Non-Custodial Parent Contribution Penalization

Paying for College
1

<p>Hello! </p>

<p>I'm a senior trying to choose between two schools- OSU and Case Western. My EFC is $13,000. Case is my first choice and I would absolutely love to go there. However, I have nearly $15k not covered by financial aid at Case. If I had the same PLUS at Case as the one offered at OSU, that gap would be 11k. At OSU, I have full funding my freshman year (10k in scholarships, 5.5k studen loan, 10k PLUS). My next year I only have $3,000 in scholarships at OSU because my 7k scholarship is only a one time deal. My dad and stepmom are also on track to make even more this fiscal year so I'm guessing my FA offer at OSU will have a 8k gap in aid sophomore year. My mother (NCP) lives in Florida and can contribute up to 10k a year as needed. However, if I accept that contribution at Case my grant (8k) is taken down to 3k and my 6k PLUS loan reduced to 1000. However, I thought my parents could take up to the remaining cost for a PLUS, so could I still have my dad take out the amount he wants or is it different at each school?</p>

<p>Is there anyway I can get around being penalized for my moms contribution? I will also be working two jobs this summer and save up a large portion (around 5k), but yet again it will count into my assets weakening my FA. I would really like to go to Case but I can't appeal my FA as I never applied to a similar school, on top of that my dad and stepmom have no savings and limited disposable income despite making nearly $120k a year together.</p>

<p>Thank you! I greatly appreciate the help :)</p>

2

<p>You do not have “full funding” at OSU. Your parents are being asked to take a $10k plus loan.</p>

<p>Case is significantly more expensive than OSU.</p>

<p>You are not being “penalized” by having a mom who earns enough to contribute to your college. Case uses the Profile and requires the NCP form. Thus the contribution from your mom. OSU uses only the custodial parent (it’s a FAFSA only school) so your NCP income and assets were not factored into the award.</p>

3

<p>You don’t need to have applied to a similar school in order to appear your financial aid award to Case.</p>

<p>Contact the Case admissions office and find out who your admissions officer is. Then speak with that person and explain that Case is your first choice school and you would attend . . . if only it were financially feasible. Ask for his help. Even if he can’t help you himself, he’ll be able to point you to the person in the financial aid office who might be able to help you.</p>

<p>Good luck!</p>

4

<p>Could you post the specifics of each school’s aid package?</p>

<p>Total Cost of Attendance, Grants & Scholarships, Work Study, Student Loans, Parent PLUS loans.</p>

<p>Someone may be able to help with the bottom line of cost at each school with that information, and make suggestions on how to appeal/ proceed.</p>

5

<p>"…I thought my parents could take up to the remaining cost for a PLUS, so could I still have my dad take out the amount he wants or is it different at each school?"</p>

<p>Does your dad even know that OSU is expecting him to take out a $10,000 loan for each year of your education? Talk that through with him. Find out exactly how much he and your stepmother are ready, willing, and able to pay out of pocket, and whether or not they also are ready, willing, and able to borrow money for your education. OSU might not be affordable for you.</p>

<p>Do you have any other options besides these two, and what would those cost your family?</p>

6

<p>I applied and was accepted to four schools. Our EFC is $13,047. Here’s my financial aid at them all:</p>

<p>OSU
CoA: $25452
Provost Scholarship: $3000
Fawcett scholarship (only for freshman year): $7000
Federal subsidized loan: $2825
Federal unsubsidized loan: $2675
PLUS: $9952</p>

<p>Case:
CoA: $57,928
University scholarship: $20,500
University grant: $8,000
Federal Work Study: $2,000
Federal Unsubsidized loan: $2,000
Federal Subsidized loan: $3,500
Federal Perkins loan: $1,000
PLUS loan: $6,110</p>

<p>Ohio University:
CoA: $25,442
Gateway scholarship: $2,000
Russ Vision Scholarship: $4,000
Federal Subsidized loan: $3,500
Federal Unsubsidized loan: $2,000</p>

<p>University of Akron (Honors College)
CoA: $21,934.48
Scholarship for Excellence: $5,000
Honors Scholarship: $3,000
Federal Unsubsidized Loan: $5,500
PLUS Loan: $5,978</p>

<p>My dad is undisciplined when it comes to spending. He would have a very hard time setting aside $13,000 a year, which is why he wants to do PLUS. I still don’t understand his reasoning exactly. His credit is also not great so he would have a hard time securing outside loans. My parents have no clue what to do about the whole situation. I bought them How to Pay for College Without Going Broke and they never even opened it. Not only am I lost but I have no guidance from my parents. My dad is adamant on me attending OSU. However, I try to reason with him in regards to PLUS loans and what will happen after my freshman scholarship is gone. He won’t even listen to me. I do not want them to have $40,000 in PLUS loans and all the interest built up over my four years. </p>

<p>Thanks for all the replies! And thanks dodgersmom, I will contact Case next week.</p>

7

<p>As for your question about Plus loans. Your parents can take a Plus loan for any amount up to COA minus any other aid. So, if a school costs $40k and you get $20k in aid, then they can take a $20k Plus loan (if they qualify).</p>

<p>Are you sure that your NCP mom will pay $10k per year? If so, then consider that like a scholarship. IF so, then how much will your dad have to borrow each year? And can he pay ANYTHING out of current income?</p>

8

<p>Well…if your dad takes those PLUS loans, he will amass a pretty sizable loan debt which he will have to repay.</p>

<p>Unless I’m reading this incorrectly, you also have your EFC to pay. Even with the aid you posted and the Plus you posted, NONE of these amounts add up to the cost of attending these schools. Where is the REST of the money coming from?</p>

<p>Which of these schools is affordable for ALL four years for your family? Case is double or more the COA of the others. That one seems too pricey if you are looking for a lower price tag.</p>

9

<p>OSU looks like it is a real possibility:</p>

<p>OSU - Year One
CoA: $25452
Provost Scholarship: $3000
Fawcett scholarship (only for freshman year): $7000
Federal subsidized loan: $2825
Federal unsubsidized loan: $2675
Mom: $10,000</p>

<p>Funds available= $25,500 and does not include a penny from dad or work contribution from student for first year.</p>

<p>OSU - Years Two thru Four
CoA: $25452 (probably a little higher each year)
Provost Scholarship: $3000
Federal subsidized loan: $2825
Federal unsubsidized loan: $2675
Mom: $10,000
Dad: $7,000 (PLUS, to replace freshman scholarship)</p>

<p>If the Dad is able to contribute anything out of current income and/or the student can work and contribute, the amount of PLUS loans in years 2 to 4 can be reduced.</p>

10

<p>Year 2 Direct loan is $6500. Years 3 and 4 are $7500. Factor in an increase in the cost of attendance too.</p>

11

<p>First of all, let’s get a good understanding as to what PLUS is. PLUS is a program from which a parent can apply for loans if there is a child in college. No guarantee that the parent will get the loans, by the way. So a school cannot AWARD PLUS, and they really have no business putting it into the financial aid package. A parent can apply for a PLUS loan and if approved (there has to be no 90 outstanding late notes in the credit report) s/he can borrow up to the full COA of the attending school minus any other financial aid awards and scholarships. Any parent who meets the credit requirements can do this. No need is necessary. Someone who makes a million dollars can borrow the whole amount of his kid’s college cost less any scholarships or other federally backed loans already taken out for it.</p>

<p>For Case, I would think that your mother had to complete a NCP form for PROFILE as they do require that, or you got a NCP waiver for her. If she did file as a NCP through PROFILE, her contribution is not going to hurt you one bit for next year’s aid. It would be great if she paid that $10K this year for you. You would then not have to take out unsubsidized loans and your father would not have to take out PLUS either.</p>

<p>I think you are wise in your wariness about the OSU grant. If there is no assurance it will be replaced, you could be in trouble in following years. OSU makes no guarantees about meeting need. Are your Case awards based on need or are they merit driven?
Congratulations on some nice choices.</p>

12

<p>Ok. Attempting to work in Thumper’s corrections. Assuming 5% increase in COA each year.</p>

<p>OSU - Year One
CoA: $25452
Provost Scholarship: $3000
Fawcett scholarship (only for freshman year): $7000
Federal subsidized loan: $2825
Federal unsubsidized loan: $2675
Mom: $10,000</p>

<p>OSU - Year Two
CoA: $26725
Provost Scholarship: $3000
Federal subsidized loan: $2825
Federal unsubsidized loan: $3675
Mom: $10,000
Dad: $7,225 (PLUS)</p>

<p>OSU - Year Three
CoA: $28061
Provost Scholarship: $3000
Federal subsidized loan: $2825
Federal unsubsidized loan: $4675
Mom: $10,000
Dad: $7,561 (PLUS)</p>

<p>OSU - Year Four
CoA: $29464
Provost Scholarship: $3000
Federal subsidized loan: $2825
Federal unsubsidized loan: $4675
Mom: $10,000
Dad: $8,964 (PLUS)</p>

<p>CoA may go up by more than 5% each year but it is also reasonable to figure that Dad can contribute SOMETHING out of current income each year and student can work. Also, some areas of CoA are in students control and may be able to be reduced, especially after first year.</p>

13

<p>Be aware that if your Dad’s credit is bad, he can get turned down by PLUS. He can’t have outstanding debts over 90 days, I believe, on his credit report. </p>

<p>I’m also interested in knowing why you think you get penalized for your NCP contributing to your education.</p>

14

<p>At Case, OSU, and OU about $3,000 of the CoA is living expenses, books, and transportation, which I am more than willing to contribute from my savings.</p>

<p>My mom never completed the NCP form (I actually didn’t even know about it until a few days ago). Technically she doesn’t have a job anymore (by choice). She helps out a bit for my stepdad’s company occasionally but is not paid directly for her work. Anyways, she just stays at home most days. She has full permission from my step-dad to take money out of their joint savings to contribute to my education, up to $10,000 a year.</p>

<p>My dad and especially my stepmom’s credit problems come from previous debt issues. My stepmom had a foreclosure 4 years ago. It is mostly my stepmom’s credit I’m worried about. No recent late payments or outstanding debts though. They can contribute approximately $6,000 or $7,000 out of their paychecks each year. The rest would be through loans. I can contribute approximately $4,000 or $5,000 a year from summer work savings.</p>

<p>To answer cptofthehouse, my awards at Case are both merit and need based. Scholarship is merit-based, the rest is need-based.</p>

<p>Should I contact Case about my NCP form? I am very wary about OSU as it has a reputation around our area of being very stingy on financial aid. My dad and stepmom are convinced I can find a scholarship to replace the freshman scholarship, but I really don’t want to take the chance.</p>

15

<p>Whoa, there. Doesn’t case ask for a NCP with the PROFILE? Did you answer questions pertain to her accurately? Honey, I don’t know if I even want to get involved with jar of worms. </p>

<p>Usually, schools that require PROFILE, which I believe Case does, require a NCP form or waiver. If you answered the questions correctly—that there is a bio mother alive, Case would have required a NCP form or waiver regarding your mother. I don’t know what to advise you as I am just a mom and I am not getting a good feeling about this. </p>

<p>The NCP form will want your mother’s information just as it asked about your parents’. Your other schools do not require PROFILE, so this won’t come into play with them, just Case. And it is highly likely, unless your mother is very low income, that the need package will be recomputed with her income and assets, plus if she’s remarried, her spouse’s. You say, Stepdad, so he will be dragged into this too, all of his income and assets, and if substantial can zero out your Case financial aid.</p>

<p>Only one parent needs to apply for the PLUS, not both of them. So your stepmother’s credit will not come into the picture unless there are any bills outstanding in your father’s name, if your father is applying for PLUS.</p>

<p>Talk to OSU’s financial aid office about that grant and what usually replaces it in future years. </p>

<p>Your mother can pay for the gap that OSU has and your dad will not have to borrow. That PLUS is 8% interest. Your mother can lend you the money and forgive it after graduation. If she can do this, it would make life a lot easier.</p>

<p>You need to do some research on Case and what your situation is. Unless your aid is mostly merit, you can have a problem here with unreported NCP in the picture. The pure merit part would be fine but if one of those Case grants is need based, I think you will lose it. You’ll get to keep the Stafford, and I don’t know what they will do with the work study and the Perkins.</p>

16

<p>On the CSS, we calculated her contribution to be 0. She never mentioned contributing anything to my education before that point and it was assumed she wouldn’t. Case does not require the NCP form. </p>

<p>Thanks for the reply cptofthehouse. I’ll take all of it into consideration.</p>

17

<p>If Case does not require NCP forms, then you are fine. Your mother can lend you the money which would help out your dad and step mom. That 8% interest on PLUS is a killer.</p>

18

<p>I greatly appreciate all the replies and help!!</p>

<p>Tonight my dad and I decided on OSU. I’ll be visiting on the 19th and I’ll pay my deposit later this week when I get my paycheck.
I think it is a great choice and I always can go to Case for grad school. My dad also doesn’t want to have a $10k PLUS and will want to maybe do a $5,000 PLUS, pay $2,000 out of pocket and then have me contribute $3,000 for the student expenses. I’ll try to find a 10 hour/week job throughout my first year. The next year my mom might contribute some or maybe get me a car if I do move off campus later. It is too early to think about that though. Having the weight off is so relieving. </p>

<p>Thanks for all the advice! :)</p>

19

<p>Congratulations! It’s a grand school. I’ll think you’ll like it.</p>

20

<p>OSU is a terrific school, and Columbus a great college town. Congratulations!</p>