Will 2nd income hurt Financial Aid chances?

Paying for College
1

<p>Hello,
We are a single-income family with 5 children, the first being a junior in HS. We are making ends meet with a salary hovering around 100k but keeping up with the needs of 5 children ranging in age from 17 to 3 leaves no current savings.</p>

<p>I have long debated whether to take a job working from home, ie. medical transcriptionist, or other legitimate source of secondary income just so we can save a bit. Our emergency cushion is dangerously low as it gets depleted but not replenished.</p>

<p>Question: will it be all for naught if I take a 2nd job from home only to have colleges require my income for tuition and still end up not being able to save for our family's needs? Is current income that heavily weighted?</p>

<p>It might also help to know that our most significant asset, our home, is significantly paid off. Years ago we tried to do the prudent thing and reduce our mortgage term. Will this also hurt us? Should we consider taking out home equity loans (we need to replace our 10 year old minivan and replace our roof soon) to reduce our assets for financial aid eligibility?</p>

<p>Thank you one and all for your valuable input.</p>

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<p>As a general rule, the more money you have, the more flexibility you have. Yes, current income is what is most heavily weighted since the aid formulas hit that up the most. Run a few sample EFCs (Expected Family Contributions) from the FAFSA estimators and see what it does But because it is a percentage of income, net of taxes that is taken into account, most of the time you still make out. Even keeping half of what you net is better than nothing. </p>

<p>There are a few situations where it might make a difference. If your EFC is close to a cut off for, some low income program, that has clear break points and the extra put you outside of such programs, then it could do more harm in such very specific instances.</p>

<p>The fact of the matter is that most school, by far and away, most schools DO NOT MEET NEED. It’s not like if you need is $40K a year, you are going to get the $40K a year for college, automatically. And that if you need less, well, you get les. Most school gap, pure and simple. You might get nothing whether you need $40k or $20K, or get some set amount regardless of need. The few schools that guarantee to meet full need are the most selective in the country, as a rule and getting accepted and a package that you can afford is truly a lottery ticket as they define need the way they so please, and yes, they will likely count your house as an asset and if there is Dad alive and about somewhere, want to see what his financials look like. As a rule, the better a student and higher the test scores, your kid is and has, the better the chances of getting a package that comes close to meeting need. In such cases merit awards may be in the picture too, so such kids have the most options. </p>

<p>So if your student is thinking of looking at those schools that require additional information over and above what the basic form, FAFSA asks, usually such schools ask for CSS PROFILE, then reducing your home equity instead of borrowing from outside lenders would help, since, the financial aid process will not recognize outside loans for things like car and private loans, but will recognize it as a decrease in home equity. </p>

<p>Run some NPCs for some schools that you may have in mind and see what they say your family will need to pay as well as what the FAFSA EFC is. Choose schools with no merit awards and that meet full need, like UPenn or Colgate as that will give you a cleaner picture.</p>

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<p>^^ I agree. I also think that money in the hand is worth more than potential FA assistance, especially if the difference when you run NPC is not huge. (If they expect you to pay $10,000 more a year in tuition and you make $15,000 for example, you’re still ahead of the game.) There’s more to life than college and building savings over the next year and having a job that may go on long after children put through school is important in long run.</p>

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<p>It may depend on the type of schools your kids apply to. Most schools don’t have much aid to give. Most don’t give any free money beyond Pell, and your EFC is already too high for that. </p>

<p>If your children will be attending FAFSA only schools, then your EFC is already around $20k per year. You might not get any “free money” aid at all. So, you’d be better off with the income.</p>

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<p>We are in the exact same boat! So glad that we are not alone out there. We are a one income family of 6 with an annual income of 80k. One of our children has a medical birth defect that requires many out of pocket expenses a month so our savings have been depleted. I am pretty sure that I will be returning to work when my oldest enters college in 2014. </p>

<p>Our current EFC is around 8k a year. So my goal is to get a part time job in order to afford tuition of around $12 to 15k a year. This also means that my D will more than likely be going to our local university or to a university that will award her a full tuition merit award bases on her stats and then we’ll cover the remaining COA. </p>

<p>Of course, my D isn’t pleased with the above choice because she wants to go to a prestigious school and not go where everyone else in her high school is planning on going. We will still let her apply to some reaches but we needed to have a plan in place for a financial safety for her.</p>

<p>It’s a tough decision to return to the work force. I wish you the best of luck on the decision making process.</p>

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<p>Housefullofgirls,</p>

<p>if your D has the stats to get accepted to schools that meet need, then she doesn’t have to settle for local Us. Of course, admission to those schools is like winning a lottery, but if she is competitive there, she absolutely should apply.</p>

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<p>All good advice. I’ve been a stay-at-home mother since leaving the workforce 16 years ago. My husband is the sole income provider. I worked in health care and if I were to return, even part-time, the hours would make it difficult to continue homeschooling/cyberschooling and being home for my littlest ones. Thus, I am considering work from home that is not exactly the same as before but with my familiarity with medical terminology, along with flexibility of hours, something like medical transcription would help close the gap between expenses and savings.</p>

<p>My oldest is a very good student but doesn’t do well with standardized tests. She could get some scholarship money but we are not realistically looking at Ivy League schools. U of Penn is the closest.</p>

<p>We are considering state schools such as Pitt and private schools such as Duquesne. Is there an advantage or disadvantage in terms of size of school regarding its ability to provide financial aid? I’m not talking about the Princetons and Stanfords with huge endowments (the lottery schools). For instance, is there a better chance at scholarships with a bigger school like Duquesne vs. a smaller school like Ursinus (both in PA)? Of course, this is only one factor to consider, notwithstanding the academic programs, etc.</p>

<p>I’ll have to run the numbers with different scenarios in the NPC’s and see what we come up with.</p>

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<p>Food4sole, most of the time, merit money goes to those who have the top test scores That is the brutal reality. So when you look at school, you need to see where your student falls in the test score range. If 15% of the kids at a school get merit money, your student likely has to be in the 5% to be getting a sizeable award, since the awards tend to run so that a lot of students get the smaller amounts, under $5K usually, and there are fewer getting the big money. The same goes for financial aid at schools that do not tend to meet full need. They do meet full need to some of their students, so your kid needs to be in that upper echelon that gets that amount. Say the stats (common date inf or USNews&WR Big book also has this info under each college) show that 20% of the kids get full need met. Again, your student has to be in the upper range, maybe the top 7% to have a shot that most of his need is met since, again, those with very low need are more likely to get it fully, met and also those special students that a college really wants. </p>

<p>I don’t know what the relationship is between size of a school and its ability to provide fin aid, but most state schools do not guarantee to meet full need, nor do they do so. In fact, I only know one or two that do. Most of the schools that do this, have a large endowment rather than large size of enrollment. But you can get that info by looking up schools in the book I mention above or in the Common Data for each school. It’ll give you average aid, average merit, % getting. All of those stats. The NPCs simply take those averages when you run them, but they won’t likely be specific to any person’s situation since it is a composite model, not individual. </p>

<p>Some good values are Catholic schools that are not as well known as Duquesne. Seems like everyone in the Pittsburgh area applies to that school. Maybe King College or Gannon or Scranton. more off the beaten track.</p>

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<p>I was in the same situation a few years back. At the time, I think I figured out that I could earn about $10,000 without changing the EFC at all (I played with EFC calculators to get an idea). I eventually earned more, but I didn’t spend any of it to enhance our quality of life … instead, it all went toward school (and increased taxes, sadly). It worked very well for us. D went to a 100% need-meeting school that gave us lots of money, and S goes to a state school. S gets a small scholarship, but we pay more for him than we did for D’s expensive school … and he lives at home! Fortunately, we are in a position to pay, since I am working now. Best wishes to you.</p>

<p>By the way, it is a real life-changer when you return to work after many years at home. It was almost 20 for me … :)</p>

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<p>You may want to check into UDayton & John Carroll for merit aid.</p>

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<p>kelsmom-I give you a lot of credit. It’s nice to see other people in our situation make it work somehow. I can’t imagine going back to the same work I did before. I’d have a lot of re-learning to do. Not impossible. I still have a 3 year old, 8 year old and 13 year old in the homeschooling range. That’s why I’m hoping to find some work from home.</p>

<p>I’m sorry I was misleading in terms of where we’re located. We’re in eastern PA, near Allentown. Daughter is considering Duquesne for pharmacy program and she’s heard great things about Pittsburgh. I think I’ll look into some of the suggestions for Catholic colleges nearer to us.</p>

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<p>You might want to look into educational test scoring. ETS uses at-home scorers. There is another service that does, too - I can’t remember the name - but some googling should turn up info. The pay is pretty decent, and you can name your hours.</p>