<p>S1's Stafford loan is from Wachovia. I wonder if he'll be shopping for a new lender next year.</p>
<p>"Why would the parent have been able to afford the school 6 months ago but not now unless they lost their job?"
For all the reasons given above, plus, our parents, as any parent, wants the best for their kid, many times giving without taking, at least mine.</p>
<p>I teach at the local H.S. and I have mentioned to my students to be nice to their parents when they get home if they have stocks. So far, three students have mentioned that they sat down with their parents and discussed the state of their college funds. I teach freshman and these parents are worried as are the students. All said they may have to look at the public school and schools with good merit aid rather than schools which don't offer good support.</p>
<p>One has a brother who is a NMF and he was not going to look at those schools offering NMF scholarships but all of a sudden they look pretty good.</p>
<p>A lot of nervous parents out there is appears.</p>
<p>I wonder if things will look much different in 6 months. Not that people will have recovered what they lost that fast, but that things will at least feel like they're hobbling along in the right direction. And that people who really aren't retiring all that soon will feel less panic than they do right now.</p>
<p>My daughter is in her first year at a regional state univ. It's only about 4 blocks from home, and is quite affordable between money she's accumulated herself and some financial aid. Next year though she was <em>really</em> hoping to transfer to Flagship State U Honors College and live in a dorm and have the college-away-from-home experience. But her interest is particularly in the Honors College... I'm not sure she'd (or we) take on the extra expense to just be in Flagship U general program. She has very strong test scores, but a rather non-traditional educational background, so I don't know how increased competition for the honors college will effect her admissions chances.</p>
<p>That's more her issue at the moment than the financial aspect. We don't have much money, but she is really good at working, finding and winning money awards, and she's eligible for Pell and other needs based grants. It's the competition issue that is fraying her nerves right now. But, worst case scenario, she can stay where she is even though she'd be living at home and in the same small town where she's grown up. It is a wonderful little public univ., beautiful campus, talented faculty, and she's already in its own honors program, but it's not as fully developed as the honors college at the Flagship U. Poor kid though. She's had this plan in mind for a long time, and now she's getting nervous because she's afraid she won't get accepted just due to large numbers of kids competing for the same (very few) spots.</p>
<p>I think that while the money issues will likely persist for many families for a good while to come, that the psychology around it all will evolve to something a little less frantic as time goes on. Unfortunately the application season is upon us... now.</p>
<p>drizzit, and I am sure that there are many families and students who are not looking ahead. When April 1 hits, and families see the bottom line of what they are being asked to pay to meet their EFC, there will be a lot of disappointed hs seniors. Many more will be heading to instate public Us, taking a gap year and rethinking where they should apply for the following year, or heading for CCs.</p>
<p>I am guessing that some (not all, but some) private schools (excluding top tier schools) will be offering a second FA/MA package, particularly this year, for those who speak up, in order to make a deal and fill a seat. Otherwise, there would be either some empty seats, or rooms filled with only wealthy students who can pay 25-50k/year. I am sure many of you will disagree with what I am saying, but this is my guess and nobody will really know outside the applicant's family and the school. You will only see the CDS when it is published, but not any of negotiating that might go on this year. JMO.</p>
<p>I understand why you're saying that some privates will offer more FA, Northeastmom, but I think that will be less common than you believe. Colleges are hurting as much as families. Where would they come up with this extra FA? I'm afraid that the dorms will indeed be filled with wealthy full-ticket students. Some colleges will probably cut back on enrollment rather than offer more aid.</p>
<p>Of course that's good news for wealthy students, but bad news for everyone else.</p>
<p>Cardinal Fang, I do think that schools will tend to lean toward taking two kids who require 15k each in aid, than one requiring full need. I do think that they will lean toward accepting more full pays (if they can get enough of them and that depends upon the individual school), but they do still need to worry about how far they swing that pendulum. There are schools that even upper middle class students (not even mentioning middle class, and students from poor families) reject because of the high percentage of ultra rich students attending. It changes classroom discussion, and the entire feel of a campus. Filling seats with too many full pays will impact education. </p>
<p>Also, there are some tier II and tier III schools in rural areas where I just do not picture a student who drives a Mercedes. I don't want to name names of specific schools, but can you picture the full paying, new Audi convertable driving student in a northeast private located in NYC or Boston or a CT suburb, attending a midwestern rural tier III private? There will be some, but they will be a minority because it is just a tough sell. This might be why some of the rural tier II and III LACs have endowments under 60 milliion. Other more nationally recognized LACs (many in rural areas btw) are wealthier and have endowments of either a quarter or even half a billion dollars, and wealthy students from all over the country are excited to attend.</p>
<p>I think that some schools that have small endowments will need to dig deeper into those endowments for a couple of years. Yield matters. They still would like to fill seats and bring in the middle class kid where the family is paying 12-25k than have the seat left open. JMO.</p>
<p>D1 is a freshman at an Ivy and I wonder if any of her classmates, who are not receiving FA, and were paying full freight, will have to transfer back to schools that might have offered them full rides or other merit packages, just a lower total bill. Any speculation about whether there will be some shifting around among current undergrads next year? I agree with Cardinal Fang's analysis that even heavily endowed schools will not see a return on their investments this year, and will simply not have the money to pour in to FA as in past years. Tough times.</p>
<p>Credit is rapidly shrinking. Those who thought they could borrow from their HELOC may find that pulled. Credit companies are very quick to dun late payers and any loan may be difficult. On top of that bonuses may be low, business slow for many small business folks. Our income has gone down this year. If I had a kid going this year, it would be a tighter prospect. I am telling my sons in college now that they HAVE to work next summer and make as much as they can. I am hoping S3 can put $5k towards his cost next year and also pay for his sundries. He will also have to take out a Stafford loan. Even with that and his scholarship, we are talking about $27K that we have to cover with a fund that has not risen in accordance to cost of college, a loan ourselves and our of pocket. I am definitely nervous as I have two more to go after him in terms of college.</p>
<p>I expect a lot of transfers to state schools and community colleges for the Spring Semester. We'll find out in a few months. I don't think that these students will be able to grab those former full-rides and merit packages. Transfer funds tend to be not as generous as freshman apps.</p>
<p>^ I don't think year-to-year swings in ROI will affect endowment spending quite that much, at least at the better-endowed schools. For planning purposes, they need to insulate themselves from market volatility, so what they typically do is set a target payout rate---usually 5% of endowment assets calculated on a three-year moving average. In years when market returns are higher than 5%, the endowment grows because the payout is less than earnings. In years when ROI is low or negative they may end up eating into the endowment a little, but they still have a positive and predictable payout, which they expect to make up in the flush years. If their endowments have in fact shrunk in the current market, it will affect next year's payout because it will bring down the three-year moving average, but the swing in their payout won't be nearly as dramatic as the downward spiral of the market itself. Definitely, though, they'll be looking at belt-tightening in the next several years (remember, this year's losses will affect the next three years' payout), which could very well mean less money for financial aid, not more.</p>
<p>Where they're likely to be hit hardest is in the number of students seeking FA, and in the size of the average FA recipient's demonstrated need. For colleges with 100% need-blind admissions and pledges to meet 100% of demonstrated need, this may be quite a strain. For the "not need-blind" schools, the answer seems obvious: admit more full-pays, more better-off partial pays, and fewer high-need students. For colleges that don't pledge to meet 100% of need, there may be more and larger "gaps" between the FA packages they offer and demonstrated need.</p>
<p>Friends of ours are preparing to remove one of their kids from college this year. He has not been doing well, and they simply no longer have the luxury of paying for him to stumble along. If he does not have satisfactory grades this term, he will take the next term off and work. Then perhaps go to a local college. The $52K price tag is just too steep for the family to pay. They could not get a decent loan and their practice is just not moving as well as they had hoped.</p>
<p>^^ I think it makes sense to to require a premium effort if the parent is paying a premium price.</p>
<p>Public colleges may not be the solution for some group of parents. Right now the cost for attending the UC colleges is $27,000 for parents making above $80,000. It could be $30,000 next year if the governor increases fees.</p>
<p>
[quote]
Public colleges may not be the solution for some group of parents. Right now the cost for attending the UC colleges is $27,000 for parents making above $80,000. It could be $30,000 next year if the governor increases fees.
[/quote]
</p>
<p>It's cheaper to live at home a commute.</p>
<p>You cannot assume that everyone lives within 30 miles to a local college.</p>
<p>riverrunner <<<<< D1 is a freshman at an Ivy and I wonder if any of her classmates, who are not receiving FA, and were paying full freight, will have to transfer back to schools that might have offered them full rides or other merit packages, just a lower total bill. Any speculation about whether there will be some shifting around among current undergrads next year? I agree with Cardinal Fang's analysis that even heavily endowed schools will not see a return on their investments this year, and will simply not have the money to pour in to FA as in past years. Tough times. >>>></p>
<p>Once a child goes to another college, those original merit offers from other colleges "go away". Most of those are incentives for high achieving incoming freshman because it those stats that help a school improve its rankings.</p>
<p>My son's friend turned down a full ride to the state's flagship in lieu of attending Georgetown. His parents could no longer afford the tuition, etc. So, he's now at the local college (not the flagship) because that original offer is no longer available.</p>
<p>That is a huge lesson for families who turn down good merit and go someplace else. That money will not be available if your child later decides to transfer to that (better merit) college. Some (a few) do give some small merit scholarships to Junior transfers, but those are not as generous as those for incoming freshman and are not available to those who transfer as sophomores.</p>
<p>What happens with a merit scholarship if a student takes a year or a semester off sometime after starting freshman year (whether they take time off from school after freshman year, or later)?</p>
<p>^^^^ That is probably handled differently at various schools. I doubt most would like a student taking a semester or a year off without some really serious reason (health, major surgery, etc.)</p>
<p>It depends on the school. Some will let you take a leave of absence and hold the funds.</p>
<p>S1 turned down a full ride, and they made clear to him (and us) that it would not be available if he decided to transfer later. Tough decision. Agree w/ucla_dad that paying a big tuition bill requires major effort on the student's part. We've told our kids since junior high that they would be taking out Staffords, working over the summer and 10 hrs/wk during the year to help pay the bill. They are fully on board with that, and S1 (actively) appreciates how hard it was for us to not pressure him to take the full ride. </p>
<p>I just hope everyone's kids will be able to get the jobs and Stafford loans needed to keep their dreams afloat!</p>