Why are the answers to these questions not easy to find???

Paying for College
1

<p>My son is about to start college application process. The cost of tuition, Fafsa, possible scholarship money is quite confusing. Everything I read and hear seems to miss several very basic points. CAN ANYBODY HELP PLEASE?</p>

<ol>
<li>What is the family income/assets threshold that cannot be crossed for FAFSA aid?
How much can a couple with an income of $120,000 a year/1M asset expect from FAFSA?</li>
</ol>

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<p>2.What scholarships are available (any?) for students whose family fall into this income bracket? (Most seem that they are for students from families of much lower income). My son is 100% hispanic (born in a hispanic country), mom has a master's degree in US. All scholarships for hispanics seem to be for students with greater financial need or 1st generation going to college. </p>

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<ol>
<li>Ivy League and other universities ALWAYS stress "apply to our school...don't worry about high tuition and other costs, we give most students large financial support so don't get scared by the numbers on paper or on our website". </li>
</ol>

<p>Is this true for somebody in the financial bracket mentioned above or this is only for students with greater financial need?</p>

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<ol>
<li>Is financial aid total included with acceptance letter or is that a secondary step that needs to be taken afterwards? </li>
</ol>

<p>In other words, is the exact cost ("drive out price") for the 4 years (minus future tuition hikes)told -so we know exactly how much he will be on the hook for-included with the acceptance letter?</p>

<ol>
<li>If the financial aid package offered by the school is not enough, is there a way to appeal it?</li>
</ol>

<p>Are there any other things along these lines that I am missing?</p>

<p>Thanks for much to all for taking time to read this and helping our family.</p>

2

<p>It’s a huge myth that money is not an impediment to attending those schools who meet full need. They meet full need as THEY define it, not you, and usually not the government.</p>

<p>FAFSA is necessary for almost all financial aid. What it does is vet your student for federal funds. Many schools and other organizations will use the FAFSA figures as well, but most schools that meet large percentages of need also require a second form that goes into more detail and has some other stipulations.</p>

<p>FAFSA generates a number called the Expected Family Contribution (EFC). It is heavily income driven. You will need your IRS form 1040 (or its counterpart) and a list of your assets as of the day you complete the form. It is wise to pick a day when your accounts are more depleted rather than full. The EFC does not take into account primary home equity on non custodial parent information, but does want the financials of the spouse of the custodial parent. </p>

<p>All the EFC does is qualify your child for the PELL grant if your family is very low income and allow him/her and you to take out loans. It’s obvious your child will not qualify for PELL. S/he will be permitted to take up to $5500 in Stafford loans, some of them maybe subsidized depending on the cost of the college s/he picks. You can apply for the PLUS as a parent. </p>

<p>Those schools that use FAFSA only will look at that EFC and give whatever financial aid they can to your student. The problem is that very few schools guarantee to meet full need, and even few, hardly any, maybe none guarantee to meet the need as defined by FAFSA. Some states have programs that use the FAFSA EFC . NY, for instance, has TAP and HEOP which are for low income kids and the FAFSA is needed to qualify. Some merit scholarships that have a need componet will also want the FAFSA numbers.</p>

<p>So then you have the colleges that do meet a good chunk or all of financial need. Most all of them require an additional form, PROFILE that often does include home equity and all parent information as well as sibling account, and sometimes cars and other large material assets. 401K and other funds can also be taken into account. Since the school is using their own money to meet need, they can use whatever they want to determine it and to meet it. </p>

<p>Then comes the form in which need is met. There are the grants which truly reduce the cost of the school. Then, you have loans that just postpone it. And workstudy where your student can earn some money. But then your student can work anyways. And maybe you have better venues where you can borrow. Some of those interest rates are no bargains.</p>

<p>Run your numbers through a FAFSA calculator and it’ll give you some idea what you are supposed to be able to afford for your child’s college, given your income, assets, age, and other family members you are supporting. That is a good starting point and generally represents the most you will be getting. </p>

<p>Now merit money, scholarships, are a whole other story, and may not have need as a component.</p>

3

<p>At your income bracket, you will need to look at merit scholarships, not need based. Are your son’s grades high enough for that? How did he do on the PSAT - enough to make finalist? Does he have any outstanding EC’s?</p>

<p>Scholarships for minorities are meant to give a hand up for people who need it; those with parents who are educated and decent incomes aren’t considered in need of that help.</p>

<p>Merit scholarships are often announced with the acceptance letter, as they are automatic many times (at the school my youngest attends, for example, any one with her GPA and her SAT scores receives an 80% tuition discount). Look at the financial aid offered by schools that your son is interested in attending.</p>

<p>The Ivies do not give merit scholarships, as every one who is accepted to those schools would be in similar academic rankings. All of their aid is need-based; again, you can get that information from their websites.</p>

<p>As for appealing financial aid decisions, it can be done if there are special circumstances. But that will be hard to do if you have those kinds of assests. Educations for our children is considered an investment and a sacrifice; the schools don’t owe cheap educations to them.</p>

4

<ol>
<li><p>collegeboard has a pretty good financial aid calculator which will run numbers for both fafsa-onlhy schools and Profile schools (many top privates). Of course, each college is different on how they treat home equity – some cap it at a multiple of income, while others do not.</p></li>
<li><p>many colleges offer merit money and would love to have a high scoring Hispanic. The Ivies are need-only.</p></li>
<li><p>Yes, with the income, you would be eligible for need-based aid at the Ivies. But depending on the nature of the assets, it will decline fast. (In general, approx. 5.6% of the asset gets counted for EFC.) Home equity will be capped at Ivies. If your assets are liquid (cash/stock/bonds), then aid would be minimal if not zero (since 5.6% of $1MM +…)</p></li>
<li><p>Separate process. If you apply ED, however, colleges make an attempt to produce the aid calculation at the same time as the acceptance.</p></li>
<li><p>Yes, but you need factual reasons – not emotional – to appeal. For example, excess medical expenses would be one reason to appeal.</p></li>
</ol>

5

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<p>FA is only for the current year, so your aid letter will not talk about subsequent years, though they may offer some aid that is renewable if some conditions are met. In other words they could give you an indication of what aid you might get in future years, but they are not going to guarantee the cost in future years. </p>

<p>Some colleges offer prepaid tuition, you pay for 4 years in advance and we will not change the price etc. Most colleges do not predict how the tuition or costs may change from year to year. You can make assumptions say a 8% tuition hike. Similarly, you have to make assumptions about your salary and assets. If you expect that you or your spouse may get a big bonus, you need to factor that. In other words, you can make educated guesses about what your total cost will be but the colleges only take one year at a time. You have to remember that your financial situation and that of the colleges can change from year to year. In 2007 endowments of colleges took a big drop due to the stock market, so their ability to give aid changed.</p>

6

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<p>The FAFSA is primarily used to determine eligibility for federally funded need based aid. If your EFC is more than $5400 your student will not be eligible for any federally funded GRANT money (the Pell).</p>

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<p>The FAFSA doesn’t GIVE money. It’s a financial aid application form only…that is used by the colleges primarily to determine eligibility for federally funded aid. With your income and assets…you would NOT be eligible for any federally funded aid (in my opinion)…except an unsubsidized Stafford loan. With an income of $120K and one MILLION dollars in assets, did you really think you would be eligible for need based aid?</p>

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<p>Your son’s SAT/ACT scores AND his GPA will be the determining factors in awarding merit aid…scholarships not based on need. The best scholarships come from the schools themselves. Check to see schools where his stats are at the tippy top of the applicant pool and where merit aid does not have a need component.</p>

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<p>There are some Ivies where the aid is generous even for folks with salaries up to $150K with TYPICAL ASSETS. I will venture that ONE MILLION dollars in assets well EXCEEDS typical.</p>

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<p>You have two separate questions here. </p>

<p>First…financial aid awards are typically sent out either with or very shortly after the acceptance letters. You MUST complete ALL financial aid application requirements ON TIME for this to happen. Check each school for what it requires AND the deadlines. Do NOT miss the deadlines.</p>

<p>Second…any need based financial aid your child receives (I don’t think you’ll get much) would be for ONE year only…you apply annually for need based aid. The aid and costs for ONE year would be in the package so you would know what YOU are expected to pay.</p>

<p>For merit aid, sometimes this is renewable for a certain number of years with a criteria for renewal. You would need to read your aid packet to see. In any event, many schools still require you to fill out the financial aid application forms regardless…every year.</p>

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<p>Sometimes. Some schools will discuss your package and others simply will not. The most successful “appeals” show an extenuating circumstance that was not reflected on the financial aid application forms (FAFSA and PROFILE or school form). This could be job loss, high unreimbursed medical expenses or some other financial crisis that happened AFTER the applications were sent.</p>

<p>Schools typically do NOT “negotiate” merit aid at all. They have a criteria for awarding it…and most do not bend on this criteria.</p>

<p>With an income of $120K, your EFC (family contribution) will likely be in excess of $30K per year. Add to that the 5.6% of your $1Mil asset the amount of $56K which WELL EXCEEDS the cost of attendance at almost ALL four year colleges.</p>

<p>How much aid did you think you might need…or be eligible to receive?</p>

<p>Edit…You need to check the schools. Most generous schools use the CSS Profile in addition to the FAFSA. The Profile financial data is used by these colleges to determine need based INSTITUTIONAL money. Since your income puts you out of the running for federally funded need based aid, this is what you would need. The Profile schools will use your income AND assets to determine your need…which I do believe will be minimal based on what you have posted here.</p>

7

<p>Something you need to consider is how strong your son is based on his profile. FA also takes into account the desirability of the candidate to that school. Yes there is needs test, but not everyone who has the same need will get the same package. One might get a lot of grants, the other a lot of loans. Some schools with less diversity may want to woo your son as he is Hispanic and give him better aid, in other schools it may not matter.</p>

<p>FA is not totally scientific, there is an amount of human decision making that goes into the package. Some schools (especially the top ones) are more up front on what you can expect and you can use their own calculators, others decide it on a case by case basis.</p>

<p>That is why you need to have a financial safety, this has been repeated over and over again on CC. You need to have school which is acceptable to your son, which you can afford and in which he is more or less sure of acceptance. It may not be his first choice, but is a good choice. For top students, it is usually the flagship state U. Some state U’s are very highly ranked.</p>

8

<p>This OP says their family income is $120K per year and they have one MILLION dollars in assets. If this is the case, there will likely be no financial need by any college so preferential “financial aid packaging” (i.e. grants vs loans) won’t be an issue. If you don’t have need, the school is not going to CREATE financial need just to woo you.</p>

9

<p>davaso -</p>

<p>You need to sit down with your spouse/partner/whoever else will help pay, and come up with what your own family can afford to pay. That is your bottom line. When the adults are on board, sit down with your children and tell them what your contribution will be. In addition to that amount, your children can chip in their own earnings, student loans in their name (Stafford loan limits are $5,500 freshman, $6,500 sophomore, $7,500 junior, and $7,500 senior), and something from their own savings. Chances are that there will be at least one college or university that your family can afford out-of-pocket.</p>

<p>Once your children know what they can afford, let them know that anything above and beyond that will be up to them. Total family budget of $55k/year and kiddo wants one that costs $65k/yr, then kiddo needs to scare up enough merit-based aid to cover the difference.</p>

10

<p>With 1 Mil in assets and that income you won’t get financial aid anywhere…unless that 1Mil in assets is in some kind of very protected retirement acct.</p>

<p>Everyone can get a 5500 student loan.</p>

<p>*3. Ivy League and other universities ALWAYS stress “apply to our school…don’t worry about high tuition and other costs, we give most students large financial support so don’t get scared by the numbers on paper or on our website”. *</p>

<p>Ha ha ha…my sister would laugh hysterically at this. She has 2 kids at elite schools and she pays FULL FREIGHT for BOTH kids. She doesn’t get one dime of aid. She could have her kids take out student loans, but she doesn’t. </p>

<p>Their financial situation is this…good income (H is an engineer, sis makes little), and very good assets because of inheritance. </p>

<p>Again, they get ZILCH from elites.</p>

<p>We have a good income and high assets (rental property) and our EFC is too high for any aid anywhere…even with 2 in college. </p>

<p>No school, not even Harvard, will give a dime of need-based aid to someone with high assets and/or very high income. </p>

<p>BTW…FAFSA is just for federal aid. you have to have a very low EFC (like below 5000) to get any grants.</p>

<p>Your FAFSA EFC is going to exceed the cost of any school.</p>

<p>Your CSS Profile family contribution will be full freight as well.</p>

<p>If you can’t afford to pay full freight, then look at schools where your child’s stats will get merit scholarships.</p>

11

<p>This thread is a really good summary of “everything financial you need to know in one page”, especially for first time college applicants.</p>