<p>Cars and homes have not been collateral for quite awhile. Very few banks are giving you a reasonable loan for a car which is strictly a depreciating commodity, while homes are a joke. You may have equity in your home, but the banks already know that you are losing 1/2% a month on your equity and never mind what you lose on a simple return if you had cash invested instead of equity , again in a depreciating asset. Try getting a HELOC these days.
My complaint is that we are unable to get a reasonable loan for my D, and must consider alternatives including decimating our savings for her to attend a good college. We already have scholarships (merit), need based aid is out of the question, and she does plan in following her brother’s footsteps.</p>
<p>My complaint is that we are unable to get a reasonable loan for my D, and must consider alternatives including decimating our savings for her to attend a good college. We already have scholarships (merit), need based aid is out of the question, and she does plan in following her brother’s footsteps.</p>
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<p>Since your D is already a senior, unless she takes a gap year, you’re pretty much stuck with whatever her schools determine her aid to be.</p>
<p>As for sending your D to a “good college” which involves large debt and/or decimating savings, it all depends on what you’ve decided that a “good college” is. Many state schools have good engineering programs. </p>
<p>And if your D’s stats are strong (which you’d hope an engineering major would have), then there were schools that would have offered her very large merit scholarships which would not have left you in this dilemma. I know that you said that she has some merit offers, but if they’re not large enough to make serious dents in the cost, then they’re just going to get applied to “need” and they aren’t going to reduce your EFC. Sending kids to pricey schools is always a choice…and a luxury choice.</p>
<p>What state are you in? What were your D’s GPA and ACT/SAT score? </p>
<p>And…yes…cars and homes are “collateral”… You can lose your car or home if you don’t make the payments…most people do not want their cars/homes taken away…so they pay and pay… NO ONE can take a college degree away from you if you don’t make student loan payments.</p>
<p>You refile for FA next year anyway, so if the bonus was one time in 2011 it won’t show up on 2012 tax return and your aid profile will be better for 2013-2014 school year. It’s not as if your aid for the entire 4 years will be skewed by the bonus.</p>
<p>^^^</p>
<p>The OP realizes that. However, if they’re given a high “family contribution” this year (which it sounds like they will get), the OP has indicated that they don’t have the money to pay it. This is a family that has just gotten itself out of debt (thru the bonus), it would be crazy for them to turn around and borrow - say $25k+ - just to pay a one year high EFC. That just puts them back into debt…so not really getting any benefit from having just paid off past debts with the bonus.</p>
<p>Deferring admission and refiling for aid NEXT year is certainly worth $25k or so!</p>