<p>I've been helping a family whose daughter is to attend UCSD this fall and this past week both parents (they were employed by the same company) were laid off.
I'm not totally familiar with all of the financial aid ins/outs. Particularly for the UCS. There is a form online for appeal of financial situation but it seems to me that FAFSA for 2008 is based on 2007 income. The FAFSA they already filled is accurate for 2007. When they file the FAFSA for the child's sophomore year the lackof income in 2008 will be reflected in their taxes.
Am I missing something here? Should they fill out the loss of income/employment form before she attends in September of 2008? </p>
<p>Second question: they were intending to use home equity loans to pay the gap between a small scholarship and Stafford loan amount. (They do not have savings to pay for college...I know...not a very smart move). </p>
<p>They are now reluctant to use home equity loan since they may not be able to find work in their current location. Additionally home values in that area have been dropping. </p>
<p>I have been reading about PLUS loans and have seen conflicting information about whether or not they have to be paid prior to the student graduating. </p>
<p>Gosh, Ebee, that is a tough situation. What they need to do do is to fill out the form and if at all possible go and talk to the financial aid officer. Unless the school is able to cough up some additional fund, it is not a good idea, in my opinion for them to take out loans of any kind, including the home equity loans unless they are in good financial shape which does not look like the case.</p>
<p>Yes, PLUS loan have repayment beginning very soon after the funds are disbursed and though they do not have to be paid prior to the student graduating, they have to be paid over 10 years with payment starting within that school year. There may be possibilities of deferrals; they have changed the rules so many times that I can't keep track. They can look at the terms of the PLUS loans, particularly the monthly payment they will be incurring for the year, and decide if they can take on that type of debt and repayment at this time. How much is the gap?</p>
<p>Otherwise, it may be a wise move for the D to take a gap year and reapply for next year to a number of schools if UCSD permits this for an array of financial option or go to UCSD next year. She can work and take a community or local college course or two during the year which may shorten her time at college which would be a money saver. </p>
<p>I know that this is disheartening. We had some family crises a few years ago that really made us change our philosophy about college for our kids. We have always put college waay up there in terms of priorities for our families. We had some reality checks that made it quite clear that college is not the end all of importance to us as a family, and it now has a whole different place in the order of things. I wish, oh how I wish, that I could pay for whatever school my kids want without endangering other family priorities, but I know that is not the case here.</p>
<p>cpt, totally agreed. Even before the layoffs I advised the parents to send their DD to community college, particularly since she wants to pursue graduate education and eventually become an MD. Unfortunately, they just weren't hearing it.<br>
I still don't totally understand the PLUS loan...it has to be paid prior to the student graduating or it can be paid after the student graduates??
Sorry for my ignorance, my own family wasn't eligible for any type of PLUS or subsidized Stafford loan so I don't really know the rules...
The Mom did speak with a FA officer at orientation recently however she felt she was rushed and that the FA officer would only answer her questions...assuming that she knew what questions to ask..which she did not.</p>
<p>Ebeeeee-
Here is info from ucsd fin aid site:
Federal Parent Loan (PLUS Loan)
Amount: The annual maximum equals the cost of attendance minus any need-based and non-need-based aid.</p>
<p>Need-based/ subsidized? No.</p>
<p>Funded by: A PLUS lender you and your parent(s) select from the UC lender list. Carefully review these benefits and repayment comparison charts before you select a lender. See UCSD's Guide to Choosing a Lender.</p>
<p>Disbursed by: Lender disburses to UCSD.</p>
<p>Interest rate: 8.5% fixed</p>
<p>Loan fees: 3% origination fee, and a default fee of up to 1%</p>
<p>Repayment of principal and interest begins 60 days after the final disbursement of the academic year.</p>
<p>For parents borrowing the Parent PLUS loan:</p>
<p>Apply for the loan through a selected lender.
Complete the PLUS Loan Request Form and submit it to the Financial Aid Office.
Sign and return a Master Promissory Note provided by the lender. This document confirms your agreement to repay the loan.
Other information: Eligibility is limited to parents (with no adverse credit history) of a dependent student.</p>
<p>If the Parent PLUS loan is denied, contact the Financial Aid Office for other possible options.</p>
<p>(I understand these options to be that an additional stafford loan is offerred if lenders refuse to extend a plus loan to the parent). </p>
<p>Thanks all. I will pass the information along. I think they are going to have to go with a PLUS loan for the entire 18K per year gap. The issue is going to be how they are going to pay it back.....
This is a family in for some hard choices, clearly.
I still have a question regarding the change of circumstance financial aid form. The form talks about 2007 income changes. This event occurred in July 2008. The form states clearly you cannot fill it out until 16 weeks after the event. Therefore, the form is really going to be about 2008 finances which will be in the FAFSA for the following school year.
Correct?</p>
<p>The parents should call the FA office immediately, both with questions about how to fill out the form, and to set an appointment to talk with an FA officer, in person if possible. Trying to discuss a complex financial situation during orientation, when the FA officer has to give attention to all the other parents as well, is not productive.</p>
<p>Yes, the loss of income will be reflected in next year's FAFSA, but that doesn't mean that the school can't do anything now. They may simply need another form.</p>
<p>I agree with Chedva. Basing this year's FA on 2007 numbers is predicated on the assumption that that income continues. A college FA office can change the numbers and their award based on unusual circumstances. This could give them more aid. They need to contact the office and talk to someone in detail, and as Chedva said preferably in person, ASAP. This could certainly qualify as extraordinary circumstances. They should not assume the aid won't change. They are not appealing; they are reporting new, materially changed, circumstances. Can't promise anything, as it is a state school with limited funds, but they should certainly pull out the stops trying.</p>
<p>Yup. This is exactly the sort of circumstance that was envisioned when college financial aid officers were given the ability to apply "professional judgment" to make changes to the FAFSA data points. With both parents losing their jobs, and their income, through no fault of their own, the 2007 income reported on the FAFSA is no longer a reasonable estimate of 2008 income.</p>
<p>I'd be surprised if the financial aid officers didn't make an adjustment that resulted in increased aid. Aid packages for the 08/09 UC school year are still being awarded (we've not received notification of our aid offer yet), so the time is right to make this appeal now, while funds are still available.</p>
<p>I was laid off in Feb of 06 and my daughter had just been accepted to Vandy. When we received the FA offer I called them. I submitted a letter along with the appropriate documentation and they made some adjustments based on the loss of income. It wasn't like they picked up all the tab but it beat a sharp stick in the eye. I think it may have totaled a couple of grand that would have been EFC that got put into some other areas.</p>
<p>Will both parents be eligible for unemployment? Will both or either receive a severance package?</p>
<p>Those will be the first questions asked by an FA officer -- since unemployment and/or severance packages will replace income. Make sure they apply for unemployment and if they are turned down, keep the notification (I needed it when I applied for aid when my husband lost his job).</p>
<p>hsmomstef,
Yes...that is on the form and I tried to explain it to the mom of the student. One received a $17K severance package and both will be eligible for unemployment. The form specifically asks about both.<br>
Truthfully the real issue in my mind is that they didn't save anything, and assumed they could borrow against their house or take out loans. Now without viable income they are worried about their ability to borrow.</p>