Need general financial advice for first job, savings, and FAFSA...

Paying for College
1

<p>Ok, this is going to be a long post, just so you know. </p>

<p>Background:
I have lived in relative poverty for about 7 years (mom makes ~$20,000 each year now). My dad got into a horrible car accident 7 years ago that has left him unable to work, however when he did he owned his own business and we probably made ~$50,000-60,000 each year. We never could save though because of medical expenses that my grandparents left (they died 5 days apart about 15 years ago), and by the time we got all of those paid off, my dad got into his accident. </p>

<p>Flash forward to today. I did my FAFSA and have an EFC of 10. My mom made around $18,000 last year, and I made nothing because it is hard to get a job while taking care of your dad. Because of this, I received very generous aid and scholarships and am going to a state U for 0 this year (except for $3,000 in work-study). I qualify for a special program because we make poverty level income and for this I am grateful. </p>

<p>Next year however is going to be a much different story. To start, my mom got a promotion and is going to be making around $30-35,000, which is going to make our EFC go way up (I am honestly not sure how much, because I am the first to go to college in my family). </p>

<p>The other major problem is that I now have a nicely paying job (for a first job as an 18 year old with no experience) and make about $300-500 each week, depending on how busy we are. Plus, I have another side job that can get me from $50-200 each week. This puts me at making a little under $10,000 before school starts this fall. I want to put some of it away because I want to have my own savings, but I know that this will probably royally screw me over for FAFSA. However, I want to start a savings account because I am a realist. My mom has nothing in savings because every cent we have basically goes towards necessities and medical things for my dad. I want to save my money in case something happens to my dad. His accident has left him in unstable health, even 7 years later. I want to save this money because I know my mom will not survive financially if his health takes a turn for the worse (or worse...)</p>

<p>I also know I need the money for next year's school. I don't have a problem taking out a small amount of loans if I have to, but I cannot afford to take out loans in the magnitude of up to $40,000 (which is what would happen if I had like no aid), because on top of that I would really love to go to grad school for either law or continue on to some type of graduate program.</p>

<p>Um, yeah so that's the background story, I guess I wasn't sure what to put so I just put everything out there.
I have a few questions:
-Is there anyway I could have a savings account that would have a minimal impact on my EFC (or as little as possible)?
-How much will my EFC (roughly) go up if there is 3 of us and I make about $10,000 and my mom makes around $35,000. (Up from 0 and $18,000)?</p>

<p>I guess I am just looking for advice all together because I have no where else to turn. Sorry if this sounds rambly and like I went on tangents, but I am very tired and have to work a 16 hour day tomorrow :( blech!</p>

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<p>I just ran an EFC calculator and for my mom making 35000 and me making 8000 with about 3000 in my mom’s savings, it gives me an EFC of around 2000. This is not too bad, if my school met 100% of need, but it does not. It is a FAFSA only school and does have reasonably generous aid. </p>

<p>How is a 2000 EFC? A huge jump from 10, but I think I could manage with my job. I do pay all of my own bills so it will be a bit of a stretch, but I am used to scrimping and saving. </p>

<p>That will still leave me Pell Grant eligible which is a big boost. :)</p>

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<p>Open the savings account in your parent’s name, not yours?</p>

4

<p>Here’s a link to the EFC guide for 09/10 - use the tables and forms marked “A”:
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf&lt;/a&gt;&lt;/p&gt;

<p>For your non-WS income, you’ll have an income protection of $3750 after offsets for state taxes (5% for MI) and social security tax (7.65%) and the actual amount of income tax paid. Above that, 50% of your earnings will be added to your EFC. As a student, you have no asset protection allowance and 20% of your savings as of the day you file FAFSA next year will be added to your EFC. Your work study income will not have an impact on your EFC.</p>

<p>Depending on when your mom’s pay increase goes into effect, her income for this year may not reach the $30K cutoff for automatic 0. Even if it does, I think that keeping careful records of medical costs and submitting them to the school would allow them to adjust the EFC. Giving your mom savings to start an emergency fund should not affect your EFC if she has no other assets considered by FAFSA. You can look up their asset protection allowance on table A5.</p>

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<p>$4,500 for the 2010-2011 academic year; $5,250 for the 2011-2012 academic year; and $6,000 for the 2012-2013 academic year;</p>

<p>these are student income protection allowances for the next 3 fafsa years. You can add an allowance for taxes, etc to this. So for students earning money in 2009, I would say that 50% of the amt over 5K would be ‘counted’ by fafsa towards EFC for 2010-2011 school year</p>

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<p>Do you plan to live on campus? If so, you can possibly reduce your costs next year by being a dorm RA; most schools provide a free room for that and some even include meals, as well. That takes off a big chunk of your costs.</p>

<p>My sister got through 4 years at the state U and every year was a worry- would there be enough FA to go another year? She found that by making “face time” with the people in the FA department, so that they knew who she was and what her needs were, they went out of their way to assemble a package that made the school affordable each year in spite of ups and downs in income (Dad is a construction worker and income varies from 30-57k a year). Two years she got Pell and two we were just over the cutoff but they managed to come up with some institutional grant to make up the loss.</p>

<p>Also, depending on your major, many schools have scholarships that aren’t available until sophomore or junior year. Keep your eyes open, talk to profs in your major, and look for additional funding, For example, my state, Ohio, has a Science, Technology, Engineering, and Medicine program that is providing money for students in these fields to encourage more science majors. The school should know about these programs but sometime you have to ask and really seek them out because they don’t always do a good job of advertising these programs.</p>

<p>I understand your concerns because I am in the same boat. You worry that the first year you’ll get through but what about the next three? One dollar over the cutoff and there goes the Pell. At least you are proactive and looking at how your own actions can impact your FA. Good luck!</p>

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<p>Thanks for the advice. I plan living on campus this year and next, but living in an apartment for my junior and senior year. At my school you can’t be an RA until you are a junior.</p>

<p>The problem with getting scholarships by specific major is that my major is brand new (I will be the third graduating class with it) and therefore are no scholarships attached quite yet. However, I am double majoring and maybe can get some for the 2nd major.</p>

<p>I hope to be eligible for the Pell all 4 years there. My dad can’t get a job and I don’t see my mom’s income going over $40,000 tops, which would still leave us Pell-eligible I believe. The only thing I am worried about is my own income pushing us over the Pell grant threshold.</p>

<p>Oh well, I guess I gotta take it one year at a time. I am doing ok now though as it is going to cost about 20k each year and I at least have my first year covered, so that leaves me with 60k to go. Plus I have a 5k a year scholarship so that leaves me with 45k. I guess I am luckier than most in that regard. I guess I just have to work really hard on finding scholarships for second-last year :). </p>

<p>Thanks again all!</p>