I recently resigned from a very well-paying job to begin writing (a lifelong dream). This decision was made after careful consideration of my finances and the pending costs of sending two kids to college. My first child is a high school junior this fall, and will attend college in fall 2017.
Though there is no income at the moment, I do have considerable assets. I have significant retirement savings, investments, as well as a state-sponsored college savings plan that should cover the flagship state school costs. My question is, if my daughter goes to a private school or an out-of-state school, will need-based aid be out of the question because of my assets? The state-sponsored college savings plan will probably only cover half the cost of an out-of-state public school or an elite private school. She has great stats - good enough for elite schools but those those schools do not offer merit aid so there will be a significant shortfall.
Anyone out there have experience/insight with a situation like mine? Should I counsel my daughter to only look at state schools to play it safe? Should I jump back into the work force?
Look to see if you qualify for the simplified needs test. If yes, then for the FAFSA EFC your assets will not count. In that case you might qualify for a Pell grant and state grants. For the CSS Profile, the assets will count.
I would not write off private schools but focus on schools that give merit for your child’s stats. For elite schools that only give need based merit you are likely to be full pay. Many OOS state school see OOS students as cash cows and will give little FA to OOS students.
Schools expect the family to pay at least the FAFSA or the EFC they calculate based on the CSS Profile. Since most schools do not meet full need, they will gap.
OOS publics generally do not give need-based aid. They charge high OOS costs for a reason…you don’t pay taxes there. They don’t generally then cover OOS costs will need-based aid.
However, some give merit scholarships for high stats.
noname87: It sounds like I’m on the hook as “full pay” for any school she chooses, except where her stats will qualify her for a full-ride – place like Alabama, which is really not on her radar at all.
She fell in love with Wellesley when we visited it last spring. Also topping the list: UCLA, which would be out-of-state for us. Her stats are good for both schools. Unfortunately, both would drain the college fund, and I would still need another $20-$25K to clear the full-pay sticker price. The non-custodial parent has stated he will not contribute to college tuition/fees.
I’m not adverse to taking out a loan – should I take it out of my IRA? Second mortgage?
What would you suggest, if in worse case I have to be full pay?
I’d suggest she go to her in-state flagship, or someplace like Alabama where she may get large merit. Don’t drain your retirement or home equity. Going to be blunt, because there is a non-custodial parent who won’t pay, your timing for quitting your high paying job is poor if you want your kids to be able to attend expensive schools.
Is the non-custodial parent paying child support? He may be telling you he won’t pay a nickel, but if he’s got a good relationship with your D, he may be amenable to some sort of help for college.
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The non-custodial parent has stated he will not contribute to college tuition/fees.
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DOES NOT MATTER.
Colleges don’t care if a NCP says “I won’t pay”. Otherwise, NCPs (and CPs) would all declare…“we’re not paying.”
He and new spouse will be required to submit their financial info…otherwise those schools will not process the aid AT ALL. They won’t just use your info. They will say, “we don’t know if your ex is affluent, so we won’t process it at all.”
Schools that give need-based aid consider BOTH parents to be “on the hook” for college. Families are “first in line” to pay.
Sounds like your prepaid will pay about 1/3 of a private. Can you pay the other 2/3 out of other savings? If not, then be sure to tell your DD that those schools will not likely be possible.
“Also topping the list: UCLA, which would be out-of-state for us. Her stats are good for both school”
Then she should also consider USC, which also is in LA , is ranked evenly with UCLA, AND offers hundreds of merits scholarships to top stat students.
USC offers 1/2 tuition national merit scholarships to accepted students who are National Merit Finalists.
SO- Make SURE she takes the PSAT next month- a little prep work, like taking practice SAT tests or studying with Khan academy’s PSAT prep program would not hurt.
Getting a high enough score on that ONE test can mean hundreds of thousands of $$ of automatic merit scholarships.
There is no “auto 0” at CSS schools. that would be for FAFSA-only schools.
Auto 0 is for very low income families who file 1040EZ or 1040A.
Sounds like you have investment income, mortgage deductions, and/or you itemize, so you probably file a 1040c? or something else.
What are her stats?
The UCs would likely cost you $55k per year.
USC has some merit scholarships, as mentioned above. However, unless you’re an accepted NMF, getting an award can be unpredictable. We were surprised when our friend’s DD (ACT 35 and Val of her class) got NOTHING from USC. She ended up going to MIT at full pay.
Your DD needs to take the PSAT next month. Did she take it last year? What was her score?
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except where her stats will qualify her for a full-ride -- place like Alabama, which is really not on her radar at all.
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lol…Bama is often not on many students’ radar. (I can’t tell you how often I’ve heard THAT!!) But, once visited and budget considered, it often becomes a fave choice school. It has a drop-dead gorgeous campus, state of the art facilities, amazing dorms, and very good academics. A visit usually sells the school.
I’ll be blunt. Go back to work. Negotiate an 80% time job with 75% pay. Good deal for them, OK deal for you. Spend one day a week writing. Reassess after the elder child’s Freshman year. If it’s working- great, stay with it until they’re done. If it’s not working, take a pause and reconfigure.
I will state upfront that I am risk averse (point A) and that I have seen so many “I will live off my investment” plans fall apart that I could write a book (but you’re the writer, not me). I’ve seen early retirements which ended up with an early alzheimer’s diagnosis (kids trying to fund an assisted living facility without liquidating the entire portfolio- and this is a diagnosis where you might have 25 years of non-covered medical and nursing care); Parkinson’s, MS, sports injuries, etc.
I say as long as you can earn a hefty paycheck and your kids are not fully launched, pay it forward by getting that hefty paycheck. If you are healthy you will still have time to write (and if something terrible happens you haven’t increased your loan burden or started to sell off your assets prematurely), but your kids only get one crack at a BA.
If you were living paycheck to paycheck, that’s a different story- then you sit the kids down and tell them that you’re going to help them find a commutable campus where they’ll get merit aid and your gift to them is paying the utilities and not charging them rent.
But if you’ve made a lifestyle choice which is now going to constrict THEIR choices- or put you in a risky spot for your elder years, I say go back to work.
To me this is a no-brainer, especially if the bio-dad is truly out of the picture and checked out permanently.
UCLA is FAFSA only but they won’t give you any aid, so $55k. Virtually all the privates will at least need the father to fill out the CSS profile and they will base the aid on the combined income and assets.
Your retirement funds won’t be assessed. I don’t think you can expect this forum to give you jobs or financial advice. Just to answer questions about how it works. Sounds like she needs to be on a merit hunt. There are a lot of LACs which are very nice and do give merit. Wellesley is not one but Mt Holyoke, for instance does. I think you can run the NPC and even get a merit estimate. You could get more on application but that will at least give you something. There are also lists of colleges with competitive merit aid, open the threads pinned at the top of the forum.
