Why are parents so reluctant to take out loans?

[sybbie719]

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The percentage of students receiving Pell grants might also be indicative of how economically egalitarian a school is and it would be based on all undergrads, not just those receiving Title IV aid:

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Sue22, I think the % Pell grant of the enrolled undergrads has meaning by itself. It shows roughly the SES mix you will experience among your fellow students if you attend. Controlling for the number of applicants in each income category would tell you if there is bias in admissions ONLY if you also control for their academic records. Perhaps low-income applicants are also less qualified academically than high-income students, or vice versa, thus leading to different admit rates. I think the percent Pell grants of enrollees is more telling about the likelihood of “fit”.

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<p>Not necessarily true, because you may still only be getting part of the story based on who is getting a Pell grant. As long as a student has an EFC of $5081 or below, the student is eligible for a Pell grant. You may have a student with a 0 EFC, who is getting a full Pell grant of $5645 or you may have a family with an EFC of $5081, who is receiving a Pell grant of $605. They are still counted as Pell grant recipients.</p>

<p><a href=“http://www.baruch.cuny.edu/financialaid/documents/PellChart1314.pdf[/url]”>http://www.baruch.cuny.edu/financialaid/documents/PellChart1314.pdf&lt;/a&gt;&lt;/p&gt;

<p>Another thing to take into consideration, a student could be a Pell grant recipient, while at the same time receiving very little in need based aid. Situation would not be unusual with divorced parents and blended families. Remember the FAFSA is filed using the income of the custodial parent. At schools that give the most generous need based aid, they require the CSS profile/ non custodial profile or CSS profile along with their own FA forms for the non-custodial parent. </p>

<p>Lets say student has a custodial parent making ~45k a year or a SAHP, who is divorced from a doctor/ wealthy lawyer, real estate/ IB/ family with $$ (choice is yours), who has married some one with similar earnings. </p>

<p>Based on the custodial parent income/asset, student would most likely be Pell eligible; perhaps not full Pell eligible, but Pell eligible just the same. However, once family files CSS Profile/non-custodial profile of custodial/non-custodial + step parent to determine institutional aid, everyone’s money, assets, cars, homes, pension contributions are now part of the financial equation.</p>

<p>Also, take into consideration that many child support orders end once the child turns 18 or have stipulations that non-custodial parent may only have to pay 1/2 the cost of attending in-state public university (none of this matters to the college giving institutional aid).</p>

<p>Stroll over to the FA forum, it is not unusual to find kids with divorced/single parents who make very little money, with high earning non-custodial parents or non-custodial parents married to wealthy stepparents (who are unwilling to pay).</p>