<p>Some of the 100%-need schools cap your home equity contribution. I'm a broken record (sorry to oldtimers who have heard me say this everytime this discussion comes up again)...but we have found our EFC to be reasonable, and pay it out of current income. We are fairly frugal, and all my income goes to college. We live off of husband's income. We are 4 years though our 7-year journey, and still financially solvent with no debt besides mortgage. So don't abandon hope yet! There are some substantial savings from not having kids at home - you save on food, hot water, extracurricular stuff, basic doctor visits, etc. Your kid can earn money through the summer, and cover all personal expenses using workstudy or other campus job. Although it's not easy, it can be possible to afford the private U's without taking on debt.</p>
<p>While I understand the struggle that middle class (or upper middle class, I'd suppose) families face in obtaining financial aid, as a member of the "truly struggling" class, I wish people would not make comments that suggest that we have it easier because schools are throwing money at us. All the financial aid in the world won't get my family health insurance (though of course I'm thankful for how generous my school has been to me).</p>
<p>IFAP</a> - EFC Formula Information</p>
<p>here is a link to the FAFSA EFC
Check it out, see of you can make any adjustments before filing to maximize aid</p>
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<blockquote> <p>What if you live in the U.S. and have significant equity in your home but lenders do not offer home equity products where you live?>></p> </blockquote>
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<p>Is there really a place in the U.S. where you are unable to get a home equity loan? Gee...you can apply for them online. I get stuff in the mail all the time from places far away from where I live. Still...if you can't get a home equity loan, you could (as pointed out above) use a PLUS loan. </p>
<p>Re: retirement. I'm not far from it. But I figure that when I stop paying private college tuition, I can (for one year) pay the same amount to the Stafford Loan folks, and my kids' loans will be paid off. One more year, and my home equity loan will be paid off. Yep..that's how much we are sending these colleges per month. When my kids graduate, I will feel like I won the lottery.</p>
<p>What if you live in the U.S. and have significant equity in your home but lenders do not offer home equity products where you live?
Banks in your area do not offer mortgages?
We refinanced our house, took cash out to access our equity, that the only way I know of to tap equity if you don't want to sell right now.</p>
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<blockquote> <p>We refinanced our house, took cash out to access our equity, that the only way I know of to tap equity if you don't want to sell right now.>></p> </blockquote>
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<p>Actually where we live, you can take out a home equity loan or a home equity line of credit IF you have equity in your home. With a home equity loan, you would receive the cash, and begin repayment immediately. With a home equity line of credit, you get a line of credit up to a certain amount (doesn't exceed your actual equity) and you are issued checks to use if you need to tap into the account. You have the option of paying interest only or paying part of the principal as well. If you don't use the HELOC, you don't pay anything. In the end, it ends up being like a second mortgage. But for some folks, it's easier to do this than to completely refinance your home.</p>
<p>For the federal method, try fafsa4caster.org. Wherever it asks for 2006 info, put in 2007 instead. Good luck!</p>
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[quote]
3. Future earnings - retire soon"
Maybe that needs to be re-thought. My future plans certainly changed. When I am finally able to retire, my standard of living will also take a serious slide.
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<p>I agree with edad on this one. In addition, if you are maxing out your 401k (403b, etc.) with pre-tax/after tax or a combnation of both, while the money in the retirement account in not counted in FA, but the monies that you contributeto your retirement account is considered income, some of which in the college's eyes can (and should be) redirected to pay for your child's education.</p>
<p>If you "retirement account" is sitting a money market, mutual fund, stocks, bonds, they are also considered assets in the eyes of FA which "can" be used toward paying tuition.</p>
<p>I'm not sure what has changed since the "Let the game begin" thread of August. </p>
<p>Considering the commentaries about looking for merit aid and ways to reduce the EFC, I commented that you needed to KNOW you EFC ... not look for online calculators that are NOT providing you the tools to truly analyze your finances. </p>
<p>Knowing your EFC means to work with the ORIGINAL formulas (posted by somemom.) Years ago, based on those OFFICIAL formulas, I was able to build a spreadsheet that covered all variables and predicted the EFC to the penny. Finding how the formulas worked was also a great tool to understand the whole FAFSA/EFC "secret." Not much of a secret! </p>
<p>All it took was a little bit of dedication. In my book, that beats all the speculation and brain damage from running in circle.</p>
<p>Im never going to retire- in fact I am going back to school for something I can do till I drop dead! :)</p>
<p>( of course after I sit in one place studying for too long I can't move but.....)</p>
<p>EK, I don't plan to retire, either -- my dad is in his 80's and still working! -- but I do figure that I might need to slow down as I get older, so overall earning capacity when I'm 70 might be a lot less. So retire or not, it will be nice to accumulate as much as possible as a nest egg.</p>
<p>"Is there really a place in the U.S. where you are unable to get a home equity loan?"</p>
<p>Yes. I'm a U.S. citizen and live in a U.S. territory and equity loans/lines are not available here. I can't vote for U.S. President either! :D</p>
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I can't vote for U.S. President either!
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Then you are definitely not to blame for the current mess. ;)</p>
<p>"2. Current income - middle income"</p>
<p>It's been said before, but the median in this country is a gross household income in the neighborhood of $45k/year. Given the fact that calculators are giving you a $40k EFC, then unless your math is off or you have substantial investments, I'm guessing that your gross income is well above $80k and maybe pushing the $100k mark. $88k/year would put you at the 80th percentile of American families. It's perfectly reasonable for you to find your EFC outrageous, but if my guesses are accurate, then your definition of "middle income" is very broad.</p>
<p>Dad II, I wouldn't postpone talking with your daughter while you investigate all the different calculators or figure out how to plug numbers into the original formulas, as xiggi suggests. The sooner she starts realizing some compromises may be necessary, the better.</p>
<p>Remind her that you love her, are proud of her, admire her for her accomplishments so far and have no doubt that someone with her outstanding talents will <em>stand out</em> at any school on her list.</p>
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<p>emeraldkity4, you are a stand out, also. Best of luck with your studies.</p>
<p>Does the FAFSA take into account cost of living in X area? i.e. A $50,000 salary in Manhattan could get you the same standard of living as a $20-30,000 salary elsewhere.</p>
<p>I had a clue what a 529 account was, but the NY state version had lost money five years in a row. It didn't seem like a very wise investment. Somehow we never seemed to have any money left over at the end of the year anyway. We live pretty modestly except for too many computers. No cable, slightly below average house for our county (which sadly has one of the highest housing costs in the US), kitchen still dates to 1980s. Architects never retire, and neither do scientists. I actually have no real interest in retiring though slowing down sounds good. Our EFC is ridiculous, thank goodness we inherited a bundle just before college expenses kicked in.</p>
<p>schase, the FAFSA takes into account state tax rates -- so it will anticipate state income taxes in calculating net income in those states that have them -- but not regional cost of living. </p>
<p>mathmom -- I might be wrong, but I think it is possible to save money in a regular bank account or other form of investment and then transfer the full amount to a 529-- so I think a family could have a $100K nest egg and simply move it into a 529 when the kid reaches 11th grade - so it wouldn't have to be declared as an asset the following year. </p>
<p>I also did not seem to have any money left over for savings, but I do know families from very modest means who very regularly and diligently put away sums like $200/month into their kid's college accounts. Maybe the couldn't have cable tv or gave up on a vacations each year -- but they made it work. </p>
<p>I'm not trying to criticize anyone for making the same mistakes I did -- but at the same time with all this griping, I have to acknowledge that I bear some responsibility for my current need to borrow. Now it may be that from a purely economic standpoint, paying off a $48K loan at $600/month using 2007 dollars might actually be a better choice than accumulated the same amount of money at $300/month in 1990's dollars -- I do seem to remember a time when my US dollar was worth a lot more than a Canadian dollar -- and maybe the really smart thing for me to do would have been to invest all my money in Euros. </p>
<p>I'm just saying that ultimately the situation we face with the EFC is influenced by the choices we made early on -- which is why I am paying and borrowing without too much griping. (The only part that really irks me is this noncustodial parent thing when applied to a parent who is generally uncooperative and does not contribute -- I'm willing to cope with the money part as tough as it is, but I can't stand the aggravation of having to deal with him year after year for the paperwork).</p>
<p>dntw8up,
Be sure you document in the Comments section on the FAFSA (and especially) PROFILE that you are in a US territory that doesn't allow home equity loans. Being anal-retentitve, I would include it in each school's FA app, too. I wouldn't expect that many FA admins will run across that scenario -- so if you can document (and even better, with the applicable regulation, if you can find it), that may help you come April.</p>
<p>I agree, though we are one of the few families I know who don't have cable. :) The only smart thing we did investment-wise was buy our current house when we did. We've got a lot more in home equity than our old one would have. And much better return than the stocks I sold to make the down payment. The real killer is the cost of living in this area, but the relatively short commute for dh keeps him sane and around and I really wouldn't want to live in a more suburban area than I do.</p>