Will I get any aid? (High family income...)

Paying for College
1

<p>Before anything else, I'd like to say that I'm still in eighth grade, so this is nothing urgent. I'm simply curious.</p>

<p>My parents make about 140k a year. (Gross income, I think). My mom is disabled and cannot work, but does not get Social Security checks as she didn't want to go through the legal process. She does, however, receive money from the USDOT, her former employer, as they recognize her situation. My dad, on the other hand, makes most of our money.</p>

<p>I understand that once I finally reach college, we won't get a lot of aid, but will we be expected to pay a LOT? We aren't rich, even though we might appear so on paper. My parents balk at 40k tuition, so I'm quite worried. Will we get substantial help?</p>

<p>Sent from my Desire HD using CC App</p>

2

<p>As an 8th grader, you have lots of time to look at and consider college choices. Things you can do:</p>

<ol>
<li><p>Look at colleges that are within your family financial criteria.</p></li>
<li><p>Make sure you do the best you can in all of your classes and on the ACT or SAT tests. This could make a difference in terms of getting merit aid at some places.</p></li>
<li><p>Keep an open mind about college choices. Don’t think that you MUST go to the most expensive school on the planet to get a good college education.</p></li>
<li><p>Remember that your $140,000 family income is actually a very solvent one for a family. </p></li>
<li><p>At some point, you might want to discuss college choices and finances with your parents. At the end of the day, you will need to attend a college that works for them financially. </p></li>
<li><p>There are PLENTY of colleges that do not cost $40K per year.</p></li>
</ol>

3

<p>As things stand, you will not be eligible for much need-based aid. However you have lots of options.</p>

<p>First off, talk with your parents about how much they can afford to pay, how much they think you can pay yourself with money from your summer jobs and school year jobs, and whether or not they think it is OK to take out student loans. Chances are that there are a fair number of places that will fit your budget. You don’t have to pick the most expensive option! </p>

<p>If you do well in high school, and have good grades, you may be able to get some scholarship money from the college that you go to. Sometimes scholarships only depend on grades, sometimes there are other factors as well. You can learn more about this by talking with your guidance counselor, asking when you visit colleges, and reading about it at the college’s websites.</p>

<p>You are a smart kid to be thinking about this now. One good book you can pick up at the library for your parents to read is “How To Pay For College Without Going Broke”, another good one is “Debt-Free U”. You also can spend some time learning more about the financial aid process at [FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org)</p>

<p>Good luck with everything!</p>

4

<p>I’d like to suggest that your mom should re-think her decision not to apply for Social Security Disability payments. Although your family is high income, if she is truly qualified for SSDI the payments will be based on her earnings record, not on family income. In addition, there will probably be payments for each of her dependent minor children which could be banked for college. Since you have four or five years until you are 18 years old that could make a nice nest egg for your education.</p>

<p>Some people may feel that high income families should not draw on government resources such as Social Security, and in fact we felt that way ourselves. My husband was diagnosed with Parkinsons Disease in his late 30’s and continued to work for about another five years. He didn’t apply for benefits for several years after that because of pride, but when it became apparent that we could use the help paying college tuitions for our two kids, we did go ahead and apply. We had been living reasonably well on my salary, but the extra money has been very helpful.</p>

<p>I did not realize that in addition to his benefits the kids would also get money in their names. While legally we could use my daughter’s money in any way to help care for her, we decided to bank all of her money in a 529 education savings account. The money that we receive in her name does not get taxed since she does not have any other source of income. Some of my husband’s benefits are taxed l since I am working.</p>

<p>Although the process is complicated, and something like 70% of first applications are denied, it may be worthwhile to pursue. There are attorneys who specialize in filing the paperwork for you and their fees are capped by law. In our region the cap is $6000, and that can be paid out of the lump sum you get when your application gets approved. (The clock on benefits starts ticking when you first apply and it can take a year to be finalized. At that point if you are approved you get a lump sum to cover the application period.) Our attorney was really great in navigating the paperwork and getting all the right forms from my husband’s neurologist.</p>

<p>Best of luck – it can be pretty difficult for kids who have a disabled parent.</p>

5

<p>It really depends on assets and any extenuating circumstances (aka Social Security, as you mentioned), but realistically, you are probably not likely to get much aid. Actually, my family’s income is about equal to yours (~140k gross income, though both my stepmother and father work), and we just filed FAFSA today… with literally no savings and only our home to list under assets, we only qualified for a $5000 loan.</p>

<p>It’s really quite depressing to be in the (upper!)middle class when it comes to aid… many families I know end up making too much to qualify for aid, but not anywhere near enough to pay out of pocket at a school that’s not the local college/large state uni. I’d recommend seriously looking into colleges that offer good merit scholarships when you get to the stage where you’ve started to seriously consider colleges–many good colleges offer large scholarships, and by looking at what it’ll take to get them now, you’ve given yourself a leg up on the competition.</p>

6

<p>Sybelle, families (particularly wealthy families) are expected to have saved money for college over time, not pay for it all out of pocket. A family with a $140,000 income can easily put $5,000 or $10,000 away each year with no financial difficulty, much like saving for retirement.</p>

<p>Unfortunately, you don’t have any control over whether or not your parents were forward-thinking enough to do that. :(</p>

7

<p>My parents have saved about 10-20k so far, but lately, finances have been more tough than usual on my family. I don’t think they’ve been able to put any in savings for me or my younger brother in a while…</p>

<p>A large part of our difficulty can be attributed to my mum’s condition. Although we do have healthcare, we always have to pay in part for her many medicines, and as she has no success with any, these bills pile up. We’re still paying off 10k in DENTAL bills from a few years ago, and her problem area is somewhere else entirely.</p>

<p>5-10k (or 10-20, considering my little brother) would be waaaay too much for us. That’s sorta my point- we appear to have loads of money when in actuality we don’t. :(</p>

8

<p>laughingworld… not to be offensive, but yes, your family does have loads of money compared to the vast majority of American families - easily in the top 15% by income. There are choices your family can make in regards to the way you spend that most families have no ability to make.</p>

<p>At your current income level, you are not going to receive “need-based” aid anywhere except for the Ivies and a few comparable schools. If you need financial aid, you will need to look for schools that offer you merit scholarships.</p>

9

<p>Polarscribe, my family hasn’t had this income level for more than about three years–my stepmother worked as a waitress and my father at an auto parts store before that, and their gross income was ~60k, which doesn’t leave too much for saving. That said, my father did have a college savings fund for me, although it was a small one… unfortunately, during a custody battle a few years back which ended when I went to live with him, he used the entirety of those savings to pay legal fees and had to take out a mortgage on our home, which we’re still slowly paying back. Obviously that cuts into money that would have been used for college, too. Luckily, my stats are high enough that I’ve got a few schools offering me some nice scholarships.</p>

<p>Laughingworld, it’s good that your family has some savings, although as you say if it’s not feasible to continue saving that may make things difficult for you. Merit scholarships are probably going to be your best bet–that’s not a bad thing, as there are plenty of wonderful schools that offer great scholarships. It does mean that you’ll have to work for them in high school, though. I commend you for having such foresight for an eighth grader as to look into financial aid so early, especially since it’ll give you a clear goal to focus on (merit scholarships), but also would like to note that you still have several years before you need to seriously worry about the FAFSA, so don’t let it shadow your every move the next four years.</p>

10

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<p>Sybelle, your primary residence is NOT an asset that’s reportable for FAFSA. If you included that in your parent’s assets then you need to log in and amend your FAFSA. It may not bring your EFC down enough to qualify for more federal aid, but it may help you get work study, institutional aid, or subsidized loans.</p>

<p>Also, if you’re a freshman, the Stafford (Direct) loan should be $5500.</p>

11

<p>Sk8rmom: Ah, I wasn’t aware of that! Thank you for the information; my parents did not allow me to assist them in completing the FAFSA (I know our situation only because of conversations I’ve had with them) so I am not certain whether they reported our residence as an asset or not. I will certainly ask them and, if they did, inform them that it should not be classified as such. Talking with them is also how I know what we qualify for, so my stepmother was likely rounding with the amount she told me. $500 isn’t a huge difference, unfortunately, but every bit counts.</p>

12

<p>Polarscribe, my family hasn’t had this income level for more than about three years–my stepmother worked as a waitress and my father at an auto parts store before that, and their gross income was ~60k, which doesn’t leave too much for saving. That said, my father did have a college savings fund for me, although it was a small one… unfortunately, during a custody battle a few years back which ended when I went to live with him, he used the entirety of those savings to pay legal fees and had to take out a mortgage on our home, which we’re still slowly paying back. Obviously that cuts into money that would have been used for college, too. Luckily, my stats are high enough that I’ve got a few schools offering me some nice scholarships</p>

<p>=========</p>

<p>One thing that some lower-income people sometimes don’t understand is that having a higher income does not necessarily translate into having X more dollars to spend/save than the lower income family.</p>

<p>We see this all the time on CC. A person will think that a family earning $90k per year has $50k more to spend than the family who earns $40k. It’s just not true.</p>

<p>The higher income family is paying federal income taxes, while the low income family is not (or not likely paying much). </p>

<p>The low income family often receives gov’t subsidies …like free/reduced breakfast/lunch, medical care, housing subsidies, etc…which can add up to tens of thousands of dollars…meaning that these people aren’t really living on that low income.</p>

<p>Also, the higher income family likely earns that higher income because they are living in a high cost of living area. They would likely have a lesser income if they were living elsewhere. A $100k income in one city can be like a $60k income in another. So, it’s not as if the $100k family has $40k more per year to spend/save. </p>

<p>I have friends living on Long Island and even with an income in the $110k range, the family can’t save hardly anything for college after all the taxes (fed, state, local, property, FICA) that they have to pay in addition to their normal family living expenses and modest retirement savings. </p>

<p>The amount that they have to pay just for transporation into the city for the H’s job just blows me away. They own very old cars…always have…have never paid more than a few thou for any car. And, their car insurance…whew…much higher than what we pay for the same number of adults and college-aged male drivers. </p>

<p>Sybelle…you’re not alone in that your family has only recently been earning more money. This also often happens in families where the mom didn’t work or worked minimally while raising the kids. Then when the kids are in high school, mom may begin working full-time or getting a higher salary. So, the family’s income jumps from middle-class to upper-middle or higher, yet the family has not had the 18 years of high salaries to sock away college savings accts. </p>

<p>And, there are many families that have had bouts of unemployment during this recession, so any savings has been swallowed up by living expenses. …and some of these families were forced to accumulate some debt during this time.</p>

<p>It’s too easy to just think that every family with a good income should have lots of money saved for college (in addition to retirement savings, emergency savings, home/car maintenance savings, etc.) Yes, a family with a high income should be able to save $10k+ per year…but that doesn’t mean that most/all can go towards college costs. There’s too many other pricey expenses that families have to deal with. It’s just not that simple…especially in families that have more than ONE child.</p>

13

<p>Laughingworld,</p>

<p>First, good for you, for addressing finances and planning ahead.</p>

<p>Second, there is a lot of material on the internet and most likely at your local library in terms of books written by financial planners, etc. I would advise you to start reading. We have read at least ten books on financial aid addressing how need is determined, how to plan for the expenses, etc. One idea is to do a search on Amazon and then get those books from your library or MELCAT, or whatever, for free. Always verify what you read before you rely on it. You should be seeing the same message multiple times. </p>

<p>There are some decent websites too but sometimes they are outdated and folks can post a lot of bad information. </p>

<p>Third, and this is the most difficult area, it would be best if you understand the true situation with your parent’s finances and how it will impact you. We have always made our finances an open book with our kids, only to be discussed within the immediate family. It made the kids very mature and frugal regarding spending money.</p>

<p>Sidenote — I worked my way through a fulltime four year degree. Worked fulltime my last two years of high school, started my own housekeeping business in high school. I just kept plugging along. Granted, relatively speaking, college was not as expensive back then. I feel that it is much more difficult now to do what I did then.But you have to try. Watch the loans though. Kids take out loans and blow the money.</p>

<p>Fourth, get thyself to local colleges and community colleges and ask about financial aid forums. Start early. Even one of the most pretigious public colleges in the country that happens to be in our state put on a financial aid seminar in our backyard. </p>

<p>Good luck.</p>

14

<p>Anyone with an unaffordable EFC needs to consider the following:</p>

<p>1) Find out how much the family will contribute each year.</p>

<p>2) Get as high of an ACT or SAT as you can (take both TESTS!!! and practice!!)</p>

<p>3) Protect your GPA…get the best GPA you can. Sometimes it’s better to take a slightly easier courseload and get the better GPA since some merit scholarships also have a highish GPA req’t. </p>

<p>4) Do NOT count on senior year grades to bring up your GPA. Decisions on merit are often made too early for those grades to count. And, some schools only count grades 9-11 for merit. Besides, in the best of situations, only the first semester senior grades might count and that’s not usually enough to bump a cum GPA of 3 prior years.</p>

<p>5) Work over the summer and save your earnings for college costs. Work part-time during the school year for your day-to-day expenses. </p>

<p>6) Do not consider large loans as some kind of “fall back” plan. They are a bad idea and require co-signers (and most parents won’t co-sign.)</p>

<p>7) If your family can’t contribute much, then small merit scholarships are not going to pay for college. When families can’t pay much, then you typically need at least a full tuition scholarship if you’re planning to live away from home.</p>

<p>8) Going away to school is a luxury. If money is too tight, and you don’t have the stats for large enough merit scholarships, then commuting to a CC or local state school may be your only option. Many “good students” find themselves in this predicament. A 3.5 GPA student with a 26 ACT may find few options for very large merit that leaves the family with little to pay.</p>

<p>9) Don’t expect private scholarships to pay for college. There are very, very few huge private scholarships that will pay for 4 years of school. Most private scholarships are for small amounts and only for freshman year…so the funds won’t be there to help you pay for soph, jr, and sr years.</p>

15

<p>mom2collegekids, your insinuation that “you’re lower-income, so you don’t know what you’re talking about” is both factually wrong and offensive.</p>

<p>My family was low-income for years… now my mother makes six figures in the Bay Area. I have lived both ways, working class and upper-middle-class. We have a hell of a lot more disposable income at $105,000 per year than we did at $35,000 per year.</p>

<p>I stand by my statement: any family making $140,000 has the capacity to put $5 or $10,000 in the bank every year, if not more. If they can’t, that’s a life choice they made. I’m not saying that it’s a wrong life choice, but it is a choice.</p>

16

<p>I’m not saying that a two parent plus kids family earning $140k per year can’t save $5k-10k per year. However, to be able to save for retirement AND for emergencies AND for home/car issues AND save $5k per year for each child’s college costs is not likely in many regions of the country. </p>

<p>College for ONE child is not all people have to save for…and again, most people with that income didn’t earn that much the whole time they were raising kids. </p>

<p>And…that was not my insinuation…and my statement about how some low income people think does not necessarily mean YOU. You aren’t the designated representative of “some low income people”…or did I miss that memo? :rolleyes:</p>

17

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<p>Sorry, mom2, but I don’t think you’re current on the qualifications for government funded programs…or perhaps they’re somehow more generous in Alabama! A family of 4 making $40K would not qualify for Medicaid, HUD, food stamps, etc. They would probably qualify for reduced school lunch…definitely not worth thousands or tens of thousands a year. The federal poverty level for that family of 4 is $23,050.</p>

18

<p>^^^</p>

<p>I wasn’t saying that a family of $40k would get all those benefits…you’re mixing paragraphs. When I was talking about a family earning $40k, I was saying that family that earns $90k doesn’t have $50k more income to spend…because the $90k incomefamily would be paying federal income taxes, while the family that earns $40k will be paying little or no federal income taxes.</p>

<p>*We see this all the time on CC. A person will think that a family earning $90k per year has $50k more to spend than the family who earns $40k. It’s just not true.
*</p>

<p>In a later paragraph I mention that low income families often receive gov’t subsidies…but I’m not referring to any particular income at that point. I should have been more clear…sorry for the confusion.</p>