Sophomore year aid disappointment

Paying for College
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<p>As noted by others, it is you, the parents, who will be taking out the vast bulk of the loans. Your daughter cannot do this herself. And you will need to qualify for three years, not just one. </p>

<p>Can she take a leave of absence from Union for this upcoming year? Then return when your income is stable.</p>

<p>I would strongly suggest you leave your retirement accounts alone. Our financial advisor told us point blank…you can pay some amount of loan debt with retirement income. BUT once it’s withdrawn, you lose the interest it would be accruing, and your income stream in retirement is reduced. </p>

<p>As noted, this is the first of your daughters to go to college. This school is not affordable. It was not affordable for this CURRENT year. Think of it this way…if you hadn’t been paying for Union, perhaps you could have paid off some of that credit card debt.</p>

<p>This is a hard place to be in. Someday your daughter will be in a position where she has to decide if she can afford something. Please teach her to live within her means.</p>

22

<p>OP, another option that I am sure you don’t like is to get a job yourself. Yes, your mom calls you, but do you have to actually physically care for her or just run her around for errands that could be done on weekends or by a local van service or something? Or you could work evenings and weekends, and have your H on call for your mom during those times. I actually think given your financial situation and more kids headed for college that you should have your D transfer AND you should get a job… you could pay off that credit card debt that way. It isn’t going to go away on its own, and your retirement savings are not going to miraculously restore themselves.</p>

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<p>Once you take out a parent plus loan, they must be paid back right away. Even if your D takes over those payments once she gets out of school, are you able to absorb those payments for 3 more years. </p>

<p>If your EFC is 30,000 per year, how much can you pay of that? I do not know how Union does financial aid but many schools have loans as part of meeting the need of the student. So you could have an expectation of the parents owing $30,000 plus student loans of (what is it now) $5200. So actually the amount you have to come up with is $35,000. If you have to borrow the $30,000 per year she will have $90,000 plus an additional 25 to 27,000 dollars. So she could have loan payments in the $1200/ month range. </p>

<p>I have a child who is an engineer who makes around $60,000. I posted this recently but there are $15,000 in taxes every year. Kid is saving minimum of $3,500 in 401k which is what their employer matches and there are tax savings on that. They have insurance costs also, not much but they are lucky enough to have employer insurance. She lives by herself but in a building with security and covered parking (not in an expensive area to live). Housing costs are $1200/month. No car payment but car insurance of $150/month. Older car so no payment but recently had to put $1000 in car. </p>

<p>I added things up, taxes, savings, insurance, rent. This is a very conservative estimate of what it costs to live on. I included $150/month for health insurance/misc.(Internet/cable). I get that after this there is 1,950/month to live on after fixed cost. If she would have $1200/month in loan payments, that leaves $750 a month for everything else. Food, going out, saving everything! That does not seem like a lot, even though $60,000 is a very comfortable starting salary. </p>

<p>I know the child thinks they could “just take out loans”. But I am sure they have no idea what that entails. The other alternative is that her father who is already retirement age will be working well past 70! And that is just the first child. </p>

<p>I hope the numbers I gave and what I explained is not too confusing. Sometimes I feel I’m not explaining things well but hope that you get the gist of what I am trying to say. </p>

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<p>I thought Plus Loans did not have to be repaid immediately…but I could be wrong about that.</p>

<p>Still, this family is looking at about $100,000 in loans which would be at least $1100 a month for 10 years. That is a huge chunk of money for a beginning college grad or her parents to be paying.</p>

<p>And this is only the FIRST of three daughters. </p>

<p>This family is going to face the same financial obstacles for at least the next three years ( with this student), and then potentially with the other two daughters.</p>

<p>How are they going to be able to pay their OWN bills in retirement with these kinds of loans, plus other debt? </p>

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<p>SUNY Binghamton and Stonybrook are good if not great schools. If she combined her time there with co-op opportunities, she and your family could potentially come out of this with very little debt. The Union College experience is unfortunate but life is chock full of cannot haves. If anything, this is a huge lesson in that there are limits to everything and that it’s not the end of the world when confronted with a financial issue; it’s how you deal with it. </p>

<p>Private colleges aren’t an entitlement and your family is far from making a full recovery from the current financial hits you’ve taken. If you’re looking for permission or agreement for your daughter to continue at Union, you’re not going to find it here. You’re not helping your daughter, yourself, and your other kids if you send her back there next year. You’ve gotten some excellent advice here. Take it.</p>

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<p>I was an engineer. I went to a top ranked engineering school, higher than Union. The name of my school didn’t make much difference in my career.</p>

<p>At a state school one can get the same knowledge. Perhaps some of it is in grad-level courses. Great, pass the undergrad courses and take those as electives. And/or do well and get funded for grad school, which is very typical in engineering departments.</p>

<p>Going way into debt is a very impractical decision. Engineering is a very practical, pragmatic field, not a luxury field. The two don’t make sense together. If your daughter has the “luxury” of the intellectual horsepower to complete an engineering degree at ANY ABET accredited school, that’s all she needs to enter the field.</p>

<p>What’s so bad about SUNY anyway? I ask because I am in NY and my sons might go there someday. Please don’t tell me that you will let Women’s Rugby ruin your family’s finances, regardless of what this daughter wants. She can join a rugby league on her salary once she’s working.</p>

<p>Good luck, but more than that, make your luck by being practical. You are blessed with daughters who are very good students. There is a way for them. But private schools may not be that way.</p>

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<p>P.S. This is NOT an email discussion, in my opinion. This has to be an in person conversation that expresses the realities of the financial situation.</p>

<p>If Union had not given you special consideration for THIS school year, would you have allowed your daughter to enroll there?</p>

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<p>Related to comment just above at 1:55, consider the “harsh” idea that the college including its financial aid department is a profit maximizing operation. Yes it’s a nonprofit and there are many caring people there and people committed to genuine education. But the school needs revenue to pay its professors, including the ones in the departments that don’t bring in grants. And heat its buildings, make new buildings, and so on. It’s just possible that they were willing to give a discount to get your daughter in the door, giving a qualified student a one-year discount in the hope of getting closer to the full tuition paid in future years.</p>

<p>Even though they’re a university, if you ruin your finances and your family to pay them some extra cash, they are not going to stop you. Lots of people are suffering to pay for their salaries and new buildings. And I say this knowing nothing specific about Union, because it’s true of every private school I’ve been associated with.</p>

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<p>Here is something about repaying parent plus loans. <a href=“http://www.experts123.com/q/does-the-parent-plus-loan-have-to-be-repaid.html”>http://www.experts123.com/q/does-the-parent-plus-loan-have-to-be-repaid.html&lt;/a&gt;. It looks like you can wait to repay the loans until 6 months after the student graduates. However interest accrues 60 days after the loan is dispersed. So you can wait but will accrue $1,000’s of dollars in interest if you wait, making even more that you will owe. </p>

<p>I have 2 children, one went to a state university and one who went to a highly ranked private school. The kid at the state school makes more than the other. Has had a better trajectory within their company also. Kids graduated a year apart. We think the state school did a great job educating and was exceptional in job placement opportunities. </p>

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<p>I appreciate all the responses and anticipate having to introduce the change to my daughter. We are going to tell her we’ll wait to get the awards letter but to begin to think about a transfer to Stoney Brook or New Paltz. Please understand, Union gave her an almost complete scholarship her first year. Only the other day did I learn from the financial aid director that our retirement dispersement of 2013 would be counted as income, whereas the dispersement of 2012 was not counted as income for her financial awards package. I was not informed enough (how could I know?) that that would be a one-time thing. I did not know it was “special consideration.” </p>

<p>My husband has scrolled through the comments and promises to read them tomorrow. Do keep the comments and advice coming, thank you. </p>

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<p>CT. I know this is a very difficult situation. Like I said earlier, we all wish we could say YES to the things our kids want. But sometimes that is just not possible. I hope this all works out for your family. </p>

<p>They say that good compromise has everyone a little dissatisfied. This isn’t going to make anyone in your family totally happy. But your daughter can be a great engineer regardless of where she gets her degree. </p>

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<p>Thank you thumper. I did read your remarks above carefully. DD is coming home for Easter this weekend. We are going to get her started/used to the idea, not that it is a “must” until we get the awards letter. But I did do the estimated net price index today at Union’s website based on our 2013 income (that included the retirement distribution) and the estimated net price is $43,416.</p>

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<p>If she may transfer fall semester, there is some urgency in getting the app in. Apps after 3/1 are on ‘space available’ basis at Stonybrook. </p>

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<p>I was 61 when my oldest started college. And we had no debt, house was paid off etc. Job wasn’t the most secure. Retirement reasonably well accounted for. Still no way in the world I would have taken on the kind of debt you are facing and I wouldn’t have had my kids do it either. My wife agreed, the kids understood and agreed. But expectations had been set in advance. Oldest son(CS) is graduating in May with a great paying job waiting for him, daughter’s a sophomore currently doing well, both at state schools. </p>

<p>My number one priority was not being a financial burden to my kids in our old age.</p>

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<p>Yes I did see the 3/1 deadline and space available at Stonybrook, so it does get complex. I talked to her an hr ago and she doesn’t get it that she can just “take loans.” This is going to be delicate and painful… Thank you to all who have contributed, thank you for your support and any forthcoming remarks are most welcome. Annoying dad, so you are an older parent, too! We adopted our three girls when we were not young… Thank you for the pm, thumper.</p>

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<p>OP, did you get an awards letter from Union for next year? Did she get any aid, merit or financial, at all? If not, then it is too big a gap for ANY family to come up with in your situation of recovering from a period of unemployment. It’s just too much cash flow needed. If she’s an engineer, she should understand the numbers. Write them down, how much you can contribute, how much she can take in loans, cost of tuition, how much she needs to earn this summer/fall (if she can take a semester off). She can make some decisions, too, such as working, applying for outside scholarships, going to the FA office and talking to them (she can take the figure you give her to them of what you can pay). Brainstorm about scholarships (try <a href=“Scholarships - Society of Women Engineers”>Scholarships - Society of Women Engineers) , work opportunities. </p>

<p>It may be that she only has to take off 1/2 a year or one year. If your income is going to be $75k (I don’t know if the pension is pre-tax income or already accounted for), run the NPC with that income and 2 in college for 2015-16. It may be that THEN Union will come up with more based on a much lower EFC. With good planning, your second daughter may get a full scholarship somewhere, but the EFC will still be based on 2 in college, do Daughter #1 might be able to do it. Also, she’ll have a lot of her own earnings to contribute. If I were your daughter, I’d prefer to take a semester off, earn some money, and then go back to the school I like, but it has to be her choice with a good grasp of the financial situation.</p>

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<p>PLUS payments DO NOT have to start immediately. You get an initial six months haitus after the student’s graduation or halt in being a full time student. BUT, the interest does start accruing immediately, not 60 days after disbursement of funds, and PLUS interest rates are no bargain at nearly 7%. </p>

<p>We took out those loans for my oldest as he did go to a top priced private school with no aid, no merit money, no outside scholarship, and we had 4 more in private schools coming after him. It was a dumb move, but the smart part of it was that we did start payments right away instead of holding them off, so we very quickly got through our thick heads that this was not a good idea. We felt the pain immediately and by doing some simple math came to the conclusion that we could not afford doing this. That was more than 15 years ago, and we have just finished the payments for this. We spent several years in full payment mode which is just a small taste of what it would have been like had we opted to wait six months after kid was done with school to start paying for all 4 years. We would either still be paying even more than that full amount or still more than the tapered amounts for ten years more had we not started payment immediately . By the time we had built ourselves up to year four of accumulated loan payments, bear in mind that we had paid the interest each year so that was not accumulating and was about 40% paid off ( in truth more like 30% due to the semester delay) of year one. And it STILL HURT. 7% interest is no joke. I felt it. </p>

<p>OP, as Thumper said, you likely would not have even started down the Union path had the school not given you a one year consideration on your retirement disbursement and some professional judgement leeway. Now you know. I do love that school–know it well, but I’m telling you flat out that it’s not worth the premium in cost. Though it’s worth every penny if affordable even just for the fact that it’s making your daughter happy, you and your DH and those younger kids are in a precarious financial position due to what you are doing for D1. Yes, I did the same thing for my oldest and paid for 14 years for it, and he’ll look you right in the face and say he would have gone to Binghamton had he known it was going to create even a slight financial hardship for us and the other kids. That my next did go to a SUNY school really was gave us breathing room. My other kids all have financial constraints on what they can pick. </p>

<p>My college kid put his nose up to the idea of commuting to a local school that gave him an award> Well, now older and wiser, he will say right out that it was probably something he should have done, because we did offer him up the differential of what we are paying and the little that the local school would have cost. He’d have come out with a lot of money had he taken that option . Instead he’s going to be flat broke, but at least he has NO loans. That has been a saving grace for all of my kids. No loans. One is a performer, and lives hand to mouth, the other has a low paying job. THe one with the high paying job just called me about a head gasket in his car blowing up. But he has options with his savings, his job and NO LOANS. Only rent, utilities and living expenses, NO LOAN payments, but it’s not like he’s getting rich soon. Once you are out of school and in a good paying job other needs crop up to live like your peers, and if you have loans and struggling parents, it really hurts. He had NO LOANS and parents who could help out a bit since we had no so strapped ourselves. But don’t think it ends with graduation. Start up costs are not cheap when starting even a well paying job, and they often do not just drop in the lap. </p>

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<p>Your situation is pretty complex. We don’t get FA, but I wonder if in your shoes I would have questioned the future years’ FA or just assumed that it would continue similar to 1s year… Not sure. I’m not at all educated about FA, so probably not. Anyway, didn’t mean to be harsh.This stuff is all confusing. It looks like people really need to take pains to understand what aid will be in future years based on expected income, ask lots of questions, to avoid situations like yours. </p>

<p>When do next year’s awards come out? It sounds like you don’t know anything definite at this point. Is that right?</p>

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<p>Dd has a fine merit award but according to the web calculator, our burden would still be $43000. no, we haven’t gotten the letter yet, they won’t come out till mid may early June. But as I said I talked to the director of financial aid who said that this yr, unlike last yr, they will factor in the huge $66000 retirement distribution. Thanks for the editing, I didn’t know how to do it.</p>

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<p>CT…how much CAN you reasonably pay. Subtract that from $43,000 and consider THAT number. If your daughter doesn’t have the Direct Loan of $6500, you can subtract that too. </p>

<p>If the amount is the same as the full cost of attending a SUNY minus the Direct Loan, then you REALLY have an issue of affordability. But my guess is that SUNY with a Direct Loan will be a LOT less costly as an instate student.</p>