What happens if you parents can afford your college expenses but choose not to?

Paying for College
1

<p>In filling out a financial aid estimator for Princeton, it pretty much told me that my family can easily afford to send me to a private college. However, they have pretty much told me that I have X dollars saved for college and that is what I have to spend. I have always assumed that I'd get a student loan from a bank (e.g. Wells Fargo student loans), but is this even an option? </p>

<p>Or does it work such that I would get no aid at first but once I'm independent and my college money is gone THEN I get financial aid?</p>

<p>Thanks!</p>

2

<p>an independent student for FAFSA is one of following
is married
has a dependent
military veteran
age 24
has been a foster child and is ward of state</p>

3

<p>Hopefully you have a list that is balanced with schools that are with in the financial parameters that your parents have set in addition to schools where you also have a good chance of getting merit aid.</p>

<p>At 18 years old your chances of getting loans out side of the subsidized/unsubsidized stafford loans (private) are pretty nil unless you have built up a substantial credit history and have means of paying off the loan (yeah, it is kind of a vicious circle that way)</p>

4

<p>Can you explain to me how the subsidized/unsubsidized stafford loans work?</p>

5

<p>All Stafford Loans are either subsidized (the government pays the interest while you're in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). To receive a subsidized Stafford Loan, you must be able to demonstrate financial need.</p>

<p>With the unsubsidized Stafford loan, you can defer the payments until after graduation by capitalizing the interest. This adds the interest payments to the loan balance, increasing the size and cost of the loan. All students, regardless of need, are eligible for the unsubsidized Stafford Loan.</p>

<p>Stafford Loans allow dependent undergraduates to borrow up to $2,625 their freshman year, $3,500 their sophomore year and $5,500 for each remaining year (independent students and students whose parents have been turned down for a PLUS loan can borrow an additional unsubsidized $4,000 the first two years and $5,000 the remaining years). </p>

<p>I think the amount of stafford loans is going to be raised this year. The current loan limit of $5,500 for juniors and seniors will remain unchanged, while limits for freshmen will rise to from $2,625 to $3,500 and the limit for sophomores will go from $3,500 to $4,500.</p>

6

<p>The money set aside for me is a little more than 1/2 of what the elites cost. Does this change anything?</p>

7

<p>Stambliark - you have 2 choices: </p>

<p>(1) You can choose to attend a college that is affordable, either because it is public - or because it offers you significant merit aid. There are many excellent colleges that fit that bill.</p>

<p>(2) You can decide to spend the money on an elite education, bolstering the funds with your summer earnings -- knowing that the money will run out when you are about halfway through. At that time you might consider other options -- for example, taking year off to work and raise more money, looking into options to borrow the remainder that you need. You can also apply for scholarships along the way - not all require a showing of need. In college, you can also shave costs - for example, after your first year you can try to get a job as a dorm RA - usually this results in a significant reduction of housing costs. Even though your parents did not save enough for an elite education, having half of what you need is a significant boost. </p>

<p>--
Keep in mind that a financial aid estimator is not a true judgment of what your family can "afford" or should pay. These are tools used for colleges to decide how much aid they should give -- they are very arbitrary and often do not consider factors that affect a family's finances. </p>

<p>It sounds to me like your parents have done a lot for you by saving a substantial amount for college -- my guess based on the numbers you provided is that there is about $100K saved up for you. You are very lucky to have that amount -- there are a lot of excellent schools you could choose from that will offer good merit aid.</p>

8

<p>Let's go through it. COA at Yale is @$45,000. You have $22,500 that your parents have saved. They will provide nothing more and you have zero borrowing ability (no one to co-sign, no credit history) other than unsub staffords. That's $26,000 if Sybbie's correct (and if have a feeling she is;)) leaving you $19,000 short. </p>

<p>$19,000 . Then subtract summer money while some say $5,000 a more realistic number would be $3,000 at best. So we are at $16,000 (but are your parents going to give you any allowance in college or will your spending money come from your summer job or out of the twenty K? If so we are still at $19,000.) So now we are $16,000 hard dollars, after all loans, and all work (unless you are planning to work part-time your freshman year. Usually not the best idea unless it's a work/study job.). </p>

<p>I know of no way to lessen that number any further at a need-only school.You work, you borrow, you pay. That's it. While I think it would be foolish, some grandparents may be willing to co-sign on $64,000 in private notes for you but I can't suggest that is good practice or advisable for anyone.</p>

<p>In other words, given the parameters , Yale does not look like a possible choice for you . No matter that your grades, tests, essays , interview, etc may say otherwise. Contrary to what some folks think on this site, parent and student alike, the best qualified students don't always end up at the best schools. It probably won't work out for my kid either. Fair? No, I wouldn't say that it always is. Good luck, and I'm sure that if you put your mind to it you will find a great undergraduate experience.</p>

9

<p>Really this is the right decision. For the middle class (upper middle class?), paying $200,000.00 for an Ivy league education is nonsensical, irresponsible, and possibly even immoral.</p>

<p>The marginal benefit over a school like U Pitt that gives significant merit aid, as well as starting at a lower cost, is just too small.</p>

10

<p>Why don't parents have these conversations with kids BEFORE the college app process starts? </p>

<p>I just checked Stambliark's posts and found this list of colleges:</p>

<p>Harvard
Yale
Princeton
Stanford
Dartmouth
Brown
Duke
Amherst
Williams
Northwestern
Carnegie Mellon
UC System</p>

<p>I guess the good news is that if Stambliark is a California resident (and I assume that he/she is as we Californians are the only ones who insist on applying to the "system" - out of staters choose "Cal" or "UCLA") -- then there is plenty of money in college savings to pay for 4 years at any UC campus. </p>

<p>CMU is also a college that does give merit aid.</p>

<p>Other than that I see a list top heavy with reaches, all of which are essentially need-only schools - and a family that could have figured out that they wouldn't qualify for financial aid last summer. I hope that this is not Stam's full college list... but I'm thinking that it is.... and feeling dismayed because if Stam is a candidate for the Ivies, then there is probably a large untapped reservoir of merit aid at any number of excellent colleges that are only a notch down the rankings in terms of prestige. What a waste of application fees. </p>

<p>Stam, if you really have your heart set on going to a private college, you might want to check information on the common app site to see which colleges have Feb. 1 app deadlines -- there may still be time for you to get in a last minute app to a school that could offer good merit aid. </p>

<p>On the other hand, if your application strategy simply reflects a viewpoint that you are satisfied with attending UC if it comes to that, then I guess you will just have to wait and see what happens. You never know, maybe down the line of you get accepted to an Ivy, your folks will have a change of heart.
Also, if your parents' income is more modest but the online calculators are coming up high because of the value of your parents' California home, it may not be as bad as it looks. Some colleges use formulas that will cap the amount of home equity that they will consider -- so you could end up with a better award than you expect. Have you done the FAFSA? Is FAFSA EFC also out of reach, or is it a little bit better?</p>

11

<p>Stam,</p>

<p>If you have $100,000 in your college fund this combined with your parents EFC, it is very unlikely that you get any kind of FA from your list of schools unless you get some merit money from CMU ( I don't know if their merit scholarships are based on need- Curmie can answer this).</p>

<p>Your own student contibution off of your college fund (if it is in your name) is going to be 35% per yer.</p>

<p>the first year $100K * .35 = $35k (100k-35k =65k)</p>

<p>Year 2 - 65k * .35 = $22,750 ( 65k - 22.75 = 42.25)</p>

<p>year 3 - 42.25 * .35 = $14,787.50 ( 42,250- 14,787.50 = $27,462.50)</p>

<p>Year 4 - $27,462.50 * .35 = $9,611.87 </p>

<p>$27,462.50 - $9,611.87 = *17,850.63 remaining after the end of 4 years </p>

<ul>
<li>does not factor in interest earned on the remaining monies so individual mileage may vary.</li>
</ul>

<p>When you factor in your parents income and assets your numbers are probably going to be off the charts.</p>

<p>If you get admitted to your $45k Ivy: </p>

<p>Can you make up the 10,000 difference in year 1 if your parents contribute nothing? (remember the out of pocket gap is just going to get bigger each year.</p>

<p>OK, you will be able to borrow 3500 under the new loan guidelines but you will have a $6500 short fall. IF you work like a dog afterschool and over the summer and get a summer job on campus it may be doable. The down side to this scenario is that all monies earned out side of federal work study gets calculated toward your student contribution the next year.</p>

<p>I agree with Calmom in that there are probably a number of schools that have due dates with in the next 2 weeks and if you used the common app, you will not have to reinvent the wheel. Many of these schools you may be in line for some substantial merit money.</p>

<p>I am attaching the link to common app where schools are sorted by due date. I really hope this helps</p>

<p><a href="http://www.commonapp.org/search.cfm?pg=1&srtCol=4&srtOrder=ASC%5B/url%5D"&gt;http://www.commonapp.org/search.cfm?pg=1&srtCol=4&srtOrder=ASC&lt;/a&gt;&lt;/p>