Sophomore year aid disappointment

Paying for College
1

<p>My daughter is a freshman at Union College and was given loans, a merit scholarship and financial aid based on the fact that our WAGES and SALARY were about $60 000. Unfortunately because my husband lost his corporate job in the recession of 2008, we have taken money out of his retirement since then and in 2012 we took out a great deal for major expenses, $60000. The financial aid director was so kind to me over the phone and told me they would base my daughters need only on the wages and salary and not the retirement distribution.</p>

<p>We have the SAME situation in our 2013 application. Our net income is $120 00 but )HALF is the retirement distribution again. We had overwhelming expenses, help out financially distressed relatives, and had huge medical expenses.</p>

<p>I sent a letter as I had the year before explaining this, and called the financial aid director yesterday to discuss our situation. To my surprise she said they could honor the retirement distribution only once and would have to base my daughters aid package on our net income. I believe she said it was a federal law. Does this make sense? Will we get aid with our net income? My husband is still struggling and underemployed, and if we get no aid our daughter will be forced to take huge loans, and I gather for her jr and sr year too. I do not work because I am at the beck and call of my near-invalid 87 year old mother (she called me twice already this morning and it's only 9 20. What should I do? My daughter is an Engineering major and we know three girls who graduated with Engineering degrees and stepped into $60 000 salaries. </p>

<p>Please advise me if I should email the financial aid director and thank her for taking my call and going into more detail of our helping relatives and our medical bills. I had two surgeries to remove growths, one in my brain! Both of which were thankfully benign. what kind of aid if any comes with a $120 000 net salary?</p>

<p>I am full of anxiety and cannot sleep over this and feel paralyzed? My 16 yr old is 1st in her class(first daughter was salutatorian) and wants to go to Wellesley. And I have an 11 yr old. All three daughters are adopted from China, costing each in the range of $35000 to 50000. Should I tell the financial aid director this. In the yrs following the job loss--and my husband was 57 and 27 years with the company-- of course we used up all our savings before we went into the retirement funds. </p>

<p>One thing is certain, I cannot take her out of Union and put her Ina community college. It would break her heart and give her a major depression or worse. Also my husband says, no way. Are big loans "doable" in scenario like this?</p>

<p>Sorry for the long and clumsy post and I will greatly appreciate responses.</p>

2

<p>I don’t see that there would be any federal laws governing how a school distributes it’s own aid. You can contact them again and explain about the out of pocket medical expenses not reimbursed by insurance for the immediate family. Helping out extended family financially is unlikely to be taken into consideration by the school, schools feel your first responsibility is contributing to your child’s education.</p>

3

<p>I’m sorry for your situation. The college is well within their rights to only honor this distribution issue once time. In fact, many colleges DO make this consideration because it is considered a one time event.</p>

<p>Their view is simply going to be that if you could take $60,000 out of somewhere TWICE, that you should be able to help fund your daughter’s education with some of this withdrawal. </p>

<p>Re your medical expenses…the only consideration would be for unreimbursed medical expenses, not your total bill. </p>

<p>Helping out a financially distressed relative is also a choice. The school could rightfully say that helping fund college should have been your higher priority. Simply put, schools do not grant need based aid so that families can use the money to help others.</p>

<p>I seriously doubt that your adoption costs are going to be taken into consideration. First, they didn’t happen in 2013, and second, that also is a choice you made. I think it’s wonderful that you adopted these girls, but it was a choice you made.</p>

<p>You know…there are LOTS of options between Union College and a community college.</p>

<p>Re the future…if you stop taking money from your retirement accounts, you won’t have that money IN your income calculations for financial aid purposes.</p>

4

<p>Just for your next daughter, don’t let her get her hopes up for an unaffordable college. It is never necessary to attend such a college, just a luxury that some are able to afford and others not.</p>

5

<p>Your daughter should be applying to outside scholarships. There are several for female engineering students. She could also look at SUNY schools.</p>

<p>The adoption costs have nothing to do with college aid, since they took place many years ago. You can’t use prior year’s costs to get aid now.</p>

<p>You are confusing merit aid, which your daughters could have received at many schools because they were 1st/2nd in their classes, with need based aid. There are thousands of students graduating 1st/2nd in their classes who will receive no need based aid at all. Wellesley, I believe, doesn’t give much merit base aid so you’ll have to see if you’ll received need based aid. With 2 in college, it’s likely, but will it be enough?</p>

<p>I also think you should discuss this with your daughter. She may not want to take out loans or put you in debt. She might prefer to transfer to a cheaper (state?) school, and now is the time not in the summer when her choices might be very limited. Sure she may be disappointed, but maybe that’s preferable to years of loan repayment?</p>

6

<p>How much in loans would you need? In other words, how much aid is she losing? According to your other posts, your daughter also had a one time $10,000 grant from a local civic organization for her freshman year. You knew that was not renewable. </p>

<p>I don’t want to sound harsh. We all like to see our kids have their dreams fulfilled. BUT, your husband lost his job in 2008. This is not a new event. It is a five year old event. Union College sounds like it was only affordable IF you received aid based on a $60,000 a year income.</p>

<p>If it no longer is affordable, it’s just no longer affordable.</p>

<p>I would urge you to think of a plan that will get your daughter through graduation. You were able to fund freshman year at Union, but not subsequent years. You could likely qualify for a Parent Plus Loan, but I would caution you to look carefully at your current debts. It is NOT worth digging yourself a financial hole to fund this college choice. Plus you have to qualify for THREE years, not one. That is a maybe proposition.</p>

<p>Let’s say you need $50,000 a year in Plus loans for three years for your daughter to complete her degree at Union. She would have $150,000 in loans to repay…about $1800 a month for ten years. Even with a $60,000 a year job, that will significantly reduce her cash flow when she graduates. A very large portion of her take home pay will be used to make her loan payments.</p>

<p>For engineering, she needs an ABET accredited school…not the more expensive ABET accredited school. There are SUNY schools which would fulfill this.</p>

7

<p>What a mess. First, you need to stop supporting the relatives. Telling Union that you need more aid for your daughter because you are supporting relatives is like telling Union that you want THEM to support your relatives. Your daughter must come first. She may need to take a year off at this point and apply to one of the SUNY schools (if you live in NY; otherwise your own state schools). It stinks, but that is the way life goes sometimes.
You should have seen a year ago that Union was not affordable. </p>

<p>How can you change your own lifestyle so that you can eliminate the need to take out so much from your retirement fund (that the school correctly sees as income)? My husband lost his job two years ago, which cut our income by 40K per year, even with him working outside of his field. It hasn’t been pleasant, but we have survived. Cut internet, cable, land phone, meals out, and a bunch of other things that add up. Also, can your mother afford a home care aid a couple of hours a day to free you up for working at least part-time? I am a 2/3 time professional but I moonlight as a home health aide 20-30 hours in addition to pay college expenses - stinks, but it’s temporary (at least I keep telling myself that).</p>

<p>Your other daughters need to look at schools that offer generous merit scholarships that do not consider financial need.</p>

8

<p>I have a friend who was in a similar situation with 2 kids, 2 colleges and they did not even give the exception once, let a lone twice. The point being that is is not a thing a school is required to do. As Thumper said, it is often referred to as a "ONE " time exception. If you are going to be taking money out of your retirement plan as a something other than the one time emergency raid, it’s considered income regardless of source. So I see where the school is coming from. I’m not sure what the federal rules reference is, as they do not regulate private school money, but it may be that professional judgement to get FAFSA lowered for such circumstances is only permitted ONE time as a a temporary acute emergency that needs to be addressed. Life as it continues isn’t going to be so treated.</p>

<p>My suggestion to you is to do as my friend did with her TWO kids, and even the third. Have her take a gap year. She can study on her own with online things, take a cc course or two to keep her knowledge fresh, help out the family, work , do whatever, and just make sure you DO NOT take out any more money this year from your qualified plans, or plan on a two year hiatus if you feel you want to raid that money. Did the IRS give you a tax break on those distributions? Were they taxed? Are you allowed to replace them. Most likely not,. You got a better break from the college than most other places will give you. </p>

<p>If the medical expenses were unreimbursed and for your dependents on your tax forms, you can appeal that, though mileage varies as to how it is handled. BUt if you are paying for Aunt Jen’s bone marrow transplant, or Grandma who is not your dependent’s hearing aids, you are out of luck. They are not your responsibility as they are not your legal dependents. There has to be a line drawn as to whose medical expenses are taken into account and whose are not. If you had to get a cranio facial necessary surgery, as my friend did for one of her kids, and paid much of the costs out of pocket, showing those expenses, picture and giving the details might get you a break. But non dependents, nah uhn. And believe me, as I have both my mother (poor as a church mouse) and my MIL (not so poor but still getting stuff from us out of pocket unreimbursed) at my house, one at the end stages physically, the other mentally, I can tell you it hits our bank account bottom line. But they are not our dependents so every dime I spend out of our pocket on them is not going to a get a quarter of sympathy in the way of deductions or anything. Can’t use our HSA to buy them glasses or Depends even. </p>

<p>But your surgery, gather all of the bills and info, and send it on in and anything that you paid out of pocket that is not reimbursable might be a consideration. As for what aid you can get on a $120 salary, run the NPC on that at Union calculator. There is a HUGE difference , from what I’ve seen between those pay levels. At some schools, you can get a free ride (Wash &Lee, for example) at $60K and you gotta pay at six figures. </p>

<p>If you think you will be needing more health related costs that are not covered by a high deductible insurance, you might want to think about an HSA for yourself and family. If your DD sits out two years, you can fund your HSA with a further withdrawal from your retirement, that would not be as deadly of a hit tax wise you use those funds next year to pay for such care. I’m not a tax person, so you need to talk about the ramifications of that with someone who is and who knows your personal situation. </p>

9

<p>Nothing to add to what @Thumper1 had in her first post. To address some other statements, Wellesley offers NO merit aid, only FA. I would start managing expectations about that now. I agree that the SUNYs would be good options. They have very good engineering programs and are bargains.</p>

10

<p>Thank you for all your replies. The Fafsa EFC calculator said our EFC would be about$30 . I told my daughter in an email, frankly, the situation, and then called her up that evening to gauge her reaction. She said so I will just take loans. She has HS friends at sunys and will not want to transfer. She is playing rugby and is very tight with the rugby girls. She will not want to leave union and I envision loans in this picture which is making me very anxious and upset. Sorry to hear about the parent with two dependant moms and thanks for pointing out no merit aid at Wellesley. In dec my husband did find a job for $75000 but we are living paycheck to paycheck and have $30000 in credit card debt. Just got a letter from unions president yesterday that the tuition goes up over 3 % and it is so high. I feel trapped into the loan direction which my husband and daughter support but I fear they underestimate the consequences. She is young and he is not financially savy</p>

11

<p>

</p>

<p>Unless she only needs $6500 to make union work, your daughter will not be taking out loans to attend Union. The $6500 is the max that she can borrow. Since you state that financially your family is not in a good place and is trying to get solid, the last thing you need to do is take out thousands of dollars in loans (provided that you are approved for them). If you are denied a PLUS loan then she will be able to borrow an additional 4k.</p>

<p>

</p>

<p>The problem is unless you and your husband are cosigning these loans, your daughter will not have the debt; you and your husband will have this non-dischargable debt to pay in addition to your other bills and trying to put 2 more kids through college.</p>

<p>

</p>

<p>The problem is your EFC won’t be $30 (unless you mean 30K, which seems about right with $120 in income-the distribution is considered income).</p>

<p>There is no need to feel trapped; you have to tell your daughter what she does not want to hear; you cannot afford this school next year. She could take a leave of absence, sit out a year and go back when your second daughter goes to school with the hope that you will get a better financial aid package with 2 in college. The problem with this is Union does not meet 100% demonstrated need so you could still end up not receiving enough aid to make it a viable option.</p>

<p>While she may not “want” to go to SUNY, she “needs” to go where her money can take her. She should consider trying to transfer to stony brook or bing</p>

12

<p>It is absolutely crazy to take on college debts when you have that much in credit card debt. The loans will have to be in your name, at least as co-signers. The important thing is for her to get an education at an ABET school, and that is affordable through SUNY. </p>

<p>Many, many students have to give up their “want” school and concentrate on the long term goal of education rather than the short term of being with friends at the “dream school”. My two included. Yes, it will hurt. A lot. But at least she will get that education without risking bankruptcy and worse (because bankruptcy will get you out of the credit card debt but never the student loans). </p>

13

<p>Your distribution is absolutely considered income by the IRS and every/anyone. That it was not by Union fin aid was an exception to give you a year’s grace to get it together, which it appears you have. Congratulations and hugs about the new job and my best wishes that your health issues are under rein. Truly, it’s looking better for you.</p>

<p>But the reality of crossing the 6 figure line, means you gotta pay for those private school huge tuition costs. Again it the new financial reality in your life is living on a lot less and this year will more clearly reflect this, then your DD needs to red shirt the year. Other people have done it. Perhaps a far less expensive abroad project, a job in the area and sticking around Schenectady, whatever. But you need to regroup and think about this. We aren’t talking about a one time thing here. You have other kids and are making some precedents and commitments that you cannot possibly keep. I did a similar thing with my oldest and am finally over paying it 15 years later , And I started the PLUS payment as soon as I borrowed the money so that we are done that “quickly”. Talk about a monkey on your back. Heroin would have been cheaper.</p>

<p>Your kids will be in even more trouble, unhappier, more depressed when you and your husband are flat broke, out of money and credit as they are trying to make their own way into the world and become self sufficient. It’s rough out there. I have two that are barely making it, and they have NO loans. You think the last couple years were rough, well, I’m a lot older than you, have more kids and can tell you that as you age, these sort of things become the way life is. Unless you have some large amount of money coming in the near future, you can really find yourself in trouble, real trouble and your kids too.</p>

<p>Also, just a tip from the vibes in NYC, some rough waves are a -coming. You do not want to be in a lot of debt. Credit is going to be very important in the coming years. </p>

<p>Your daughter CANNOT take out more than the $6500 loan without you or DH involved. To get more from the Direct loans, about $4K more, one of you has to apply for a parent loan and be denied, a possiblee blotch right there on your credit report. If you get it which you may if you have no 90 day past due reports on file–they do a credit check on the spot, that money starts running up interest at about 7% the instant the funds are released, and this is in a very low interest time. Not hardly a deal. Doesn’t take that long for amounts to double when not paid down at 7%, do the math. And this would then be just for ONE year, ONE kid. You and your kids need a reality sit down talk about what is going on with the family financially. I cannot imagine your beloved kids who so love you will want to you to be going through the dangers, possible financial disaster and the stress, especially given your medical history that you are considering undertaking. I would not for my parents, and would have been upset had they gone that route and my kids absolutely feel that way about us as selfish and spoiled as they are (yeah, a good part my doing). Those top priced privates went right off the table with out a murmur or even a word or thought. Out of mind when I said the cost was more than we could afford A lot of affordable options out there for kids who can get into Union and Wellesley. </p>

<p>If you are thinking one instant about the co-loans out there, please perish the thought. As expensive as PLUS is, at least if anything happened (like death) to you or your student, the loans are forgiven, and there is some flexibility in repayment so that your credit won’t be shattered and destroyed if you work with them. Those co-loans are really more like loan sharks. Not only will they go after you, not negotiate, dunn your credit with no leeway despite hardship, sob story,etc, they will go after your kid as well. I know one case too well with a very dear sweet friend of mine. Having a huge loan balance on her credit report will be an impediment to your DD in jobs in certain fields and if for any reason payments can’t be made, her credit and options will take a huge hit before she is even up and running in her career and life. Getting a decent apartment rental, let alone a mortgage for a home, even certain jobs, will be out of the picture with that ape on her back. Don’t do it. She will need so much as it is when starting out after college. This is truly not the be all to end all. She’s going to have a tough enough time paying back the $30K+ in Direct loans she will be owing, as the unsubsidized parts of those loans are growing due to the power of interest. Don’t throw a mortgage on her without the house.</p>

<p>But your family need to sit down and discuss what has been going on, and how you all have to batten down and get ready for future storms so that you are not in ruins in a few years. What the heck makes you think ANYONE is entitled to private school, room and board all paid for as a routine thing? It’s truly not an entitlement. You got a break the one year, and if you could not get it together in that time, it’s time for you to move on to affordable options. Your daughter will be crying harder and longer if you put yourself and her and her sisters in precarious financial shape. </p>

14

<p>thanks for detailed and considered replies. Depressing and scary.Will talk with husband and daughter,
. Should add, husband is now making a guaranteed $75000 a year and will take out $19000 out a year starting now from our retirement now that he is 62. Can we do loans her sophomore yr at union and expect fa
Help her jr and sr years?</p>

15

<p>NO, NO, NO. you cannot afford this school. While your husband is making 75k, if he is saving 19,000 before taxes for his retirement, this leaves you with 56k. Now take approx i/3 of this for taxes, you are talking about ~37k to pay your mortgage, your out standing debt, feed and clothe the kids who are living for your house and try to make PLUS loan payments. Where is the $$ coming from. Again, Union does not meet 100% demonstrated need so there is no guarantee that you will be able to afford this school junior and senior year.</p>

<p>Your husband is 62 years old. Why would you want to take on this kind of debt when you already have a lot of debt to pay off, med expenses and 5 years to retirement. You need to fund your retirement, not take on massive debt for undergrad. There will be some screaming, some tears some foot stomping and some accusations that you dot love her but your daughter needs to go to an affordable school (even if this means commuting from home). Her dream school should not be a financial nightmare for your family.</p>

16

<p>Does your daughter have a job for the summer? Many engineering students, even those just finishing first year, get paid internships at $20/hr or even more. Playing rugby is fun, but doesn’t pay the bills. She might also consider a co-op school where she works for 6-9 months, then returns to school for a period.</p>

<p>You are not alone in your financial upset. I also was unemployed in 2008 and had a great deal of credit card debt. When I got a job, I did nothing but pay off those credit cards, and then I started saving for college. In 4 years, I’ve accumulated enough for them (I have 2 starting this year) two years because they chose wisely and have each contributed. One has a large scholarship, one has a job. Yes, it would be easier to just say ‘we will take the loans’ but having just paid off a huge debt, I don’t want to return to debt or for them to start in debt. </p>

<p>If you feel you must help relatives financially, then you have to make other decisions when it comes to saving money. You can’t spend the same dollar twice. My kids are often disappointed when I say no. One is sitting here right now waiting for me to take her prom dress shopping and I’m thinking $30 and she’s thinking $300, but I know we’ll be closer to my figure than hers in the end. And she’ll still go to the prom and still have a good time, even in the ~ $50 dress. Same is true with your daughter - she’ll still be an engineer at the end IF she goes to a college you can afford. If she will only go to Union, and you can’t afford Union, she will not be an engineer.</p>

17

<p>That is something you need to discuss with the Union Financial aid office. Seriously, at age 62, with a job and two other kids still in the wings, taking out retirement money, unless you have a veritable fortune in there is NOT a good idea. You have your nose up in the air about SUNYs for your first daughter, so what are you going to do, tell the other two that’s what’s on the plate for them because you used up the funds for the eldest to go away to a top priced private school during a time when your were under some major crises? What the heck? There are life lessons to be learned during these rough times, you know, and you are doing those kids no favors, not teaching them what’s come your way. Y</p>

<p>You are basically asking for financial aid at close to the $100K mark from Union. Do the NPCs as to what can be expected from them with a $95K income plus whatever else you expect to earn. I don’t think you are going to get enough aid to avoid even more loans in future years. You already got a taste of things to come with that cost increase. Well, upperclassmen often get other needs as well, like the housing and things are more suite and apt style so they can cost a lot more than a double in the dorms, and opportunities all costing money pop up all over the place. The “no’s”, and “can’t afford it” are going to be like knife slashes, I can tell you , with the route you are considering in offering your DD a champagne menu on a beer, or even tap water budget. There is no good to come of it. Also most schools do require students to “grow up” and take an increasingly larger role in paying for their educational costs, so her student contribution will increase. Even HPY does this as part of the maturing and responsibility thing which you are cheating your daughter out of by artificially and temporarily inflating her financial balloon when a lot of that air is going to have to be released. She does NOT have parents who can afford to send their kids to private, sleep away school. You did not provide for the contingency that occurred, and nothing is guaranteed in the future. Age 62? he can lose that job or the place can go up in a heartbeat. Health issues are just awaiting. You got just a small taste of all of that, not to mention economic crises that I think are imminent. You bought her something unaffordable to maintain.</p>

<p>So where are you thinking of getting that loan sophomore year after I showed you that your DD can’t safely get that kind of money? You thinking of trying to get that terrible joint co-loan deal, or do you think PLUS will be a go for you? How much in loans has she taken already? Certainly the $5500 last year–did they give her the additional $4K through PLUS denial then? Did she get Perkins loans on top of that? What’s in the package in the way of loans this year? </p>

<p>The FAFSA calculators come up with what’s the a rock bottom amount you have to pay before getting penny one of federal aid, so don’t go by them. The NPC specific to a school is much more accurate and you can play around with Union’s to see what the future bodes with them under various financial scenarios, though really, the freshman year tends to be the most generous, and accurate with that calculator, and Union does NOT guarantee to meet full need. </p>

<p>Seriously, what you are giving to your DD right now, you are taking not only from you and your DH’s future, but from her future as well, and from her sisters too. </p>

<p>Frankly, Union is not worth it, IMO. I love LACs, I know how you feel, believe me, but it’s not worth it. You are trading instaneous immediate gratification for long term security and happiness. </p>

18

<p>sybbie, thanks for your input. He is earning $75K and getting $19K in addition by drawing on his earned retirement. So our new income is 94K.</p>

19

<p>The most difficult part of this is that your daughter got to start at Union and got attached to friends and her life there. I agree with others, but I don’t envy you your task. If she had started at SUNYs or similar, things would be fine because she’d have gotten over her disappointment at not being able to attend Union or a similar school, adjusted and gotten attached to her life there. You somehow have to find the courage to tell her that you miscalculated badly and that it has to end. Not gonna be easy. I think she will not be alone as others also make bad financial decisions and have to pull the plug.</p>

<p>The younger children need to adjust their expectations now, so they aren’t moping around the house and crying April senior year. If the younger girl is 1st in class, she likely can get great scholarships at SUNYs and elsewhere. Stonybrook gives full tuition to high stat kids for sure. There may be places she can get free rides or close to it. Perhaps not the kinds of schools you currently envision your kids attending, but you’ll adapt. You have to look at the schools you can afford. There are many ways to get a good education. Too bad you didn’t know to do that with your eldest as it sounds like she is also a good student. Getting money like that as a transfer is much more difficult. But what’s done is done and now you have to deal with it. Good luck and she’ll forgive you for mucking up eventually.</p>

20

<p>Ctclemmons,</p>

<p>Your husband is 62 years old. Your youngest child is 11. By the time your youngest finishes college at 22, your husband will be 73 years old. You you expect your husband to work for the next 11 years at the level the level he is working now? Your husband will be 66 by the time your eldest finishes college and 69 when your middle D finishes school. You wrote about your own health issues. While I wish you good health, what will happen if your condition worsens or if your husband’s health should decline.</p>

<p>Your are already at financial strait and trying to bounce back from debt and medical expenses. I agree with Cpt, that for the money, Union is not a better school than Stony Brook or Bing. I think that you have to sit down with all of your children and discuss long range financial planning for their post secondary educations.</p>