Strange family situation

Parents Forum
1

<p>I was recommended to post this on the Parent's Forum so here it is.</p>

<p>So, I have a very strange family situation (that I'd rather not discuss) that leaves me and my two younger brothers living with my grandparents. My mother passed away at the beginning of soph year and my father isn't "around." The house that we lived in is valued at 250K and is now under the name of me and my brothers (even though we're all under 18?). It's vacant now, and on the market, but nobody has even considered buying it. My brothers and I were left with some money of my mothers and her life insurance, which after being split 3 ways, leaves us each at about 30K, plus the value of the house. I have really been considering Northwestern, but due to their high costs, I don't even know if this is realistic. If it is, I'm afraid that they'll expect me to use up all of my 30K, which I really would like to have after college for grad school/an apartment, etc and living expenses during college. My grandparents are somewhat financially stable but already explained to me that they won't be able to help me pay for college, so I'm completely on my own. I want to try not to take out too many loans for undergrad since I'm sure that I'll have to take out many for grad/med school. Is Northwestern within reach financially (if I get accepted), or should I just try public schools. </p>

<p>I'm completely clueless about all of this since I'm the first one in my family to ever go to a four year university, so any help would be greatly appreciated :)</p>

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<p>senior09 - Please excuse my French, but that really s*cks. If there is good layman advice to be had, this forum is the place. But I think you may require professional assistance. You're not an orphan, so you're not really emancipated. And I don't see an objective FA officer saying "Well her net worth is twenty times that of most students her age --- let's give her a lot of FA." The only silver lining her is that (a) you're obviously an exceptional student, and (b) if you can convince Northwestern that you really are emancipated -- and I believe you should try to do that -- you would probably be subject to the more modest 6%-of-net-assets adult levy. Good luck, and God bless.</p>

3

<p>I haven't been through the financial aid process yet, so I probably won't be much help - but I think you should definitely apply and see what happens. If you don't apply, there's no way you're getting into Northwestern. If you do apply, you may or may not get adequate financial aid - but it's worth a shot. I know you don't want to go into details about your family situation here, but you most likely will explain things at some point in the application process, and maybe that will make the school understand why you are in greater financial need than you appear to be.</p>

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<p>I responded under the financial aid category to this question.</p>

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<p>Well, your very unique and difficult situation MAY help you get non-need based financial aid privately through scholarships affiliated with advocacy groups that support people who are victims of whatever your particular circumstance was or community scholarships fro those who have endured tough times, but they are unlikely to pay for a school like Northwestern. And, with all due respect to your sad situation, your 30,000.00 along with about 80,000.00 equity puts your net worth in to the six figure range, which is more than a lot of families have to spend on college. Still, you are right to be concerned about spending it for college, since you will not be getting financial help in the future. If you are competitive for Northwestern, you might consider looking at schools that would love to give a student such as yourself a full merit scholarship. That will leave you with a degree and a nest egg at the end of four years. Good luck to you. Being without your mom is difficult.</p>

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<p>Try to find a financial aid calculator ... Princeton Univ. has a good one. I have a feeling you will get lots of need based help. They seems to favor NOT using the students own funds. But I am inexperienced and just starting the process. Princeton is very generous so not necessarily a good model but apply to many RD and see what packages come forth.</p>

<p>I agree that you should try to find an expert to help out. Maybe your local HS or CC counselor can steer you in the right direction.</p>

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<p>Thanks everyone for the input, it has all been very helpful. Because my parents built the house in 2000, it wasn't completely paid for and my parents still owed about 100K, which came to 900$/month payments. Through the half of the money my mother had, it is still being paid for every month and that money is slowly but surely draining since the house has been vacant since late 2006. If the house isn't sold by the time I apply for fin. aid, will they realize that most of money the house is sold for will probably go towards the loan that was owed on it? </p>

<p>My stats are good and I've tried my entire life to make something of myself (since I'm currently the first in the family to ever take Calculus, and to even consider going to a four year school). I live in Illinois and don't want to go too far since my youngest brother (who is now 8) is really attached to me. Does anybody know any good schools in Illinois that give good merit based aid but are still slightly prestigious?</p>

<p>Thanks again :)</p>

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<p>Schools to consider in Illinois:</p>

<p>Knox College (on the Colleges the Change Lives list - see ctcl.com)
Average % of need met: 94%
Merit aid: 27% of students, average award $10,144
Acceptance rate for regular decision: 63%</p>

<p>DePaul University
Average % of need met: 66%
Merit aid: 6% of students, average award $8,549
Acceptance rate for regular decision: 58%
Rolling admission (apply any time)</p>

<p>Northwestern University
Average % of need met: 100%
Merit aid: 5% of students, average award $2,417
Acceptance rate for regular decision: 29%</p>

<p>University of Chicago
Average % of need met: 100%
Merit aid: 11% of students, average award $9,171
Acceptance rate for regular decision: 34%</p>

<p>Lake Forest College
Average % of need met: 100%
Merit aid: 12% of students, average award $10,848
Acceptance rate for regular decision: 53%</p>

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<p>Definitely look at Knox. A smaller school will be more able to hear your personal story and they give some good financial aid. And they have a guaranteed admission program to Rush Med School if you go premed and meet the stated GPA etc. during your first 3 years. You can get there on the train from Chicago and it will be a much more personal and attentive undergrad experience than you would get at NU. (I'm an NU alum and grateful for the graduate education I got there but I was not impressed with the undergrad experience I witnessed.)
You might also look at Rhodes and Hendrix.</p>

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<p>Discuss how financial aid works with your HS guidance counselor- spend a long session where you can go over things and ask their advice regarding college applications. They will know you, your academic/EC/test score results as well as schools to consider and scholarships you should apply for. Do not just go in for your routine senior planning visit, but make time to ask for comprehensive help in going about the college process. There are probably written resources or sessions for students available through your HS with answers to your questions. Get someone to take you under their wing. Do not limit yourself to colleges suggested here, explore options those not from Illinois are not familiar with- such as the public U's, some may be better academically than some private schools (I get irritated with the attitude that private schools are better than public ones that so often seems expressed on this forum, especially for those living in the midwest).</p>

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<p>It looks like you are going to qualify for a need based FA, since your income=0. I do not think (I might be wrong) that the value of the house and 30K will be an obstacle. House does not even belong to you, it belongs to 3 of you.</p>

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<p>
[quote]
Do not limit yourself to colleges suggested here, explore options those not from Illinois are not familiar with- such as the public U's, some may be better academically than some private schools (I get irritated with the attitude that private schools are better than public ones

[/quote]
</p>

<p>It doesn't matter how great the public schools are if they don't offer enough financial aid for the student to actually go there. This student needs a comprehensive package, without any gaps, since no one is available to cover any shortfalls. </p>

<p>In my state (California), the public colleges and universities can't afford to offer as much financial aid as many private colleges do - we are in a budget crisis and the public funds just aren't there. Maybe in Illinois things are better? It's still a good idea to apply to public schools too - and if the aid is there, they'll be great options to have.</p>

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<p>I agree with the advice of getting someone to take you under their wing. What about a friend's parent? Or your HS GC, if he/she is any good and not too overworked? There are also people you can hire to help you with this, and that would probably be a good use of a small portion of your $30K. Talk to everyone and everybody about your questions. A few people will take a particular interest in your situation and will go out of their way to help you. Good luck. You are a great role model for your younger brothers.</p>

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<p>First, let me say how sorry I am for your loss.</p>

<p>Judging by our experience, MiamiDAP is wrong, unfortunately.</p>

<p>The U of Chicago, for example, will expect you to tap ALL assets in the student's name (Including funds in trust that can't be touched until after the student has graduated from college. They expect you to find a way to take out a loan against such sums. And I know the word "trust" is associated with vast wealth in many people's minds, so be aware that I'm talking like $20K.) They will also expect you to throw in your equity in any real estate other than the family home in which you actually live, and to use it ALL up in four years. Of course, they will also consider your father's income, except in extraordinary circumstances. (I don't know how they would view your grandparents' assets and income if they are your legal guardians. That's something you'll need to look in to.) In our case, this included the equity in family real estate owned by several siblings (just like you) that we could neither sell (without the agreement of the other parties, who did not agree) nor borrow against (they had already tried).</p>

<p>If your resulting assets totaled $120,000--$30K cash plus $80K equity--they would divide this by four, and say that you can contribute $30,000 per year. They will then figure out how much they think your father can pay, and "meet 100% of your need" for the rest. They are not interested in hearing about your desire to hold onto some money for graduate school.</p>

<p>On valuing your assets, they do it when you apply. They said that they may be willing to revalue perhaps once during our kid's college career. So if your money is invested in stocks that tank or the value of your real estate plummets, too bad.</p>

<p>This is a realistic picture of how assets were treated by the U of C and by several other colleges in our case. (And we met with them and submitted an appeal, so this is not speculation:we know precisely how they treated the real estate and the assets in the student's name, both of the things that concern you.) Whether they would have some mercy on you because of your situation I do not know, but frankly I tend to doubt it. They hear sad stories of all kinds every day.</p>

<p>That is how the U of C and many other institutions calculate "need."</p>

<p>Edit: I forgot to mention that if you are a NMF, the U of C award will be subtracted from your grant. I believe that the same thing will happen if you win a an outside scholarship: they use it to reduce your work study and loans, if any.</p>

<p>I don't know if it is possible, but if you and your siblings and your grandparents could move into your mother's house--and maybe rent your GP's house out--rather than selling it, then it wouldn't be counted as a potential source of funds.</p>

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<p>"It looks like you are going to qualify for a need based FA, since your income=0."</p>

<p>Well maybe, for some schools. Both schools my D's attend "impute" $3,600 contribution from "student earnings" even if the student has no job. If the student has a job, the contribution is one third of gross income. Besides, the OP's father is still liable for support. Unless the OP can convince the school that he is completely out of the picture, his income is counted by many schools. </p>

<p>The OPs situation is very complicated. Like many complicated situations, her key would appear to be finding a partner to help uncomplicate things. I agree that her HS GC is a good place to start, but she may require assistance beyond that the GC can provide. JMHO.</p>

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<p>^ Is this true for somebody who is supporting himself with income=0 ? Or is it for a dependent person who has family to support him but has his own assets ?</p>

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<p>BTW, if your mother's house has been sitting vacant since 2006, not sold and costing you over $900 per month--because I'm sure there are utilities and property taxes in addition to the mortgage--someone needs to get on the stick NOW and deal with it. Either the house is overpriced, or there is something wrong with it that needs to be corrected. I would strongly suggest finding a different real estate agent NOW and "staging" the house attractively with some basic furnishings. You can hire a stager to do this for a fraction of the cost of letting it sit there racking up mortgage payments and taxes and heating bills for another 6 months. You are a kid and should not be expected to deal with this. Who is the executor of the estate? Are your grandparents in charge? I can certainly understand everyone being more or less paralyzed with grief, but this is a case where putting the matter into the hands of competent professionals is the best way to move forward. (And do not fall for the suggestion that you should pay a higher commission that usual to get the house sold. Pay a stager instead. It really does work.)</p>

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<p>What consolation said. You need a competent financial manager. I don't know if you are living with your mom's parents or your dad's, but if it is your mom's side of the family, keep in mind that they are also struggling with their loss of their daughter and raising her kids and may not be in a position to make good financial decisions--it must be overwhelming to them to manage all of this. </p>

<p>It sounds like you may need a financial guardian or conservator to help your grandparents manage your financial assets prudently. You can ask your GC for help, but I'd suggest you start out at your local bank. Sit down with the branch manager (bring your grandparents or whoever is managing your mom's house expenses and your money) and tell them what the deal is. Ask them if they can refer you to an attorney or a CPA who can help your grandparents. </p>

<p>You can also look at this website: Fee-Only</a> Financial Planning and Advice for Everyday Life. Hourly, As-Needed Services ... The New Choice for Smart Consumers (tm). </p>

<p>and find a fee only financial planner in your area. They can help your grandparents and you figure out how best to deal with the house, the money, etc.</p>

<p>If you were to take that $30K and put it in a college savings plan, it may help you for financial aid purposes--money in a 529 plan is not considered student assets and is weighted less heavily than money in your name. The downside is you have to use it for education expenses, but that might help you stretch it out to fund some grad school expenses.</p>

<p>Bottom line: get professional help and get it soon.</p>

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<p>I agree with the above two posters regarding the house. It needs to start either paying its keep or get translated into cash money. Maybe it's really only worthy $200K. Or $175K. Either way, it needs to move. If that means it's worth less than you think, in this market, you can't afford to wait for it to come back while it eats away $12000+ per year. </p>

<p>Good luck with this -- it's not an easy thing -- but there are people out there who are very willing to buy vacant property from an estate for a cash deal, probably discounted from full market value but with no contingencies and 30 day closings. I know, they are calling us all the time about properties my H recently inherited.</p>

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<p>I would also agree with the advice above about a FEE-based financial planner. Look for someone who is a "CFP" which is like being a CPA but in the world of financial planning.</p>

<p>Certified</a> Financial Planner Board of Standards Inc.</p>

<p>I'd also agree with the making the house pay its own way comments above. It needs to either be sold or lived in - sitting there as an asset that is consuming your resources is not the answer for anyone.</p>

<p>Best of luck to you</p>