'No loan' as financial aid - what's the catch?

Paying for College
1

<p>I'm planning ahead for my daughter of 14. The real story is that my wife and I will be having more kids and we plan to have her stay at home. As such our income will drop to the $40k range, which meets all of the 'no student loan as financial aid' college criteria, except perhaps Michigan State Universities 'federal poverty line' threshold.</p>

<p>As I'm playing around with the FAFSAcalculator, I'm estimating expected family contribution as $750ish, and institutional methodology showing an additional $1,000 student contribution (if my wife quits her job). Complicating things are that we have our home completely paid for, roughly a $165,000 asset, but these calculators seem to show that the Federal Methodology doesn't care about that, and the institutional methodologies ignore it as long as I'm making less than (around) $45,000 (which I am) So...</p>

<p>Question #1)
So if cost of attendance to, say, Harvard or MIT is, $50,000, are they essentially saying that if you are low enough income (and can get accepted) $50,000 - $1000 - 750 =$48,250, which will be met entirely by grants or work study?</p>

<p>Question #2)
What other costs aren't included here? Room and board? books? apartment? Obviously misc expenses will be out of pocket for my daughter and us, but I'm trying to understand what I'm missing, if anything.</p>

<p>FWIW, my wife works for a college, and we'd be giving up 50% discount on tuition if she gives up her job, besides a bigger salary than mine, 401k matching, and the rest.</p>

2

<p>“we plan to have her stay at home”</p>

<p>“we’d be giving up 50% discount on tuition if she gives up her job, besides a bigger salary than mine, 401k matching, and the rest”</p>

<p>I assume you have considered staying home instead. :)</p>

3

<p>You’d assume correct. But alas, it was not to be.</p>

<p>In short, the world is not ready to accept an able bodied man intentionally quitting a job to stay home to raise his children. At least not the world I live in. I also live next door to HER parents, which would be a constant source of irritation two households.</p>

4

<p>

</p>

<p>LOL! I do know several SAHD’s, well actually they telecommute, and it’s a great thing as they’re very involved with coaching and other of the kids’ activities…works great for those families. The second part I totally agree with…the older generation could be making disparaging remarks ad nauseum if they couldn’t get past the idea of what a “normal” family does. Perhaps her college would consider allowing her to telecommute a few days a week or offers job-sharing? If not, it might be a good thing for them to consider!</p>

<p>Anyway, many of the no/low loan schools expect a student contribution (from summer work, etc.) of several thousand dollars a year and this may increase as they get older. Obviously, getting accepted to one of the very selective schools who offer such generous packages is the first hurdle to overcome!</p>

5

<p>I can appreciate the point of student contributions; most of what I’ve seen has been in the $2500-$4500 range per year, which is easily doable. I’m concerned more about a $25k-$45k bill.</p>

<p>I’m actually far less concerned with her getting accepted to these institutions than how to pay for them. So to question #1 and #2 - could someone point me in the direction of what I’m missing.</p>

6

<p>I wouldn’t quit your job on the assumption that that aid money will be there.</p>

<p>My cousin is a single mom with three kids (same dad). She has ONE asset of under $20k. She has NO income above what she counts as child support (she and longtime partner, dad to all the kids are not married).</p>

<p>She qualifies for ZERO financial aid. (2009)</p>

<p>My mom was a single mom, had a mortgage on a house smaller than yours, two kids.</p>

<p>I qualified for ZERO needs-based grants (1995)</p>

<p>My sister worked full-time and was independent when she was going to school.</p>

<p>ZERO.</p>

<p>My cousin asked about this. How could that be?!?! She asked. Who is poorer than me?</p>

<p>The financial aid officer replied that most people lied.</p>

<p>I would absolutely not quit a job. If you have any income <em>or</em> assets (need not be both) whatsoever, your chances of qualifying for need-based aid are next to nothing.</p>

<p>It really, really sucks. I’d have her join the ROTC. Now that’s a sure thing.</p>

7

<p>Where most of the 100% need met schools are concerned, they are talking about the full cost of attendance - tuition, fees, room, board, books, transportation, etc. There are a handful of schools that exclude transportation and personal expenses and currently 3 that also exclude books and supplies. You can see the full list and qualifications/exclusions here:</p>

<p>[Project</a> on Student Debt: Summary of Pledges: Eligibilty Guidelines and Basic Provisions](<a href=“http://projectonstudentdebt.org/Type_and_Coverage.vp.html]Project”>http://projectonstudentdebt.org/Type_and_Coverage.vp.html)</p>

<p>Although you’re assuming your D will be accepted to the school of her choice, you’ll definitely want to have a plan B unless your family name happens to be on one of their buildings!</p>

8

<p>Oh, and how to pay for it without loans?</p>

<p>You are rich, or you get loans, or you don’t go. That is the whole story. You are not missing anything at all. That is the reason there’s a student loan crisis in the US right now. There is a reason people are talking about a class system in the US. Don’t get me wrong. I know poor kids who’ve gone to Harvard.</p>

<p>She should do CC, ace it, go to an awesome state school after working her butt off every summer, get incredible grades, then get a fellowship somewhere really fancy for her master’s.</p>

<p>That, my friend, is how the working class pays for college. :smiley: Lots of people do it.</p>

<p>PS
Did I mention, btw, that cousin qualifies for WIC and has for the past 5 years and still can’t get a penny in grants? Yeah, it’s that bad. Probably the Ivies would give her some of that money, but when I went, I basically got offered scholarships to pay for half the private school cost… which was four times that of a state school. No-brainer–I went to state school and loved it. I’m sooo glad I didn’t waste my money on a brand name when I found one of the best unis in the nation for undergraduate phil. in my own backyard at a fraction of the price.</p>

<p>I was able to pay $4.5k/year but graduated with $12k in debt from state uni, paid it off in five years by paying it down hard-core.</p>

<p>I don’t want you to think I’m saying to lower your expectations–but if you look at undergrad programs, there are a lot of state schools that outrank Harvard and Yale. Only Princeton and some lib arts schools come in ahead:</p>

<p>[Best</a> Colleges - Education - US News](<a href=“http://colleges.usnews.rankingsandreviews.com/best-colleges/national-ut-rank]Best”>http://colleges.usnews.rankingsandreviews.com/best-colleges/national-ut-rank)</p>

<p>Outranking Harvard and Yale for undergrad teaching include U Mich, U Virginia, U Cal @ Berkley, and U Maryland and U Vermont outrank Harvard.</p>

<p>On the other hand, they also rate Evergreen as one of the best teaching colleges in the West, which if you have been there, wow, just… wow. How it could possibly outrank UW is beyond me. But that just goes to show how much stock to put in those rankings!</p>

9

<p>You’re not missing anything. There are a handful of schools that are That generous.</p>

<p>But you do need to understand that if she’s white or Asian, not an athlete or legacy, chances of her getting into one of these schools is remote. In three years all of those schools are likely to accept under 5% including the hooked candidates. That makes an unhooked kid’s chance akin to winning a lottery.</p>

<p>So if she’s a good student, say one likely to get into a school accepting 15% which takes some prowess, expect modest loans and to perhaps have to give up 5.6% of your home equity each year, but it should be doable.</p>

10

<p>“if she’s white or Asian, not an athlete or legacy, chances of her getting into one of these schools is remote”</p>

<p>Not to mention getting financial aid if you’re a middle-class light-skinned kid who has not already won the Nobel Prize.</p>

<p>“So if she’s a good student, say one likely to get into a school accepting 15% which takes some prowess, expect modest loans and to perhaps have to give up 5.6% of your home equity each year, but it should be doable.”</p>

<p>Or depending on your state, go to state university and use the time to kick butt and be able to work a part-time job on the side as well. Most jobs earning a lot of money nowadays require a master’s anyway, so save the Ivies for the master’s and go to the best state school you can afford without taking a second mortgage. It’s not like she’s going to pay those loans off any time soon with just a bachelor’s.</p>

11

<p>

</p>

<p>By the time your 14 year old goes to college, the cost will be over $60K per year…that’s my guess…at these schools. And you SHOULD be worried about her chances of acceptance as these schools deny acceptance to about 90% of the students who apply and in that group are a lot of very well qualified applicants. So…hurdle ONE is for her to get accepted at one of these tippy top schools with the terrific aid. </p>

<p>

</p>

<p>The college Cost of Attendance includes room/board/tuition/fees/expenses. Any “discretionary spending” (things like trips and the like) would not be included.</p>

<p>

</p>

<p>Does your wife’s college also participate in Tuition Exchange whereby your kids would be eligible for tuition reductions at MANY other colleges? It sounds like you are giving up a lot of benefits to add to your family. Of course this is your personal decision. But you do need to weigh the benefits vs. the losses of you wife not working. In addition to her income, and the college perks, she will also lose some retirement contributions that may be very much needed in the future. </p>

<p>It sounds like you are counting on your daughter (and future kids) being accepted at a school that guarantees to meet full need. While this may happen, there are no guarantees that it will. </p>

<p>Many people here have two parent workers in whole or part to pay for college. It’s expensive and the costs will only increase as the years go by. As long as you understand there are NO guarantees that your daughter will GET this extensive college aid, then fine. BUT plan on the “what if”. What will you do if she does not get into one of these colleges. What will you do if you have to pay the cost of attendance at one of your public universities (the costs for THAT could be over $25K per year). Can you do that?</p>

12

<p>ZeeZee, those schools guarantee to meet 100% of need for ALL students. Race and income class doesn’t matter. Thanks to those huge endowments! Middle class kids who have high stats often find that going to one of the private schools who offer very good merit aid or very, very good need-based aid can be much less expensive than their own instate public schools. That’s a very good reason to apply to a variety of schools and why it’s not unusual for kids to apply to more than 10 schools these days. “One and done” is getting to be a rarity!</p>

13

<p>sk8rmom, thanks. I see.</p>

<p>I didn’t think they were applying only to those schools… though I wonder, how can I know people whose parents took out mortgages, who worked, and who got scholarships to study at MIT and Princeton, and who still have massive debt?</p>

14

<p>Perhaps they had large EFC’s that they couldn’t afford to pay…remember, these schools all use Profile, not just FAFSA, to determine what the family’s true “need” is. Lots of people have unaffordable EFCs and must borrow to cover that.</p>

15

<p>Right, the parents in debt from sending kids to MIT and Princeton could not afford their EFC, so borrowed. This is common as colleges expect patents to have saved for college and many don’t.</p>

16

<p>I’m with the posters who say you aren’t missing anything but you need to be prepared for you daughter not getting accepted into a school like MIT. I’m not trying to slight your daughter, obviously I don’t know anything about her, but admission to the top schools isn’t like it was 30 years ago when I was applying. It isn’t enough to be at the top of the class anymore, incredibly qualified applicants get turned away in droves. The admissions committee has so many qualified applicants that their job becomes to build a diverse class, and often an offer of admission is based on the unique characteristics an applicant brings to the table.</p>

17

<p>

</p>

<p>Well…you didn’t know ANYONE who got a “scholarship” (which usually implies money that is awarded based on academic merit) to Princeton or MIT. They don’t OFFER merit aid at all…only need based aid.</p>

18

<p>So it appears to be two possibilities. ZeeZee and a few others would have me believe that I may as well resign myself to sending my little genius to a community college and having her work the night shift while transferring to cheapest state school. This doesn’t seem to jive with anything I’ve read, but that’s why I’m here. I’m trying to sift through it all and find the truth.</p>

<p>I don’t know how to ‘quote’ in here, so sorry in advance:</p>

<p>“But you do need to understand that if she’s white or Asian, not an athlete or legacy, chances of her getting into one of these schools is remote. In three years all of those schools are likely to accept under 5% including the hooked candidates. That makes an unhooked kid’s chance akin to winning a lottery.”
***I’ve known some friends that have had their kids get accepted to Harvard and Yale respectively, and nothing they did seems out of the ordinary. 34 ACT, 3.9GPA, some extracurricular. Perhaps its gotten WAAAY tougher since 2000. I’m not trying to put you down, but a lot of your comment sounds like its coming from a bitter place, and perhaps a slightly racist one. I hope I am only misunderstanding.</p>

<p>“.remember, these schools all use Profile, not just FAFSA,”
*****are there any links to where I could play around with this ‘Profile’ program, and see what makes their algorithms tick?</p>

<p>“So if she’s a good student, say one likely to get into a school accepting 15% which takes some prowess, expect modest loans and to perhaps have to give up 5.6% of your home equity each year, but it should be doable.”
***Just wondering, where did 5.6% come from?</p>

19

<p>Thumper is right (as usual), though I’m sure many of their students receive outside scholarships and IIRC they all weren’t no-merit schools in the not too distant past!</p>

<p>The 5.6% is the number that the current EFC (FAFSA) formula uses to assess parent assets above the asset protection allowance. You can find both FM and IM (Profile) calculators on the College Board website. Profile is essentially a data-gathering tool and the schools that require it use it in different ways, unlike the FAFSA which is processed identically for every school. I think Princeton has an aid calculator on their website and that may be helpful to you as well.</p>

<p>I don’t think many are saying your child should not apply to the Ivies but yes, scores and admissions do tend to get more selective over time. That’s why it’s often best to apply widely and plan for the worst. Plus, with a 14 y,o, it can be verrryy difficult to predict what they’ll want and how they’ll perform through the high school years…you’re just entering the teenage zone!</p>

<p>Quoting is easy use [“quote”]insert text here[/“quote”] - but omit the quotation marks.</p>

20

<p>MmeZeeZee,
How did your cousin not qualify for aid? That baffles me.</p>

<p>Cashstore-
Wow you sure are planning ahead!!
I agree with those who saay, if possible, had our wife not quit her job. Depending on what she does she can perhaps jobshare or telecommute or possibly be part time for a while. Thumper is, IMO, the residnet expert of FA issues around here, and she is right that things could look very different in 4 years when your daughter is heading to school. Also, I dont mean to pry, but are you planning to adopt or are you starting from scratch, as it were. What I am asking is, will you have a newborn or perhaps an older child in the house? That can affect childcare issues/plans. Does either your job or hers offer childcare? What about the grandparents next door? Can/will they help?</p>