum amount during the summer to go towards school expenses (such as $2k towards education costs)?</p>

<p>I’m just wondering how this “no loan” stuff all shakes out.</p>

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<p>Bundle…</p>

<p>Has your D taken the SAT IIs? IF so which ones and how’d she do?</p>

<p>What is her class rank?</p>

<p>Does she have a “hook”? What are her ECs?</p>

<p>These will likely come into play for admittance at her top choices.
I
'm asking because there’s no point in recommending some top schools, if she doesn’t have a hook or hasn’t/won’t take SAT IIs.</p>

<p>What would be her likely major?</p>

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<p>you almost always get work study when you get a finaid package. They range from a few hundred dollars to several thousand. In general the better the school the lower the work study award. Say you get $1500 in work study, pretty average. That is not included in your finaid grant. The $1500 is added to your bill. So if your EFC is zero and the school meets that EFC, you will end up with a bill for $1500. The student has the opportunity to work off that money during the year - it’s not always that easy especially at state schools where there is tremendous competition for work study jobs. The school does not actually guarantee you a job. For most low income students the work study money goes towards incidental expenses, entertainment, etc. Parents are essentially stuck with the payment. </p>

<p>The way “no loan” schools meet your 100% need varies. Some may expect a student payment of say $2000 as part of a summer job contribution, others may give out substantial work study during the year, but in general the “no loan” schools are pretty generous - they went “no loan” at least partially because they want to attract low income students. A good package at an elite $50,000 a year school for 0 EFC might be $5000 in Pells, 750 in ACG, $1500 in work study and the rest in a college grant. The student will usually still have to pay for books - approx $1000 a year, transportation, entertainment, clothing, med insurance etc etc. These costs mount up when you have no extra money to spend. At a slightly lower level private say Rochester or Franklin and Marshall, at 0 EFC you might expect a package of $5000 in Pells, 750 ACG, $2000 in work study and probably loans in the $6000 range. At the next level as a 0 EFC student you can expect a similar package but “gapped” ie you’ll have to pay some tuition probably around $5000 the first year. </p>

<p>As far as I know there are no “no loan” state schools in NJ. and OOS’s generally don’t go “no loan” for OOS. So unless the merit portion of the package is substantial the 0 EFC student is usually “gapped”. Add that gap to all the other costs, books etc and the various “fees” that many states charge “activity fees, technology fees etc” and you have a difficult financial situation. It’s one reason the dropout rate for low income students is, I believe, over 50%. The op’s D, even five years ago would have many more choices, but as costs have gone up so rapidly and gov aid stayed virtually the same the affordability gap has kicked in big time. Loans of $20,000 a few years back seemed reasonable but today’s loans, $30,000 and over are a cause for concern. (BTW there are various other payback options for fed loans which can reduce payments, payoff loans, or forgive them over a period of time. Paying $460 is not the only way to go.) In general, at 0 EFC, unless you can get in to one of the “no loan” schools or obtain serious scholarships from the states, you’re looking at borrowing the best part of $30,000, plus work study, working summers etc.</p>

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<p>Speedo’s numbers are very accurate although you won’t get a bill for $1500 if the $1500 is used to offset books, travel and personal expenses.</p>

<p>There are just a couple of things I would like to add about no loan schools:</p>

<p>1- They tend to estimate parental contribution a bit higher than other schools but not enough to offset the loan amount. So if a school that packages with loans estimates parental contribution at $1500, a no loan school might say anywhere from $2K-$3K with most congregating in the middle.</p>

<p>2- Some schools include an estimate of books/ transportation/ personal expenses in the financial aid package (so it’s feasible that a low-income student could end up with just about all of tuition/room/board included in grants and have parental and student contribution just go towards expenses and books). But at least one top no loan school just estimates that the student will work and cover the extras without itemizing how much it expected the student to earn and without including personal expenses/ travel/ books in the financial aid. (So basically, the package said tuition+room + board = X, family contribution = Y, aid (in all sorts of grants) = X-Y, student work in summer and school year will cover books, transportation and personal expenses. Student is eligible for work study for Z.) </p>

<p>All the schools expected the student to work in the summer. Only the one I described above didn’t give an estimated earning figure. Also, a lot of the no loan schools were very generous with us when they sent my kid the admissions letter and we had to send in the deposit. Almost all of them offered to reduce the deposit. </p>

<p>And last thing: My kid applied to one school that was technically an academic safety but it isn’t need blind, doesn’t usually meet full need and isn’t a no loan school so we didn’t consider it a safety. The school met full need with no loans. I know they wanted kiddo to attend (they offered a flight up after admissions) and, honestly, kiddo really liked this school (but it wasn’t as strong in major field as some of the others) but I just wanted to put it out there because schools <em>can</em> do this. It’s called preferential packaging.</p>

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<p>I know that there are some who will “pooh pooh” the following, but I feel very strongly about this… </p>

<p>IF THERE ARE OTHER OPTIONS…I wouldn’t want any kid to go to college on such a “tight budget” from a super strict formula of grants, merit, help from parents, summer job, and work/study, to pay for COA and misc costs, that the kid literally has no money to just have a “decent” college experience as his/her roommates will. NO kid wants to be the only one who doesn’t have $10 to get pizza on a Friday night with the group. NO kid wants to be the only one who can’t buy a latte during the “study group” at coffee shop. I’m not talking about spring break at Ft. Lauderdale; I’m talking about just the little things, the pocket money, that kids need while in college. </p>

<p>And…(ok… this is sexist…go ahead and smack me…LOL) few girls want to be the only one on campus that can’t afford to buy a few (not a lot, but a few), of the styles of clothing that the other girls are wearing.</p>

<p>My nephew is at a top 20 “full need/no loan” school. His roommate is on F/A, but the kid is still in need of money. My sister was telling me that the roommate rightly grumbles about various costs that his F/A is not covering (or didn’t consider). I’m not even talking about pizza on Fridays; I’m talking about other school-related costs that add up (such as one prof demanding the use of a particular calculator that isn’t like the more commonly-used Ti graphing calculator. )</p>

<p>It doesn’t surprise me that 50% of low-income kids end up dropping out - and I think that there always is “some” gap in any F/A package. Some of these low-income kids have to play it so close to the penny. They often don’t have family to step forward and help them with an unexpected expense, car repair, or some other costly issue.</p>

<p>I would rather the OP’s D get some F/A and/or merit package that doesn’t require one cent of the OP’s money. That way, the OP could help meet those unexpected costs, etc, when they come up (which they surely will - I could tell you stories of some of our own!!!). I’d also like the OP’s D to have an F/A and/or merit package that doesn’t require that every cent of her summer or school year earnings go to some school related cost, so she’ll have some pocket money (money for clothes, gas for her car, an “occasional” weekend or day trip with friends, money for a concert, etc. )</p>

<p>Yes, there are kids who can happily go to school on a shoestring, but I suspect that there are many who hate living on a shoestring - especially if there were OTHER less tight options.</p>

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<p>OK…I’m dense…I don’t quite understand what Speedo or 2college are talking about in regards to this $1500 issue. Is the first quote saying that the $1500 is a gap? I’m confused.</p>

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<p>Most families and kids feel the same way, they stay home, work a part time job and commute to a local low cost college. That’s by far the most popular other option. This particular kid wants to go to a high end school. If she’s prepared to make the sacrifices, take out the loans etc, that may still be possible. And the drop out rate at the better schools is way lower and the job payoff much higher. Certainly your chances of landing an international business job are way higher at GW than at NJ lower level state u. Her choices and windows of opportunity are unfortunately very small.</p>

<p>to try to explain again the work study. They don’t give you the money in your finaid package. You have the opportunity to work x amount of dollars off your bill during the year, that’s at most colleges. At the very high end, which the other poster was talking about, things may be slightly different. You may be able to use the work study for books but that’s unusual.But say your EFC is 2000. The college meets EFC and you are billed 2000,
they don’t credit you the work study. If they give you work study, say 1500, now your bill is 3500 and the student can make that 1500 during the year. He or she can pay back the parents or as is usually the case spent the money as it goes into their bank account from the paychecks. Hope that helps. Too much work study is not a good thing.</p>

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<p>JustaMom4 </p>

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<p>So, is the below right? Did your daughter borrow a total of about $20k and is paying it back over 20 years instead of 10 years? While I can see that it makes repayment less “painless” each month, she’ll still end up paying over $13k in interest. </p>

<p>Is that interest deductable anywhere on one’s taxes? If not, that’s too bad.</p>

<p>Student Loan Calculator</p>

<p>Loan Balance: $20,000.00<br>
Adjusted Loan Balance: $20,000.00<br>
Loan Interest Rate: 5.60%
Loan Fees: 0.00%
Loan Term: 20 years
Minimum Payment: $0.00 </p>

<p>Monthly Loan Payment: $138.71<br>
Number of Payments: 240 </p>

<p>Cumulative Payments: $33,290.18<br>
Total Interest Paid: $13,290.18</p>

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<p>It may be possible for grads in the next few years to consolidate all their loans at under 4% At that rate, borrowing if it brings you the rewards you seek, may well be worth it, even for wealthier apps. If you get 3 years in DC, a year in London and a good paying job, it is certainly something to consider even at today’s ridiculous loan levels.</p>

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<p>Thanks, now I get it… :slight_smile: had to “undense” the brain a bit… :)</p>

<p>So, of course, the real problem could be if the student is “awarded” $2500 in work/study, but the college can’t guarantee a campus job. Therefore, if the student can’t find one off campus, then that $2500 becomes a gap.</p>

<p>I know that many “non F/A” students (and parents) are surprised to find out how hard it is to find a campus job, because the ones that are available are given to W/S students first. My DS1 was able to get an on-campus tutoring job (paid by the U), because that particular job required a “skill” (so to speak) of good grades in particular subjects, therefore it didn’t have that W/S priority. However, if a kid wants to work in the campus bookstore, or the campus cafe, or wherever, those jobs are often designated as priority jobs for W/S students.</p>

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<p>In the past, inflation has reduced the effective monthly payments over time even further. If such loans enable attendance at the dream school, and the consensus is that the school is one of the best, I find it hard to counsel against taking the loans.</p>

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<p>I absolutely agree. My son initially told us that he would “just borrow” what was no covered by our contribution/merit & financial aid. We explained, then repeated many times, that we would absolutely not co-sign. He got over it. </p>

<p>I hesitate to mention this because it is absolutely not for everyone, but does your daughter have any interest in ROTC? My husband went through college on a Navy ROTC scholarship and is getting ready to retire after 20 years in the Marine Corps. Friends of ours have a son going through college on an Air Force ROTC scholarship to be a metorologist; in otherwords there are a lot of different programs.</p>

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<p>mom3collegekids - she did consolidate and has a 20 year loan - however there is no prepayment penalty. She pays extra. What this does is help in the “lean” years. Also interest rates were pretty low when she graduated in 2005. I think her interest rate is lower than 5.6. I will ask her.</p>

<p>speedo is correct - the interest rates bounce around according to the whim of congress. Folks tend to consolidate when they are really low since you can only consolidate once.<br>
So for instance the rate last year was 6.8. If a student borrows at 6.8, 5.6, 4.5 and 3.4 when they graduate it’s 3.4 if the rate stays low they can wait until repayment to consolidate but if the rate jumps back to 6.8 in July they can consolidate right away and get all their loans at a low rate.</p>

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<p>pugmad, I’m going to have to disagree with you recommending she look into a ROTC scholarship. In different times that might be a perfect solution, but definitely now is the time for only those who are very dedicated to service to the country to make that kind of commitment. First, if she changes her mind (and it’s at the point they allow her), she’ll have to pay back all money she used. There are many reasons to join the service, but purely to get them to pay your students loans is not a good one. This administration has no idea if they want to pull out or win in Afghanistan (I have no clue which would be best either), so they are going to just keep adding/subtracting troops there until they can pass it off to the next administration…meaning alot of kids will end up over there, sacrificing, with no clear mission.</p>

<p>I had an ROTC scholarship myself, which was wonderful-but I had a strong commitment to the service. As I got older, I realized that I hadn’t thought it through, what would happen in a war (leaving a newborn baby with a babysitter while me and my spouse deployed-not a good time in our lives). Needless to say, I think the kids need to have a strong desire and an understanding of what it means to serve, before they pledge to give their life for their country…</p>

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<p>well said, busdriver</p>

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<p>Yup, one needs to call the financial aid office and find out what the situation is. One of my kids was never able to get a work-study because there was such a shortage at her school. At another one’s school, many kids have jobs including those not on financial aid. At another of my kid’s schools, there seem to be no work-study jobs-- but it’s in a city so some kids have jobs (or, more likely, internships) off-campus and on-campus jobs are often held by adults. And, believe it or not, our local community college will practically create jobs on campus for work-study kids. The situation is very different in different schools and you just have to ask.</p>

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<p>Mom2collegekids: my D won’t find out how she did on the SAT subject tests until the 29th; she took them earlier this month. She’s taking the AP exams in May after she gets done her 3 AP classes this year. Her ECs were stuff like an academic challenge team, REBEL, working tables for the Red Cross, drama club (president this year). She worked at an amusement park this past summer, and she saved up some money from that. Is being low-income considered a ‘hook’?</p>

<p>She has no problems with doing work-study to help pay for school. I do sometimes worry that work could interfere with studying time, though. As one who worked during nursing school, I know how work can take away time from hitting the books. </p>

<p>I’m glad you think $3K is generous; it didn’t seem like enough to me. Especially when I see COAs over $50K! Thank you for your congratulations. =)</p>

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<p>If your daughter can get financial aid that will cover the cost of tuition and housing - then that $3000 from you is enough to cover books and incidentals over the course of the year, which means that money she earns can go to extras. Obviously, if she doesn’t quite get enough in financial aid, then money from you can help make up the difference. </p>

<p>I don’t think that low income is a “hook” at all – a combination of low-income with a real hardship story to tell in an essay might give an application an admissions boost – but the mere fact that the family is on the lower end of the income scale probably won’t make much of a difference other than provide some context to your daughter’s grades and accomplishments. </p>

<p>My daughter is at college that meets 100% need and I have found that the financial aid has been more generous the years that she has qualified for a Pell grant. I’m self employed so my income fluctuates – my sense is that if the financial aid office sees a possibility of federal money kicking in, they do everything possible to maximize her eligibility – whereas if the numbers foreclosed that possibility, then they did everything possible do minimize the amount of the college grant.</p>