My son has been accepted to Indiana University and I don't know what to do

Paying for College
1

Hello,

I did not attend a university and neither did my wife. We had our first child at age 19, and have added three others along the way. Their ages are 17, 11, 4, and 2.

I am in a profession that did not pay well for years, and I have been unable to save for college. But my profession is such that you make significantly more as time goes on, and as of the last few years I am making quite a bit more.

Although I am really in the beginning stages of researching all of this, I feel like I am in a pickle.

I was unable to save in the past, and if our previous situation remained, my son would qualify for financial aid. But now I am afraid he won’t qualify, and here we are with no savings.

He has been offered a small preliminary scholarship to Indiana University, where we thought he would go. We thought he would get a little more, that maybe he would be responsible for some expenses through various means (work, loans, etc), and I could pay the rest as we went.

Well now that he has been accepted to Notre Dame, I am intimidated, but I want to do everything I can to not deprive my son of this opportunity.

So… a few questions…

  1. What would be the best resources of information and where should I begin to look? I really wanted to put him in a position where he would have little or no debt coming out of school.
  2. Is there a book or books that you recommend on familiarizing oneself with all of this?
  3. If he does indeed have to take on debt to fund his education, will he have enough additional earning potential as a Notre Dame grad for it not to matter much? I have met many people who are saddled with tons of debt from college that it seems like they will never pay off. But I must say it has never been from a school like Notre Dame.

Thanks in advance to anyone willing to help me figure this out.

Best Regards,

Clueless-in-Indiana

2

First, congrats to your son, with great acceptances to IU and ND. Presumably, your son was admitted Early Action to ND, and you don’t need to inform the school until May 1 whether he will attend. I’m guessing, but don’t know, that the financial aid package from ND didn’t come out at the same time as the acceptance. Have you put your financial information into the Net Price Calculator on the ND website to see what it projects in terms of financial aid? The “NPC” will identify your “Expected Family Contribution” – is that “EFC” manageable or is it crazy for your family?

Consider requesting a phone call or – if you are in SB area – a meeting with your admissions representative who could connect with the financial aid office as well. As your son is “first generation” college student, ND is likely to want to work with your family to try to make it affordable for you. At the same time, a student can only borrow a limited amount of money per year (around $5000 freshman year) so additional loans have to be in the parent’s name. That is a risky situation for a family with 3 more children at home, whose income has only recently started to rise. Many people would discourage that kind of debt for a family to send one child to a school like ND.

Bottom line, ND is a wonderful opportunity, but only if it doesn’t risk the family’s economic stability. Reach out for additional information from ND, and go from there.

3

http://financialaid.nd.edu/prospective-students/applying/

Did you complete the financial aid application forms ON TIME for REA Notre Dame applicants? According to this, you needed to complete the fafsa and Profile by November 15, and submit documents to IDOC by December 15.

If you did that, you would receive your financial aid award by February. You wouldn’t YET have that financial,aid package for ND.

If you did NOT complete these forms, do it NOW…like today. Then contact ND on Monday. Let them know that the forms were late…but have been submitted.

The best aid comes directly from the colleges.

Your son can borrow $5500 for his freshman year, $6500 for sophomore year, and $7500 for both Jr and Sr years. Those are the federal loans…in his name only. They are available to him onky if you complete a fafsa.

Re: your comment about past and current income…

  1. MOST families do NOT have a college savings at all. Many pay out of current earnings, savings, and loans. Or their kids go to colleges where they receive merit aid to soften the financial blow.
  2. It sounds like you are looking for outside scholarships. That is great...but remember a couple,of,things...they are usually not a high dollar amount, and they are usually for one year only. In addition, you must report them to,the schools if received, and they might reduce your need based awards...because your need is less.
  3. Did you run the net price calculator on the ND website? What does IT say your net cost will be? As a caution...if you are self employed, this might not be so accurate. Are you self employed?
  4. Do both parents work? If not, perhaps the parent who doesn't work cannget a part time job at least...and those funds can be dedicated to paying for college.
4

Welp… this is embarrassing, but my wife sent me a text early this morning as I am traveling for business, saying he was accepted to Notre Dame.

I asked her to send me a pic of the letter and posted this thread in haste.

I got a pic of the letter and it was a small grant FROM Notre Dame for his AP accomplishments.

False alarm. Lol

I didn’t think he applied to Notre Dame, and have since confirmed with him that he didn’t.

So… IU it is.

He is an accomplished student and has been accepted to Butler, Loyola Chicago, and Indiana University—the only places he has applied.

He wants to go to Indiana. He has been very adamant about that.

So… yeah. Sorry for the false alarm.

But I am still unprepared and could still use answers to the questions above, but only as the apply to Indiana University. LOL

5

You need to be prepared for the fact that ND might turn out to be unaffordable for your family. You have 3 other kids and your own retirement to worry about, too. In addition to working with ND on your financial aid package, your son needs to make applications to other schools that are affordable. I have a friend who was a ND athlete in college, and his oldest son ended up turning down his ND admission because they couldn’t afford it.

Know that if your son is counting on his high school guidance counselor for help in picking schools that the GC rarely has much insight into the financial side of making college choices. They may be savvy about admissions, but they aren’t paying the bill, and don’t know your financial situation.

6

https://admissions.indiana.edu/cost-financial-aid/financial-aid.html

Here you go. Get that FAFSA done…asap. You will be using 2015 tax return information, and current asset balances.

Do,it NOW. Don’t wait until March.

7

Thanks Thumper. Ok–I will do it when I get home this afternoon.

The FAFSA is for financial aid right? At what point does it not make sense to bother with this? In terms of income?

8

Yes, complete the FAFSA for financial aid eligibility. Other people here can advise about what types of income might be a level where it’s not worth applying for aid – but I’m guessing (based on my family’s lack of eligibility for a family of 4, making around $150,000, with substantial college savings) that it would take approaching $200,000 a year with a family of 6 to not be eligible. But again, we were not eligible so I do not have personal experience with the ranges and cutoffs.

Agreeing with the comment above about merit aid – outside scholarships usually reduce the financial aid package awarded by the school, and do not reduce the amount the family is responsible for. If a family is not eligible for financial aid at all, and there is no financial aid from the school, then the merit aid does help, because it reduces how much of the full price you have to pay.

If the choices are IU, Butler, Loyola Chicago etc – and your son is a first generation college student (neither parent completed college), then the Groups program at IU provides a lot of structure and support for 1st gen students. A student needs to be recommended for that program by their high school – if your son has applied for Groups, that can include additional financial assistance and support, including a 7 week summer program for IU course credit, paid by IU.

Butler and Loyola are both smaller schools, and could feel more “homey” to a student whose family does not have experience with US colleges. Butler does not strike me as a school with a lot of outreach to 1st gen students, but maybe I’m wrong. Loyola has a reputation for good merit (non-need based awards).

In any event, get your FAFSA completed, if the deadlines for financial aid applications have passed at any of the schools he has applied to, contact those schools to see if can be submitted late, explain your student’s 1st gen status and lack of familiarity with the process.

Congrats again to your son, these are terrific schools and he will have a great experience, and education, at any of them.

9

http://financialaid.nd.edu/prospective-students/applying/ indicates that Notre Dame needs both the FAFSA and CSS Profile financial aid applications.

10

Indiana University has a MUCH lower threshold for awarding need based aid than $150,000. This is a public university that does not guarantee to meet full need. An income in the $150,000 range would likely yield a fafsa EFC that exceeds the instate cost of attendance for IU.

@Clueless-in-Indiana …just complete the FAFSA form. It doesn’t take long to do. You will use your 2015 tax return information. You can link to the 2015 tax return (hoping you and your wife filed a joint return) and the income and tax information will port right over to your FAFSA. Link your kid’s 2015 return too. Add the asset information, and you probably will be done.

11

Do we have to file a FAFSA every year? Income of $125k in 2015, probably $180k for 2016, probably over $200k thereafter. Family of 6, filed joint return.

He is deadset on Indiana, but if Loyola has better merit scholarships,is it possible it would be less costly for him to attend there?

12

Oh, about $75k in retirement savings, increasing by $15-$20k per year.

13

Yes, you apply annually…every year is a new year.

Did you do the net price calculator for any of these colleges…including IU?

If not…do so.

I’m going to guess that you will not receive any need based aid at your income level…except a Direct Loan of $5500.

But you won’t know unless you apply! So apply. It’s free to apply.

14

I believe parent retirement accounts are not part of calculation for financial aid eligibility. In state at IU, especially with any automatic merit award, will probably be the most affordable, with a “list” price of about $21,000. A student who lives at home and works during the summer can often save about $2500 and can borrow $5,500 themselves. That leaves about $12-13,000 – not taking into account any automatic merit scholarship from IU – hopefully manageable for a family whose income is rising rapidly.

15

Agreed. Instate cost of attendance at Indiana is about $22,000 a year. With your current income, i seriously doubt your student will receive need based aid. He will be able to take out a $5500 loan for freshman year if you complete the fafsa.

Your son has already been offered a small scholarship. What is THAT amount? Add that scholarship amount to his $5500 loan. Subtract the total,from $22,000. That is what you will be billed by the college…or close to it.

16

Don’t forget to add travel expenses to your EFC to get a more comprehensive picture of the cost. I would also add miscellaneous expenses, but until your son has found his routine, it will be hard to estimate those with any accuracy.

(your son might pay those expenses, or some of them – but it’s still good to anticipate them and plan accordingly)

17

He was offered $3k per year from IU.

I have been extremely busy with work, and have been trying to get him to take the initiative to seek this out himself, but I think I am going to have to step in now.

He says he has not applied for other scholarships or enrolled yet because he heard that they will offer more money if you wait. Is there any truth to this?

So we need to file FAFSA, apply for other scholarships l, and enroll… in what order?

Thanks so much for all of your help!!!

18

https://fafsa.ed.gov/fotw1718/help/faadef23.htm

But pretax retirement contributions (e.g. 401k) are considered by the FAFSA formula as untaxed income.

They are listed on 2015 W2, DRT won’t bring that number over from the tax return.

19

As said above, the best way to get merit aid is to apply to schools that offer merit aid for your son’s stats. If he applied to IU by Nov. 1, then he is automatically considered for these achievement scholarships. It sounds like was given his offer already.

https://scholarships.indiana.edu/scholarships/achievement/

20

Did he get his merit offer from Butler? I thought they were more generous?