Two easy fin aid traps for parents

Parents Forum
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<p>I know most of you are sophisticated folks and already know all of this. Well, I didn't prior to coming to this board and recent posts lead me to believe some posters are unaware even now. This is directed only to those who have juniors. Those who have seniors already have this figured out. I figured it out a while back. Just haven't come up with a plan to attack it yet.</p>

<p>It appears that many of us middle-income parents are quite amazed when we get hit with what we think is a triple whammy. </p>

<p>This applies to all of us-their efc and your efc won't match and the more complicated the situation, the more off it becomes, in their favor-always.</p>

<p>Next, once we learn that our EFC is $30,000 , we are pleasantly surprised to find that the COA (costs of attendance ) is a liberal number, substantially higher than "hard costs" paid directly to the school, let's say $43,500. Assuming we are at 100% of need school , that looks like $13,500 need based award. O.K. That $13,500 and we feel O.K. with the unsub loan, that's another $26-2700 up to $5500 4th year so.......</p>

<p>What do you mean that's already in the $13,500? The loan she took from the feds is aid you gave her? How is that the case? I can understand if you loaned her your money, but you didn't do diddly and once it's taken , she can't get anymore. $2600-2700 is the max. O.K. well we still have the $13,500. How are we going to come up with $30k? Sell a kidney or two? Internet porn site? Capture Osama? Garage sale treasure hunting? I've got it! Drop down a tier or two and look for merit awards!!! That'll work. At least she can get something for her 18 hr workdays since she was in the womb.</p>

<p>O.K. Nix Bowdoin and we head to , Kenyon or Lawrence or Allegheny. Top merit award is $15,000 . With that $15k and the $13,500 need based award we might can ......</p>

<p>What? You have to be kidding! We already had the need award, didn't we? You mean she gets nothing from the need award because her merit takes her out of "need"? What good is it then? Oh, now she CAN borrow from the fed and add that to her award. Ok. So now I have $15k + @$2700, that leaves me -nowhere to go.</p>

<p>No wonder so many kids end up only applying to their state schools and the top-most and most generous reaches. If your efc is $25 or $30k , and you can only afford $10 or $15 and parent borrowing is out of the Q because of no equity or poor credit rating or you're just so damn old or infirm it's suicidal, and the kid can't borrow because of no credit history, Congratulations- you have now become one of the 10,000 parents chasing that 1 or 2 full tuition scholarships that LAC#132 gives out as a teaser. The race is on. </p>

<p>Until this board ,I really thought it worked the other way ,merit came off of net. It appears not to be the case at any school D is looking at. Middle class squeeeezzzeed again. Might as well shoot for the top schools where her stats say she has a chance and pray for the ol' monopoly card- Fin Aid makes error in YOUR favor! LOL. I remain so happy I've told D all along, I can pay X , an amount roughly equivalent to our most expensive state school COA+ she can take out unsub loan. That's it. That's all we've got and that means cutting off cable, no motorcycle, no trips, no retirement contributions, delaying debt repayments,cheaper trucks. Anything above that I can't (not won't,can't) do and survive.</p>

<p>Just thought the few folks who didn't realize this , might as well know now.</p>

<p>D's fine with it and her two safeties are two of her favorites, thank you God. We looked at a school that looked good but top merit $12,500 with a coa of $40,000. Had to tell her, no need looking at that one, babe. Can't afford it. Doesn't seem to bother her that much. It's killing me but hey...I'm old.LOL.</p>

<p>Anybody else got a night scope? I hear the weather's getting better in the mountains of Afghanistan.</p>

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<p>DD got all her Financial need met with grants/scholarships, and her school set our EFC at a reasonable amount. We scrape together our EFC (like you say, no contributions to retirement, garage sales, make our own bread, etc.) but we feel LUCKY!!!!

[quote]
We looked at a school that looked good but top merit $12,500 with a coa of $40,000.

[/quote]
That's what gets me! I guess if you don't qualify for any need-based aid, then a half-tuition scholarship looks good. If you're like us, with an EFC about equivalent to in-state tuition/r+B, then a half-tuition scholarship (or even 3/4 tuition) isn't enough to bring it down to the cost of instate tuition. And then there's the problem of tuition increases. Your merit aid is set at 1/2 X dollars - tuition the next year is x + $2000., the next year x + $4500., the next year x + $7000 - but your merit aid stayed 1/2 X. Luckily, DS is pretty enthusiastic about instate public schools.</p>

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<p>Yes, when your EFC is $30K, it means that YOU have to come up with $30. When the school comes up with packages with loans, those are for your D to take, and they usually have more favorable terms. It appears that Bowdoin gave her only the federal maximums, and some schools even exceed that putting a burden on the did. But the parents now have to come up with the $30k. If D gets a merit award, it does not come off the EFC in most cases, but off of the aid package. This way, you can find loans in the federal rec range for D to take which would be about another $2500 off the EFC and if she works like a fiend over the summer and makes $5000, that is another dent off the EFC and if she can make about $2000 working at school, given that her merit award is about $2500 over the EFC whic leaves you with $17500 to cough up. In schools where she gets a package that has loans and work study already in there you are that much more behind the 8 ball especially with no excess in grants. Yeah, that is the way it works. </p>

<p>When you see kids getting a $25K grant, it sounds great, but a school like NYU costs $50K. That still leaves $25 K to fund and there is rarely need above that funded. $25K is an awful lot of money to come by when SUNY is about $15K total, and anyone who gets that kind of grant money from NYU is likely to get a nice grant from a SUNY bringing down the cost to very little. My son got total COA plus for a SUNY 4 years ago. Hard to beat that deal. If you look at some of the post from last year, there were alot of comments about eating kibbles,and other austerity measures. There is many a truth hid in jest.</p>

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<p>Our EFC came out to $60,000 (!!!), in part due to money we have saved. So, that half-tuition scholarship will be a god-send. It is especially good that it will continue to go up with tuition. We figure that between that, money we have saved, and the pain we are already used to (private school tuition + expensive music lessons) we will "only" have to scrape up another $7,000 per year. Ouch.</p>

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<p>Our "need" figure has been very constant among the schools. How they meet said need is a different story. Collegeboard.com has an aid package comparison calculator thingy that is very helpful. It shows you the student burden, the family burden, and also the % of your award that is grant/loan/work.</p>

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<p>jamimom,$43,500-15,000 merit-2,500 loan -5,000 summer-2,000 work/study=$19,000. $19k ain't between $10 and $15k. That $4 to $9000 is not there for a lot of people. A parent PM'ed me to day that the cost of insurance that hadn't been figured in by a school made it untenable. Once the cupboard is bare-it is bare. Can't be there .Kibbles or no kibbles. There becomes an absolute limit. </p>

<p>And anyway, I won't dispute the $2k work study money, but that $5k summer ain't happening in our town. Even at 60 hours a week that is only 600 hrs. of wages at $6.00, minus taxes that's not going to be $5k. Minus the gas to get there 40 miles roundtrip per day, kids might net $2500 to $3000 max. in the ten weeks they get off (required summer band eats up the other two). (for reference look up wage rates for Central Texas cities of less than 50,000 people for service employees). </p>

<p>You made the statement that "If D gets a merit award, it does not come off the EFC in most cases". What did you mean by that? Are there schools that calculate merit differently?</p>

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<p>So if your EFC is well over full tuition and you get a merit award, you really get it?</p>

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<p>Cur...no 5K summer jobs here either. Are you sure they didn't mean "child's contribution" as in child's assets? Does your child have college savings?</p>

<p>We've seen two things happen with merit aid. In some cases, the merit aid was coupled with small university grants to help meet need. In most cases, my kids shouldn't have bothered because the merit aid is reserved for the students who do not qualify for financial aid, to help attract them. We received college "scholarships" or "grants." </p>

<p>One of my son's school last year had a variety of scholarships you could receive, but there was a limit. You could only get so much, even if you qualified for more of the scholarships. </p>

<p>When they determine your family contribution, they are not going to drop below that with merit aid (edit--when you are also receiving need based). We are holding our breath to see what our oldest will receive this year as our EFC dropped with two in. Our second will be okay. The first will probably max out on the federal loan, the work study, and then there is room to increase the grant, or...increase the loans. The fin aid officer thinks a little of both.</p>

<p>Oh, and that 2,625 Stafford...that's just standard issue, creeps up each year...</p>

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<p>suze--yes...if your EFC is over tuition, a merit award then brings you below your EFC. That is the intent. It the school's hope that they will get you to enroll because they are less expensive than another.</p>

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<p>You've got it. The state school is our safety, admissions-wise and maybe financially too, and the reach schools work better financially than the schools in the next tier down. Crazy, isn't it?</p>

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<p>Well, I think we've figured out part of the top school application explosion, haven't we? LOL. Man, if a second tier (50 through 100) school figured out they could raise their class profile by a 100 SAT points or more overnight by instituting a merit off of net (after need) -even if that merit was reduced somewhat, they'd get (almost) every high stat middle-class kid in America.</p>

<p>TexasTaxiMom, I was referring back to jami's post about the 5k. Although I have "quoted" numbers, they are made up as D is just a junior. I have posted before that our EFC will be used as a fin aid officer's final exam quiz for years and years. We have every screwed up financial thing imaginable from multiple businesses to ranch that we live on to hideous depreciation to personal service businesses with high gross and small net-every conceivable problem area except I am married to and live with the child's mother. LOL. Other than that I have every single red flag and point of contention.</p>

<p>Using calculators I can come from a $17,000 EFC to a $37,000 EFC-depending on charectorization of particular income or expense or asset items. I'm just planning an exit strategy because I can find no way to get a read on what the EFC will be Fafsa or Profile.Not a clue. I wish I could just sit down with someone real and say-look,here's what I got-where should my kid be looking? If EFC is $17 she's applying to Dartmouth. If it's $37 ,she's applying to state U and 20 merit schools with giant merit awards. But since I don't know and can't find out-I'm still lost.</p>

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<p>We found that it is not a set number. The private schools take other things into consideration. They use the CSS profile. Some schools even have an additional form just for their school. The privates have been more generous with the EFC number, at least by our calculations. HOWEVER, how they meet your EFC is a different story. </p>

<p>My son's packages vary from 7% loan and 5% work study to 32% loan (almost half in his name alone) and 8% work study. Same "aid" figure...different way to disburse aid. So even if you could peg this EFC, you really can't tell how they will meet it. Schools that say 100% need met for 100% of the students and show average indebtedness of about 17K will not be loading your kid up with loans. Other schools don't claim to meet need. Still others gap students they aren't as hot and bothered over.</p>

<p>Welcome to financial aid hell. I think it's one of the rings Dante forgot....</p>

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<p>Boy, am I learning! Here it is late on a Friday night and I am going through FINAID. What a wild woman I am. <tongue in="" cheek=""></tongue></p>

<p>None of the schools DS applied to came close to meeting our EFC. Most are $8-$10K over the EFC amount. (and none wanted profile done so I am assuming it is all based on FAFSA?) Is this normal?</p>

<p>Glad he really liked the state school-it may well be the only option.</p>

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<p>This thread is like "look Mom the emperior has no clothes on." There really is a trapped-in-the -middle reality for families trying to pay for higher education in the US. And just like other businesses, colleges hire outside consultants and then sit around in committees and figure out how they can get the highest yield with the least output. I have telephoned the scholarship coordinators at the colleges my son applied to. On such person indeed told me that he will not stack scholarships, meaning that even if my son qualified for several types, the school would only award up to a certain amount. And thus there would still be a gap. The only way around this I have found is to look way down the list into the 3rd and 4th tiers. </p>

<p>Or maybe I could sell my life story to the tabloids...</p>

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<p>


You have got to be kidding. If I'm reading this right part of the loans are kid's name only, who are the other names on the other part? Y'alls? How is this aid if the parents are the one's borrowing the money? Any parent who has the credit and ability to pay the note back can borrow plus funds up to the full amount of tuition-the school can't possibly be counting that as aid to the student. That is just cheating, isn't it? At the least it is deceptive.</p>

<p>And just so we can be complete, don't go run out and buy little Ben Kaplan's book or go on Fastweb, none of that stuff helps either. Get 10k in outside scholarships almost every school takes it all from you and says thanks for your help. You get ZIP nada,nothing for your efforts (if you are also getting a need award.) Now ,if you get merit aid only you can keep the $500 from the VFW. But not if you have ANY need. Seems fair to me. In other words folks, tell your kids to put the pens down, that essay to the milk folks is just gonna costs you the postage. Your kid, if there is a need award at all, has to report it and the need award is auto reduced-usually one for one.</p>

<p>So let's say a kid does get $4000 in scholarships from local organizations and has a need award of $8k. $4,000 grant,$2625 fed note,and $1375 work study. The school can take away the grant, and you get nothing but the self-help loan and work-study. These scholarships if they are reported as the school's require do not help a student who is getting any need based aid and are a total waste of time and effort.They are useful only to those who have zero need or that rare school that let's you keep them. None of D's choices let you.</p>

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<p>Yeppers, cur. Shall I get the smelling salts? There is your EFC. Below that they don't care how you pay it...loans, savings, sell your house, kidneys, etc...above that is the "aid" package. </p>

<p>There is "free" aid. grants/scholarships etc...
There are student loans...low interest, high interest etc...in their name.
There is work study. (which doesn't come off the bill, you back it back into the cost because who really knows if your kid is going to get a job that nets the full amount?)</p>

<p>You can decline the loans and work study and roll that into how ever you plan to pay for your family contribution.</p>

<p>Don't be fooled by the first financial aid award number. That will have the loans, works study and the free money in it. You have to look at the free money alone.</p>

<p>In the worst package we received, my son would carry over 11K in loans and work study, and we would carry another 12K in loans (we being the parents) And that is just the first year. Most of his good packages have the 2,625 loan or some equivalent, and about 2K work study. Our family contribution would be 8-10K depending on the school. The rest is grant. BIG DIFFERENCE. All schools met the same "need" figure.</p>

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<p>texastaximom, how can they give you loans? You haven't applied or qualified for any notes. How do they know your creditworthiness or your ability to pay it back? Are you saying it's just sign and go? What if a parents cash flow or credit doesn't support that 12k loan,what then? and where can the kid get the difference between the 2625 and the 11000 loan/work study you mentioned? Private loans with just the kid's name? How does that work when they've never had credit or a real job?</p>

<p>I've always wondered how these kids say "I'll just borrow the extra $10K a year on top of the $2625." I always thought they were just hallucinating. Is that real? Is there some lender that writes $10,000 a year notes to 18 year olds majoring in Old English Literature?</p>

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<p>
[quote]
How are we going to come up with $30k? Sell a kidney or two? Internet porn site? Capture Osama? Garage sale treasure hunting?

[/quote]
</p>

<p>You're a lawyer, right? Missed your calling! Capturing Osama would really be good - $25 mil, or has it gone up? Personally, I like the Mega-millions - $78 mil last I looked.</p>

<p>Cur, do not worry unduly. There is excellent merit aid out there. My son got offered a cumulative total of $514,000 in merit aid from 6 schools (4 private, two public) - four full tuition awards, one free ride + stipend, and one $50K over four years. This is an area where tons of research pays off handsomely, perfect for a doting parent with a number of months lead time (8 months before EA - and stating the obvious, don't do ED if you are going for max merit aid).</p>

<p>If you have already gotten an outline of your daughter's preferences, start with the 'long list' and get on the web sites looking for merit aid for which she would qualify (e.g., if she doesn't happen to be a science superstar, she is unlikely to get the Caltech full tuition award). Look all around the country, up to the limits of whatever her geographical preferences may be, including both universities and LACs. I am betting you will have a group of between 15 and 25 schools that she could be interested in and that in your judgement would provide a quality education. </p>

<p>She has to do her part by continuing to "put out" and do what it takes to stand out in her ECs and/or academic awards/accomplishments - get as many jewels in her crown as possible. </p>

<p>Don't overlook the depth of merit awards at a college either. For example, S got a full tuition award from the Emory Scholars program, but there are also 100 2/3rds tuition awards and other specific scholarships with meaningful awards (like debate). Plan to apply to at least 8 schools where there is a very-good-to-pretty-darn-fair chance of a merit scholarship.</p>

<p>The problem will be getting her to select one of the merit award schools if she has her heart set on a non-merit award school. (aka, the "How you gonna keep 'em down on the farm once they've seen the big city?" effect or, "Bright lights, big city, turnin' my baby's head") There, in hindsight, I believe it is very important to set a fixed limit in advance on how much you will spend, or (if it is the case) that you will not allow her to apply to non-merit aid schools and that you are not in favor of loans in today's economic climate. </p>

<p>I kept the landscape fluid based on certain hard-to-predict elements in my financial picture, stating that I doubted we would be able to swing the non-merit aid schools, but we would see what they offered and that the final decision would definitely depend on financial factors. I think my approach was too rational for a teenager (I must have reverted to habit and thought I was preparing to negotiate a big buy software purchase with a vendor) and I may have my hands full in the next week or so with this issue since, although I did not exaggerate, my 'soft' approach left the door open for "please please please." Perhaps you are better at the "authoritative parent" model and if so, you will plan and market the solution path more effectively than I did, up front. My only option is to hang tough at the end of the process and sell, sell, sell the tangible and intangible benefits of the couple of schools that offer the best overall value.</p>

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<p>A note on outside scholarships--they still do help at most colleges. I know Stanford will reduce loans and work study first for outside scholarships, so they have helped son #1 keep him loans down to a very reasonable level. Lawrence, where son #2 may go, will take the first $1000 off self-help (loans or work study--student gets to choose which); after that, half comes off self-help, half from need-based grants. So they can still be a way to help keep loans down.</p>

<p>Our aid offers have varied greatly. One college offers $11,000 merit aid, an added amount of need-based grants, and about $5000 a year in loans and work study. A couple more have not yet given a complete answer, but do give $4000-$5000 in merit aid for particular SAT scores, NM Commended status, etc. (These are less expensive schools.) A fourth, rather expensive, out-of-state public sent an "award" of $5000+ in loans and work study, and that was it, no grants at all, even though they calculated our "need" as over $20,000. Unfortunately, my son just received a letter admitting him to their school of music, and he is interested again. But he knows there is no way we can manage it. </p>

<p>This college stuff is just a roller coaster ride, isn't it?</p>

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<p>Just checking so we can all be depressed at once. Example. My little sister has one daughter. Smart kid. Sister is a well paid nurse. Got breast cancer. Husband left her . Missed a lot of work. Had to file chapter 7 , discharged in 2004. Healthy in 2005. House paid for. Makes enough to where she has an efc of $15,000. Daughter wants to go to Vandy. Assume she applies and gets $20,000 merit award. Vandy COA of $45,000.</p>

<p>So now $30,000 need-15k merit, are you telling me that the other $15,000 can be packaged as , work/study that she may or may not actually get, the fed $2625 loan, loans for the kid to sign above $2625 and loans that my sister won't qualify for makes up the rest? And they'll call that 100% of need? And she still has the other $15k EFC to pay? Do I have this 100% of need thing down about right?LOL.</p>