<p>I understand that I probably should have applied to more of those schools that flooded my mailbox with “we want you, apply for this scholarship!” mail, but they did not appeal to me and, because I didn’t have to consider it at the time, I didn’t apply to them. My mother has informed me that (especially because of this property debacle) she and my father will be willing to help me pay off some of my loans if they have the ability to do so, such as when they do decide to sell the property, which is essentially up to my aunts and uncles. As for now, my mom is going to see if she can gift her share to one of her siblings, pay all fees associated with it, and get it back in the future.
My parents do not want me to attend the CSU I applied to (they both went there) and are comfortable with assisting me financially. I have emailed a number of the schools I was accepted to and explained why we cannot sell the property. I doubt that it will have any effect but hey, I’m trying.</p>
<p>@caitiann - I agree that people shouldn’t beat up on you, but it would have made sense to provide these important facts from the start. You came here asking for advice and people cannot give intelligent advice when key aspects of the situation are missing. Because under the circumstances as we now know them, my first suggestion would have been to work with the other owners of your grandfather’s house and take out an equity loan up to the value of your parent’s share. Then invest that money in a safe and very liquid earning vehicle and take out only what you need for school as you need it. That would solve everything, presumably, at very low risk, since it is not likely the house won’t cover the loan when sold.</p>
<p>Has that been discussed?</p>
<p>I wish someone gave me property, even if it reduced finaid now, eventually I would be better off.</p>
<p>fallenchemist - I’m not sure I understand what you’re saying. It has not been discussed because my parents (and family in general) haven’t really worked with assets before. If we turned the property into an equity loan (not sure how that works) wouldn’t that reduce my financial aid drastically? Would it make more sense to take the aid that I’m offered now and accept my parents’ help later in paying off loans? It was never my intent to have them pay for the entirety of my education.
Also, I didn’t realize that I left the information out until now… I’ve been writing so many emails that I thought I had. My bad and my apologies.</p>
<p>It is extremely difficult, if not impossible, to get a mortgage/home equity loan against a fractional interest in a house. Lenders want to be able to foreclose and sell the house in the event of a default. The other co-owners would have to pledge their interest as collateral under the loan, and risk losing the property if the borrower defaults. If the parents are agreeable, they could try to sell their interest to one of the others family owners to generate cash for college. </p>
<p>I am sorry you are in this predicament and wish you the best of luck! </p>
<p>@caitiann - It depends on the nature of that financial aid that you got already. Is it all loans? If so, then you are better off, I think, with getting the equity from the house because it will not leave you short on the amount you need to attend one of these schools. It really all depends on what the house is worth and how many ways the money is being (or would be) split up. I also don’t think it would reduce your financial aid for this coming school year because that is based on last year’s income. It certainly would affect aid going forward since they would have to declare the assets going forward. Now that you mention it, when did they take over the partial ownership of this house? If it was before January 1 of this year they should have already declared it as an asset and in that case it wouldn’t affect things. As you can see there are a lot of particulars that need addressing. You might want to suggest that you all see a financial counselor that specializes in college funding.</p>
<p>But ignoring for now these potential complexities, the basic idea is that a bank does an assessment of the home value and will lend the owner(s) money up to some percentage of the value of the house, maybe 80%. It varies by bank. So if the house is worth $500,000 a bank might be willing to give a home equity loan of $400,000 on that. If there is only one other relative that is co-owner of this house with your parents, then you would only borrow $200,000 of that. Of course your parents have to be able to afford the payments on that loan, so you would have to see what those are. @Overtheedge is right about it having to be agreed with the other family members who co-own the house, hence by statement in the other post “work with the other owners of your grandfather’s house”. It could well be that the simpler way would be to have them take out the loan (assuming they don’t have the money already) and simply buy out your parent’s share. They would then have to make the payments, but they would get the profits when the house is eventually sold. Assuming the value of the house is increasing with time, your parents are trading a bigger future share for liquidity now.</p>
<p>It’s a little much to get into on here, but that’s the basic idea. You need to consult someone that can ascertain all the relevant facts, including examining the FA packages you have gotten from Duke, et. al. The bank themselves might have someone that can do this, although they obviously are not a neutral party. Otherwise a certified financial advisor that has experience with helping with college planning is a good way to go.</p>
<p>Help me out here people. I am not an expert on this by any means.</p>
<p>Be aware that if your grandfather goes into a nursing home paid for by Medicaid there is a possibility of a claw back. The state would usually sell his home to pay nursing home costs but by him deeding the home to his daughters it appears to be an effort to “structure” his assets. If this is a possibility most mortgage companies won’t touch the property. I don’t know your family and for all I know your grandfather is wealthy enough to self pay nursing home costs. I just know that a lot of families try this to keep the house and lose. It’s never wise to count on am inheritance. And IMO it would be greedy to mortgage the old man’s house while he’s living in it. Are you really that covetous?</p>
<p>I apologize if I came on a little strong to OP. It was someone else who suggested mortgaging the home. I looked up the Medicaid rule on claw back and they can come after it for up to ten years. </p>
<p>I think ‘our’ suggesting a 17 year old tell her parents and uncles and aunts how to mortgage a house is not useful. It sounds like they took out some kind of mortgage to buy it from the grandfather anyway, so there might not be any asset to report. OP, make sure they only reported the value of the asset after the mortgage, and then only their part (1/2, 1/4 or whatever your mother owns) It would be very difficult to mortgage or get a heloc because it is not owner occupied. It is a whole different market for rental homes, especially if the renter, your grandfather, isn’t actually paying anything.</p>
<p>OP needs to make her decision based on the information she has today. What is the cost of the school, how much financial aid does she have, how much can the family pay? The rest is just speculation of how a sale would bring down the EFC, etc. It’s April 11; she has 20 days to decide.</p>
<p>Complicated inheritance/asset situation aside, isn’t a 38K EFC about right for an income of 140K. Unless there was a huge increase in salary this year, I don’t understand how last year’s NPC yielded a manageable amount with an income that high. </p>
<p>My original FAFSA EFC without the property was around 25,000, which is what the NPCs say it would cost without the property. Although Duke’s actual EFC was 10,000 higher than what the calculator predicted…</p>
<p>I see this sort of stuff going on all of the time. Joint ownership of property is usually a nightmare without specific issues spelled out and agreed upon, signed as a contract by all involved. Even then it can be a problem because who want to force the issue to a lawsuit against a family member? I know a number of folks in this sort of deal and for the ones I know, it’s a lose-lose situation. </p>
<p>With the ownership of the property as an asset so properly documented, any sale of it over that amount as valued would be a realized gain and not only likely taxed but hit up heavily on FAFSA and other financial aid documents as it would be income. Then the money would be an asset unless spent. So I don’t see any quick resolution of this. </p>
<p>I’m not a financial planner so I won’t go into the possibilities. If your parents are willing to do so, they can take out a PLUS loan and that way they can keep you out of the picture. You can’t get a loan anyways for anything other than the Direct Loans and if the colleges gave you some Perkins money, that. So let your parents work it out. They can get interest deduction for the loan on their taxes as well as the tax credit for having a kid in college. They can repay the loan when they resolve the issue of the property. Good luck to them on that one. </p>
<p>But in this case, they do have a plan and an asset that they intend to parlay into cash that could pay off the loans. That gives them some flexibility. A family making what yours was is pretty much stuck in that the EFC is the least they are going to be paying, barring any large merit money that takes over the entire financial need, and if you can’t afford your EFC , you cannot afford the school without resorting to loans. MOst of the time, IMO, those who are in that situation can’t afford those loans either, which is why I’m anti loans a lot of the time. It’s not the loans but those who take them who can’t pay them back and are taking a chance of being sunk by them. But in your parents’ case, they do have an asset that they are planning to resolve and have cashed out that can take care of those loans. I agree that this isn’t going to get anywhere good having an 18 year old kid involved in getting the property mortgaged and split up. The further she stays away from this , the better. These things can turn into real headaches.</p>
<p>@OspreyCV22 - Yes, I think it was a little harsh, especially since you made a number of assumptions of which we have no idea if they are true or not. If you read my post completely, you will notice that at least a couple of times my main suggestion was that they seek out a professional who deals with these kinds of situations on a regular basis since that person would have all the detailed facts in front of them. The point is that it is at least an avenue to explore, even if it does turn out to be a dead end.</p>
<p>You started this thread with statements about so many of us so against loans and how they are so necessary for some kids. Sometimes, yes, they are. But sometimes, as in your case, they are necessary because the student wants to go to a school that their parents cannot pay for without loans in the picture. In your case, you parents appear to have assets and recourse in terms of paying back any loans they take out for you. But if they did not, if indeed all they can afford is the $12K a year, and that for 4 years only, you are really putting them in a corner asking for much more.</p>
<p>YOU cannot take out the loans other than what the schools have offered YOU in their packages… Anything more has to come from your parents. THEY have to take out the loan and are responsible for paying it back. You can promise the world that you will pay the loans back, but you are 18 and there is a very good reason why YOU cannot get a loan without a cosigner to take care of the issue. Usually, finding anyone to cosign with you on these loans other than a parent is difficult. Who entrusts an 18 year old to be able to repay these amounts in 4 years time? You are not a sound investment. </p>
<p>So as willing as you may be to swear you’ll pay these loans, there’s a good chance you might not be able, and then all bets are off. So, your parents should be prepared to pay off the loans they take for you themselves. With their particular situation, they should figure out what they can afford to repay in loans as they get that prperty and other things in order.</p>
<p>I don’t think it is about being against all loans but about encouraging students and parents to make the most prudent financial decisions, which means not just considering cheaper state schools but also considering what the students’ planned major is and only taking out more than 20 k over 4 years or so if your major has a high enough probability of leading to a job that pays more than what you’d get out of high school. That by nature excludes such majors as sociology, art history, _____ studies where _____ is anything the university offers and many language majors as well. </p>
<p>And I would also add that is about figuring out how to get the universities to be more responsible too. It may not be a popular opinion here, but I think universities that offer too many productive majors, lead students to believe a job in that major will be waiting for them when they graduate and constantly expand with brand new buildings and faculty hires, expecting student loans to cover all of it, should also be taken to task some way too. And again, I know many CCers will object to this.</p>
<p>An EFC of 25k is very, very low for an income of 140k. </p>
<p>We live in one of the highest cost areas of California, which is one of the highest cost states in the country if that makes any difference. The EFC was 27,000 and change - from the FAFSA, 26,000 from some NPCs. </p>
<p>I just tried $140K, California resident, 5 person household, zero savings, FAFSA EFC is about 31K. </p>
<p>Yup, 25K is a little bit low.</p>
<p>I understand that you think it is low, but I am looking at the email they sent me when I first submitted it and the EFC is 27, 349. Duke gave me an EFC of 24,000 before the property was gifted. I’m not sure why there is such a discrepancy, but I’ve run my family’s numbers many times and I know what they are.</p>
<p>Duke says that with the property my EFC is 31,000 and I followed their NPC guide to the letter so I’m not sure what the issue is there, although when I got my actual award the EFC was 40,000.</p>