Five Big Financial Aid Lies: one page article

[Janice H]

http://www.usnews.com/education/blogs/college-cash-101/2010/04/06/5-big-financial-aid-lies?s_cid=related-links:TOP

 

 

I too have wondered about number of merit scholars who manage to keep the scholarship all four years. (The fifth "lie" in the article. Or, maybe it's more of a don't ask-don't tell data point.)

[April in CA]

Hi Janice, as the mother of a merit scholarship recipient, I am interested in that data as well! My son's tuition is covered for 4 years as long as he keeps his GPA at 3.4 or better. As an engineering student, this is going to be tough. His goal is to maintain a 4.0 during his freshman year to give himself a buffer for the really hard classes coming next year. So far, so good! I sometimes remind him that he is being paid a substantial chunk of money each semester to achieve and earn good grades. There is no way he could afford his education if he blows the scholarship. I must admit that it seems a bit harsh that engineering majors have to maintain that same GPA that all others do (I was a business major - I know that my classes were not as hard as my dh's engineering classes!). Ds will just have to rise to the challenge. Thanks for the article!

Blessings,

April

[creekland]

That was a good article. So far, oldest has done well at keeping his merit aid, but I sure know kids from school who have not. Sometimes it's due to their not being prepared academically and sometimes it's due to their wanting to major or minor in "party."

 

It's important to have frank talks with our future college students. I show mine examples when we have them (not necessarily by name, but sometimes they know the names anyway).

[Photo Ninja]

My ds has been able to keep his merit scholarship so far and is nearing the end of his sophomore year. He only needs to keep a 3.2 GPA to maintain his scholarship, and he is more than meeting that requirement. I am confident he will be able to keep the scholarship all four years.

 

My dd will go away to school next fall and will need to keep a 3.5 GPA to keep her full tuition merit scholarship. That will be a lot of work. I know she is capable, but she will have a lot of science courses and the courses in her major are difficult, so it won't be easy to keep her GPA above the minimum. She is highly motivated, though, because the university told her that she needs to have at least a 3.8 GPA in order to be considered for grad school, which she needs. I have encouraged her that she needs to consider school her job because maintaining the scholarship is worth more than she could make in a part time job. I hope she won't be working. That might not be realistic, but that is the hope. She needs to keep the scholarship.

[Halftime Hope]

ds1's college awarded him this lovely merit scholarship, but we cheered when he did not make the SAT cut-off score for the highest scholarship level, b/c the GPA he would have had to keep was untenable for an engineering student.

 

Furthermore, all the merit scholarships (and this is expressly spelled out on the FA website for his college, so not a surprise) start out with one GPA requirement for the freshman and sophomore years, and then the GPA requirement actually goes UP by 0.25 for the junior and senior years. Can you imagine? That nearly guarantees that a student will lose their $ for the last two years if they have not had a high GPA to begin with. I doubt that many kids understand GPAs and cumulative scores well enough to understand what is going to happen--the few that I have talked to about it went eyes-round-as-saucers when I explained, as did several of their parents. The final things is that if a student's GPA dips below the requirement, the $ is gone, in its entirety, forever--no probationary period, no dropping back to the next lower scholarship level, nothing.

 

Dd has to keep a very high GPA for her merit scholarship, but hers is much more forgiving, with those safeties I mentioned built in. She, however, is taking no chances--so far she has straight As and is working on building herself some cushion for the harder classses to come. (Atta girl!)

[Gwen in VA]

Do check with the college on how they handle merit aid. I know of one college where a student took sophomore year off. She came back with her merit aid intact. Then she dropped out spring semester of the next year and she STILL was able to come back with her merit aid intact.

 

Also, is the GPA required cumulative or semester-by-semester? Do the students have one semester of grace before the merit aid is withdrawn?

 

Some schools are much more forgiving than others.

[Janice in NJ]

Do you know what surprised me?

 

Here's the Scenario: Private School. Ds received their highest "advertised" merit scholarship. For some dumb reason I thought that would reduce our EFC. Nope.

 

They did the math this way:

 

Full Cost (Tuition, Fees, Room, Board, Books) - Merit Scholarship - Maximum Federal Loans to Student = Amount Left for Parents to Pay.

 

And yes, this is just about our EFC.

 

So what's the Merit Scholarship for? :glare:

(Rhetorical question. I get it now. I just didn't get it before. ;))

This happened multiple times, so it's not a fluke. The merit scholarship didn't reduce the EFC. It just reduced the amount of "institutional aid."

And the student's loans didn't reduce the EFC either.

All information that I would have preferred to have earlier rather than later.

 

The OTHER thing I wasn't aware of that would have helped:

Most colleges have information about student debt at graduation. They list "Average Student Debt." Duh to me - it took me a while to understand that this is student debt. Just what it says.

 

That does NOT include the amount of debt/bills the parent had to pay. Simple right? Not to me. I'm a dolt. Missed that. (For some reason - on the flip side, I failed to miss all of the banter about how privates really can be affordable. etc, etc, etc. I HEARD that. Even though I must have missed the details. In our case private school still isn't going to be affordable. You hear what you want to hear! Really pricey private schools are about the same as just pricey private schools. That was true. But out of reach is still out of reach. :lol:)

 

Anyway - back to the total average debt issue: I've always heard/listened to this debate about "Who is going to pay for college? The child or the parents?" Mute point. I don't know WHY I thought there was something to even think about here. The parent is still responsible - no matter what the "parents" decide. (Even if their role is masked.) The system is set up to solidly keep the parent's checkbook in the loop. Yes, of course - it is still a free country. We are free to give this child the boot and tell him, "No way are you going to get an ounce of help from us. You're 18. You're on your own." We could do that. But the system is not set up to provide him with a lot of on-your-own alternatives. Even if he wanted to go to CC, he would need our help. The cost is way less, but so are his options. He couldn't even do that on his own. He's eligible to borrow Federal money for the expensive public or state schools but not for CC. So what is he supposed to do. We're stuck playing a role unless we decide there isn't going to be a play! :001_smile:

 

Back to borrowing for a private or state school - no one will LOAN the child the kind of money they need to make this work. The child's loan is a pittance compared to what the parent is expected to pay/borrow. (Yes I know we were supposed to be saving for college. We didn't. So it would be a loan.) For all but one of the "packages" we received we were expected to borrow 5 - 6x what our son was expected to borrow. No where on any of the college sites have I found information about the average "parents" bill/debt for the college degree. Now I know why. Crumbs that are stealthily pushed under the rug. :001_smile:

 

Have you ever had the feeling that most of the real issues are being brushed under the rug/table? Well, we're under here. (It's nearly April and I'm trying to wade through this with my oldest. So forgive me. Naive. Newbie here. BUT I've figured it out. THANKS to you folks on the board, it hasn't been a shock. Just an "Oh well. That's what I thought!") Anyway - here under the table, there are a LOT of crumbs/dust bunnies. And I've started to look at them and wonder why we don't just push them out from under the table and actually take a look at them. It's not like ignorance has been bliss. I think the wondering "What if?" has been harder than understanding. I actually feel better now that I understand! Why is that so hard? Who is pushing SO hard to mask this system? This is NOT a used car. I'm talking about a person's future! Why can't this be a rational process? Why all the smoke and mirrors?

 

Anyway - the average debt. Kids paying v. their parents. I've asked around about this. From the folks I've spoken to - the kids with big, big loans got them because they went to private lenders and signed on the dotted line. And yes, the parents had to co-sign. Which really puts the burden back on the parent. If junior decides to goof off, it's mom and dad who are going to be in trouble not the "child." At what point do I get to shrug my shoulders and say, "S*cks to be you!"???? ;)

 

Honestly? I've found this whole process to be clouded in WAY too much mystery. I wonder if this system is so screwed up because NO ONE is talking. None of us want to talk about how this works because we all feel like we're getting worked. :001_smile: Emperor's new clothes and all that. Hey, wait a MINUTE! :001_smile:

 

Anyway - I feel like the system is set up to KEEP the parents in the loop because we're the only ones who can afford to keep the price ceiling where it is. The kids certainly couldn't do it on their own! And as long as we're in the loop, the kids aren't going to become adults. Not really.

 

We're cool here. Looks like in-state public is going to be a fantastic choice in the end for ds. So we're not sad or anything. Just wished we could have avoided all this angst and RUN-AROUND!!!!!! from the get-go!

 

Peace,

Janice

 

Enjoy your little people

Enjoy your journey

 

P.S. Just to bring this into perspective. If we decided to agree with these schools about our role and decided to borrow the EFC, we would be paying over $1300 per month for ten years just to cover four years of college for the first child. We have three children. Huh? (And no, you don't start out with that payment. Ramps and all. But in the end, that's what the total debt would look like if you took the total borrowed and made payments for ten years on that total cost of education. And yes, that's the parent's loan. The child is paying on their loan. ya-da, ya-da, ya-da. Almost as confusing as the tax code. Yes?)

Edited March 25, 2011 by Janice in NJ

[HeidiD]

P.S. Just to bring this into perspective. If we decided to agree with these schools about our role and decided to borrow the EFC, we would be paying over $1300 per month for ten years just to cover four years of college for the first child. We have three children. Huh?

 

Insane! We have 7 kids - no way we could afford that unless I stopped homeschooling the younger ones (a couple of whom have LD's and thus would not fare as well in a regular school environment) and went back to work.

 

My eldest chose the school which offered him so much merit aid that it was hard to turn down. Maybe penny-wise, pound foolish, though. Keeping a high enough cumulative average to hang on to the money so he can stay there is like having the Sword of Damocles hanging over his head - very stressful, and leaves him no time to do anything except eat, sleep and study.

 

So his younger brother is planning to go to the state university. He's been accepted to the honors program with a full merit scholarship, but since he's also going for math/engineering, there's no guarantee he'll be able to keep a high enough cum to keep the money - but at least if he loses it, he can still come up with the $$ to graduate!!!

 

 

 

The child is paying on their loan. ya-da, ya-da, ya-da. Almost as confusing as the tax code. Yes?)

 

The Parents Plus loans - that whole gimmick really blew me away. My siblings and I all put ourselves through private schools with money we earned by working, student loan, and scholarships. I always assumed my kids would be able to follow the same path. Ha! The current price structure makes that approach impossible for most kids, and the costs have gradually become prohibitive - not just for families with many children, but even families with just one or two. I know people who have taken out Parents Plus loans who have neither the assets nor income potential to pay them off. I wonder how many people will default on these loans as the economy continues to tank. It seems that in the long term, the cost structure is untenable.

[LinRTX]

Well my son had enough merit scholarship cobbled together to pay for his four years of college. He was guaranteed renewal every year for a certain amount if he maintained his GPA. He was an EE major and did maintain the GPA. But the college costs go up each year, so what paid for classes and books his first year did not even cover all his classes the last year.

 

Linda

[Azalea]

Do you know what surprised me?

 

Here's the Scenario: Private School. Ds received their highest "advertised" merit scholarship. For some dumb reason I thought that would reduce our EFC. Nope.

 

They did the math this way:

 

Full Cost (Tuition, Fees, Room, Board, Books) - Merit Scholarship - Maximum Federal Loans to Student = Amount Left for Parents to Pay.

 

And yes, this is just about our EFC.

 

 

And thank you especially Janice in NJ. College financing is a mystery and you have helped lift the veil of secrecy for me. Azalea

[Janice in NJ]

Yes. I was very surprised to discover that those Parent Plus loans have a 4% upfront fee. Seems weird to me. I've never had to pay a fee to borrow money. The only thing I can think of is points on a mortgage but that's usually maybe 1% and then that lowers the interest rate. The PP Loan is just an upfront fee. Now I see why so many folks take out home equity loans. But that seems like a bad idea too. Rocks and VERY hard places!

 

Peace,

Janice

[HeidiD]

Well my son had enough merit scholarship cobbled together to pay for his four years of college. He was guaranteed renewal every year for a certain amount if he maintained his GPA. He was an EE major and did maintain the GPA. But the college costs go up each year, so what paid for classes and books his first year did not even cover all his classes the last year.

 

Linda

 

Yes, that's our experience as well. The tuition alone has risen $6 K over the past 3 years. So the value of the scholarship erodes...

 

And scholarship $$ go to a relatively small number of applicants, so it's getting harder and harder to come by, even for kids with good records. Costs vs. benefits of plunking down $200 K for a 4-year degree are out of sync.

[Janice in NJ]

Hi Azalea,

 

Hopefully some other folks will chime in with info. The more specific the better, eh? The hardest part of this whole thing for me was getting concrete info; most of it is shrouded in generalizations.

 

It was REMARKABLE for me to read in an article that was linked to the article above that EFC is calculated based on cost of living in 1967 (slightly adjusted for inflation). INFLATION does not reflect the increase in cost where I live. We are ten miles outside of NYC. And no, the data is not regional adjusted either.

 

So no, FAFSA. If you take the amount of money my parents needed to live in 1967 in the middle of NO WHERE and adjust it for inflation, it does NOT reflect the amount of money a family of five needs to live (even MODESTLY) ten miles outside of NYC in 2011. Your numbers didn't even reflect the cost of living here in 1967. And the numbers have gone up dramatically since then. And we're talking percentages here.

 

But yes, that was very close to our EFC for private school or out-of-state publics (Yes! Ds was accepted to SUNY Binghamton - rated the top public in the NE. (I did my homework) Engineering School. But it still cost too much money because we aren't in NY state! Dh WORKS in NY state. We pay NY state income tax. We own a cabin in NY state so I pay county and school taxes. But no, we don't VOTE in NY state so we have to pay the higher tuition. We're officially out-of-state.). Anyway - the EFC is actually pretty accurate on what we'll be asked to pay; it's just wildly hilarious as far as what we can afford to pay.

 

Peace,

Janice

Edited March 25, 2011 by Janice in NJ

[Janice in NJ]

Good to know. I hadn't thought about that. But of course the cost is going to go up. Even if the student manages to hang on to the scholarship - that's fixed- so we are going to be looking at more money out-of-pocket each year.

 

Got it. Thanks!

Janice

[distancia]

My son's tuition is covered for 4 years as long as he keeps his GPA at 3.4 or better. As an engineering student, this is going to be tough. His goal is to maintain a 4.0 during his freshman year to give himself a buffer for the really hard classes coming next year. April

 

Others I know n similar situations take an easy A class every chance they get...if it comes down to Art History or Pop Culture Film for a humanities credit, they will opt for the Pop Culture Film every time. You gotta do what you gotta do.

 

We are in the same situation with our dd re: full merit scholarships for high SAT scores and a high GPA (she is a DE student so her GPA is quite high) to some nice private schools, but the total cost--our (parental) EFC was still waaay more than what the state public Us, plus state merit scholarships, will end up costing us.

 

BTW we live in a very affluent community and a majority of the well-to-do parents--even those with million dollar waterfront homes and excellent jobs--are sending their children to public Us. The small minority of students we know who do attend private Us tend to have their costs subsidized by grandparents or an inheritance, that kind of thing. I know of only one who took out a second mortgage on her home, but it was for a small amount (travel expenses, incidentals) as her dd was a National Merit Scholar and had a full ride.

Edited March 25, 2011 by distancia

[Janice H]

Perhaps the PLUS loan fee has been lowered. This was in my inbox from one school "The Parent PLUS loan has a fixed interest rate of 7.9% with an origination fee of 2.5% on the total amount of the loan. Note: this is considered an unsubsidized loan, so interest will accrue from the date of disbursement."

 

All the posts on this thread are so illuminating and sobering. I've read it through 3 times so far.

 

One positive aspect of dd's merit aid, assuming it is maintained, is that when (please don't think "if" but the economy is, so far, uncooperative) I go back to work full time, the college bill is still the same. Tuition and board won't increase for us because of greater income.

[April in CA]

Others I know n similar situations take an easy A class every chance they get...if it comes down to Art History or Pop Culture Film for a humanities credit, they will opt for the Pop Culture Film every time. You gotta do what you gotta do.

 

We are in the same situation with our dd re: full merit scholarships for high SAT scores and a high GPA (she is a DE student so her GPA is quite high) to some nice private schools, but the total cost--our (parental) EFC was still waaay more than what the state public Us, plus state merit scholarships, will end up costing us.

 

BTW we live in a very affluent community and a majority of the well-to-do parents--even those with million dollar waterfront homes and excellent jobs--are sending their children to public Us. The small minority of students we know who do attend private Us tend to have their costs subsidized by grandparents or an inheritance, that kind of thing. I know of only one who took out a second mortgage on her home, but it was for a small amount (travel expenses, incidentals) as her dd was a National Merit Scholar and had a full ride.

 

Hi Distancia! I see you are in Florida - do the State Uni's offer merit aid there? In our experience here in CA, the CA public schools offer very little in merit aid. And given our state's financial woes, what little ther is might be gone b the time my younger son graduates high school next year. Older ds was offered a $5K scholarship from the honors program at UC Riverside. He could have applied for a substantial scholarship at Fresno State, but Fresno was not high enough on his list to make it worth applying.

 

Our FAFSA EFC was laughable - who knew we had that much money just laying around? I was stunned to find out that we would be expected to pay close to $30K a year! So, financial aid would NOT be forthcoming form our state schools. Given ds's scholarship, as long as he keeps it, it is cheaper by far for us to send him to an out of state private school in TX than it would be to send him to a public school here in CA.

 

I am very concerned about the cost of higher education in our country. My sons are blessed to be able to test very well (and to have the smarts to back it up!), but not all of their friends are similarly blessed, even though they are just as smart. Funding college is very, very stressful for them. A little less obfuscation by all concerned would be a good thing. Thanks to all here as we attempt to educate each other!

Blessings,

April

[creekland]

Just to be clear to anyone who isn't aware, if a student is offered Federally Subsidized anything (loans, work study, grants) the total offered aid can't go down into the family EFC unless you have a filed appeal of special needs of some sort (significant medical expenses, a few others I can't remember).

 

The Federal Gov't controls FAFSA and if they say a family can pay X, they will not subsidize amounts to reduce X. If the total amount of scholarships gained or merit aid received reduces X, then there can be no federally subsidized anything.

 

Colleges or private organizations can offer more $$ (free ride, full tuition, etc). That can and sometimes does happen for students they want to attract. Those students just can't have federal anything as part of their package IF what they gain means X would be a lower amount.

 

When oldest won an outside scholarship it (and the college package) dropped down into our EFC a little bit. The college had to respond by changing its offered package. I'm happier with a little less loans. ;)

 

I agree that in many cases the EFC is HIGH, so it's helpful to know what it is. If you know it's more than you can pay, start looking for schools known for MERIT aid (if your student qualifies) as need-based aid will not lower that EFC.

 

To have the best chance for merit aid, look at schools where your student is easily in the top 25% of stats for incoming freshmen and look for schools farther away from home (geographical diversity often provides more $$). Then be sure the school offers merit aid - not all do. Be prepared to be competitive. Most top scholarships are competitive. Other options can be sports related or some special "hook" otherwise.

 

It can really pay to put more time/effort into the PSAT/SAT and/or ACT, but for most, you also need to be an attractive student with extra curriculars and GPA as well.

[Kareni]

There are a couple of ways one might exclude parents' income from being considered for financial aid.

 

Have your child hold off on college until he or she is 24 or older. At that age, a student is considered independent and only his/her income and assets are considered for the FAFSA.

 

And a second method which I suggested a few years ago:

 

"If you're child is married, then he or she is also considered independent. (Perhaps he or she could marry the child of another poster here .... Well-Trained Matchmaking anyone?)"

 

I'll admit to liking the suggestions that Kathy in MD posted back in 2008.

 

Regards,

Kareni

[HeidiD]

"If you're child is married, then he or she is also considered independent. (Perhaps he or she could marry the child of another poster here .... Well-Trained Matchmaking anyone?)"

 

Ah, but then they'd have to move back in with you in order to swing the expenses. The WTM mothers-in-law might get into an argument over who gets to host (or escape) the happy couple, causing bad feelings to erupt on the board. :)

 

I'll admit to liking the suggestions that Kathy in MD posted back in 2008.

 

:lol: Of course the nursing home might gobble up your rich, elderly husband's assets before you can get them, leaving you with free tuition but nothing else to show for it. :)

[creekland]

There are a couple of ways one might exclude parents' income from being considered for financial aid.

 

Have your child hold off on college until he or she is 24 or older. At that age, a student is considered independent and only his/her income and assets are considered for the FAFSA.

 

And a second method which I suggested a few years ago:

 

"If you're child is married, then he or she is also considered independent. (Perhaps he or she could marry the child of another poster here .... Well-Trained Matchmaking anyone?)"

 

I'll admit to liking the suggestions that Kathy in MD posted back in 2008.

 

Regards,

Kareni

 

Kathy's post was really cute! Thanks for sharing it!

 

If we resort to matchmaking, I'm holding out for high $$ for middle son. Not only is he talented at pretty much anything (moderate value), he's naturally clean (high $$) and agreeable with pretty much anything (super high $$).

 

The other two might have to be on the bargain rack if anyone were to look inside their room. They'll definitely need a significant other willing to put up with a bit. ;)

[Kareni]

Ah, but then they'd have to move back in with you in order to swing the expenses. The WTM mothers-in-law might get into an argument over who gets to host (or escape) the happy couple, causing bad feelings to erupt on the board. :)

 

 

Hmm, a very good point that I hadn't considered, Heidi. As regards the escape option, there's always summer school!

 

Regards,

Kareni

[Kareni]

If we resort to matchmaking, I'm holding out for high $$ for middle son. Not only is he talented at pretty much anything (moderate value), he's naturally clean (high $$) and agreeable with pretty much anything (super high $$).

 

The other two might have to be on the bargain rack if anyone were to look inside their room. They'll definitely need a significant other willing to put up with a bit. ;)

 

Perhaps the dollars you amass from the middle son can be used as a dowry for the other two!

 

Surprisingly, my daughter seems to have become much neater since going to college. There is hope!

 

Regards,

Kareni

[Janice in NJ]

Yup. Good thinking, Janice. See - hadn't thought of that either. I could start working and it wouldn't change FA. I should DO that. Would anyone like to hire me to get your kid into college? :001_smile:

 

Peace,

Janice

[distancia]

Hi Distancia! I see you are in Florida - do the State Uni's offer merit aid there? In our experience here in CA, the CA public schools offer very little in merit aid.

 

I am very concerned about the cost of higher education in our country. My sons are blessed to be able to test very well (and to have the smarts to back it up!), but not all of their friends are similarly blessed, even though they are just as smart. Funding college is very, very stressful for them. A little less obfuscation by all concerned would be a good thing. Thanks to all here as we attempt to educate each other! Blessings, April

 

Here in Florida ALL student (residents) are eligible for merit scholarships if they fulfill certain undemanding criteria. It is called the Florida Bright Futures scholarship and it pays for 75% of tuition IF a high school student has a 3.0 GPA or higher and an SAT score of somewhere around 1000. There is another scholarship for 100% tuition if a high school student has an SAT score over 1920 and a GPA over 3.7 (which dd has). In addition, all state schools offer some kind of Honors merit scholarship, which varies from school to school, but basically averages an additional $3000- per year on top of the fully-paid tuition. To qualify for that additional $3K a student has to have an SAT score from anywhere of 1860 up to 2000+, depending on the particular state U.

 

All in all, my daughter is receiving 100% paid tuition AND an annual $3000 merit scholarship at a top state U. Had she chosen a less selective state college she would have received more from the school. What that leaves us to pay is the remainder of her costs--about $8000 a year for some housing, meals, and books. Housing here in Florida is very expensive, averaging about $7500+ per year, and that is not including a mandatory meal plan!

 

We did sock away a year's worth of tuition fees and we also purchased a pre-pay plan (which will end up covering 1 year of dd's housing) and dd has completed a year of college credits by doing 30+ credit hours while still in high school.

 

Bottom line, we will end up spending $20K, total.

 

I cannot imagine that college education will continue as it is now. First, too many unqualified people are now attending college and degrading the value of a college degree. Second, there are too many for-profit schools that have questionable policies and practically worthless degrees. Third, the cost of higher ed is increasing too quickly.

 

Something has to change, but I wonder: what will it be?

Edited March 26, 2011 by distancia

[Nan in Mass]

I think Massachusetts has a scholarship for students who do well on the state tests, the MCAS. It pays for "tuition". The hitch is that "tuition" is really just a small part of "tuition and fees", and doesn't inlcude books, and room and board.

[mooooom]

A woman in my office is a single mom w/ a lot of debt from a nasty divorce. Her EFC came out to $5000. Her dd is a good student, got into all the schools she applied to, 6 AP classes, etc. Her best offer for a school AFTER financial aid came back - $19,000/yr. So what is even the POINT of the EFC?

[Jane in NC]

 

I wonder if this system is so screwed up because NO ONE is talking.

 

 

 

Dear Janice,

 

I'll snip your post to focus on this one line.

 

Several of us have been talking but apparently not clearly or with enough volume. Nan ran a series of surveys to help the gentle readers understand the numbers for parents on this board. Besides being the broken record of "save, save, save", I have repeatedly told parents that they may have a philosophical difference with FAFSA, but that does not alter the outcome of the parental role in the college financial equation. Perhaps part of the problem is that the larger discussion of the college funding issue takes place on the business pages of newspapers. (I'll let the reader draw her own conclusions from that!)

 

You have a double whammy: you live outside of NYC with its high cost of living and live in a state that has few public universities. A family in another part of the country may not be in such a pinch. Further, it would not surprise me if state governments try to help balance their budgets on the backs of out of state students by raising tuition disproportionally in ensuing years.

 

If you read financial planning information, there is always a bit about planning for college. I think parents find the amount of money that they are "supposed" to sock away (two, three, four hundred a month!) laughable until their child reaches eighteen. Sure, I appreciate the fact that most families are not going to having this sort of elastic in their budgets unless they sacrifice something else. Some of us do that but then some of us have a natural aversion to debt so saving is like breathing. (I'm not patting myself on the back for this one. I'll just note that I read the business pages of newspapers.)

 

Let me take this opportunity for those who did not see it to examine the results (or participate in) Nan's polls. Here, here, and here. Am I missing one??

 

Threads like this are so valuable because we do need to talk about this. Students need to be in that conversation. For some families, this is awkward. They do not want to be upfront with their children about money (I'm thinking of a family member, not pointing fingers).

 

Further, this gives Kareni a chance to promote her WTM matchmaking service. ;)

 

Jane

[jld]

Janice in NJ, that was a great post. Thank you so much.

 

It would be interesting to hear people be honest and open and specific about costs and how they're paying them. That seems to make people uncomfortable, though.

[FlockOfSillies]

Janice, this is one of my mental obsessions. The simple fact of the matter is that the insanity won't stop until there is a widespread revolt among parents who decide to put their collective foot down and say, "No! We can't afford this! No more!"

 

When my sister went to college at a state school in the early '80s, she was able to work at a department store and put herself through school, all the way to a master's degree. Eight years later I went to a private school and my folks took out a loan on their house to put me through. I had a President's Scholarship that covered 20% of my tuition, and eventually I was eligible for a state grant.

 

Since my sister started college, tuition has risen over 500%. The more federal aid flows into the system, the more colleges ramp up their tuition and fees. The colleges and the feds don't want to stop the flow of money, so it's going to be up to parents all over the country to close their checkbooks, push away the loan docs, and walk away. The governor of TX has proposed that his state come up with a "$10,000 degree." (Can't remember if that's $10K/year or total. I think it's total.) And I heard of one college that has dropped its tuition costs 10%. So there's at least the beginning of some change.

 

For my kids, who knows? I'm kind of pinning my hopes on the bursting of the education bubble, or my husband's ability to get a job at a college so that we can get an employee discount, or that my business will help us sock away enough for each kid that we can make it work even if the costs stay unreasonably high. (Plus lots of AP and CLEP, plus CC classes if we can get them...)

 

And don't get me started on the phenomenon of letting unqualified kids into college and making them pay top-dollar for remedial classes, only to see them drop out after a year or two. Meanwhile, our brilliant homeschooled darlings can't find space in the freshman class. Grrr.

[Jane in NC]

It would be interesting to hear people be honest and open and specific about costs and how they're paying them. That seems to make people uncomfortable, though.

 

One cannot expect people to be specific in the cyberworld; further, in real life, I find that most people do not want to discuss money. They'll discuss religion, politics and their sex lives before discussing their finances!

[Janice in NJ]

Hi Jane,

 

Anything (dare I say everything!) I've learned about this process has either come directly or indirectly through you gals on this board. For that I am deeply grateful.

 

My comment was about real life. I don't know people in real life who talk about college financing openly. Maybe it's where we live. :001_smile:

 

Thanks for pointing me toward the clue phones a while back. I'm deeply grateful for that! :001_smile:

 

Peace,

Janice

[creekland]

A woman in my office is a single mom w/ a lot of debt from a nasty divorce. Her EFC came out to $5000. Her dd is a good student, got into all the schools she applied to, 6 AP classes, etc. Her best offer for a school AFTER financial aid came back - $19,000/yr. So what is even the POINT of the EFC?

 

For those of us where finances are an issue, one not only needs to know their EFC, it is also helpful to look at schools that guarantee to meet need (this means they guarantee to meet all need about what they say is need. This may be just the EFC or it may be higher based on the College Profile.). Part of the need can be met with federal loans at some of these schools. The rest is not. Some schools still offer to do it all without loans. They can be competitive to get in, so good scores and extra curriculars are essential.

 

It is simply critical to look at which schools are well-known for aid and which ones aren't if finances matter. While I don't limit where my boys apply due to finances, I do have a talk with them about what is realistic and what isn't based on "general" knowledge of the schools. They know, in the end, finances will matter.

[Nan in Mass]

I have gone way, way past the comfortable point in my efforts to be frank about how we are managing two state college tuitions and one community college tutition. So have a few other people here. Yes, it is terribly posting publicly about your family finances when you were raised not to mention them even within the family. It is also terribly uncomfortable talking about adult children. I have done it anyway. People don't seem to be listening even when some of us have taken this risk. I think that is probably because we are saying there are no easy answers. This isn't one of those things where there is a secret way of getting what you want that we can share. The only way to do it is hard work - lots of hard work. And even that may not be enough.

-Nan

[Jane in NC]

Thanks for pointing me toward the clue phones a while back.

 

Janice,

 

I had to look "clue phone" up! You had me scratching my dowager's skull. :001_smile:

 

Jane

[Nan in Mass]

And what is a clue phone? I was wondering, too.

: )

[Jane in NC]

I have gone way, way past the comfortable point in my efforts to be frank about how we are managing two state college tuitions and one community college tutition. So have a few other people here. Yes, it is terribly posting publicly about your family finances when you were raised not to mention them even within the family. It is also terribly uncomfortable talking about adult children. I have done it anyway. People don't seem to be listening even when some of us have taken this risk. I think that is probably because we are saying there are no easy answers. This isn't one of those things where there is a secret way of getting what you want that we can share. The only way to do it is hard work - lots of hard work. And even that may not be enough.

-Nan

 

I realize now how grateful I am to my late mother-in-law. After my husband's father had a stroke, she took over the finances which her husband had controlled. At the time, I had my first job out of graduate school and wanted to learn about investments. So the two of us read and exchanged books and financial publications. We figured it out together. She was very open with me about her finances, even before I married her son. I think she saw that I had a head for it. That is the time to start--before kids. Which is why I have worked with my son on the idea of budgets, investments, etc.

[Jane in NC]

And what is a clue phone? I was wondering, too.

: )

 

According to the Urban Dictionary, it is

An imaginary phone, whose futile hope, is to alert the terminally oblivious to reality.

[Janice in NJ]

Hi Nan,

 

Please know that it has made a difference for some of us.

 

Older ds had hoped for one private school in particular. But the past year has been one of caution - thanks in part to your willingness to stick your neck out. :001_smile:

 

We are actually very psyched about his choice even though it isn't what he thought he wanted. This is partly because of your willingness to stick your neck out.

 

So why the lament? I'm wondering with great sadness what the folks who don't have a Nan and a Jane are feeling! Maybe everyone everywhere has a Nan and a Jane. But I don't know what I would have done without mine!

 

 

Thanks for making life grand!

 

Sincerely!

VERY sincerely,

Janice

[Nan in Mass]

I wish I could make it better for everyone. I wish I could find good jobs for all those families struggling. I wish there were some way of getting all the hardworking scholars here the college education they deserve. Here and everywhere.

 

People love your posts and you write so well. You, too, have been brave and posted frankly about your trails and tribulations. Hopefully it will help people to make a plan B and a plan C, just in case plan A doesn't work. Hopefully it will persuade people offer their children support navigating through today's world of complicated college applications and spiralling college costs.

-Nan

[Nan in Mass]

Ah - related to "get a clue" I presume?

I didn't know about the urban dictionary. I usually just ask my children, but nobody is home at the moment. How handy!

: )

[Jane in NC]

 

People love your posts and you write so well. You, too, have been brave and posted frankly about your trails and tribulations. Hopefully it will help people to make a plan B and a plan C, just in case plan A doesn't work. Hopefully it will persuade people offer their children support navigating through today's world of complicated college applications and spiralling college costs.

-Nan

 

Copying Nan's post to preserve a typo which I think is most appropriate for Janice and her journey with her little people: Trails and tribulations.

 

Cheers to Janice for documenting her most amazing journey on terrain more rugged than some would choose to take.

[Nan in Mass]

Oops LOL - but it does seem appropriate.

I, too, wish to thank Janice for taking us all along for the ride and making us not feel so alone in our struggles.

[Janice in NJ]

Oh. My. Goodness.

I truly hope that someday I can meet you guys. I will either whoop for joy or fling myself onto your shoulder and sob uncontrollably. (There is so much to this process that never gains vent. There is just no one who could absorb it and take it from me without being overwhelmed by it. Somehow I think either of you could. I could unburden by soul without overwhelming yours. It could pour out of me and be gone. Truly gone.)

 

I wish I could know you IRL. I don't know what I would have done if you were not in my life at all.

 

waterworks. not like me.

 

Thanks,

Janice

[Nan in Mass]

Pat pat pat

maybe some day...

[MicheleinMN]

For those of us where finances are an issue, one not only needs to know their EFC, it is also helpful to look at schools that guarantee to meet need (this means they guarantee to meet all need about what they say is need. This may be just the EFC or it may be higher based on the College Profile.). Part of the need can be met with federal loans at some of these schools. The rest is not. Some schools still offer to do it all without loans. They can be competitive to get in, so good scores and extra curriculars are essential.

 

It is simply critical to look at which schools are well-known for aid and which ones aren't if finances matter. While I don't limit where my boys apply due to finances, I do have a talk with them about what is realistic and what isn't based on "general" knowledge of the schools. They know, in the end, finances will matter.

 

I truly wish I had known more about percentage of need met figures at more schools BEFORE dd applied. Our EFC is $200, really...that's it...if that tells you anything about our finances, and some of these schools are still expecting us to come up with $6000-$10,000 on TOP of the $6500 worth of loans she is expected to take out per year. REALLY??

 

Thinking, thinking, and re-thinking what to do.

[Jane in NC]

I truly wish I had known more about percentage of need met figures at more schools BEFORE dd applied. Our EFC is $200, really...that's it...if that tells you anything about our finances, and some of these schools are still expecting us to come up with $6000-$10,000 on TOP of the $6500 worth of loans she is expected to take out per year. REALLY??

 

Thinking, thinking, and re-thinking what to do.

 

A point for newbies to consider: Some colleges ask for additional information beyond FAFSA. This might include information about the equity in your home. I remember reading an article in the NY Times which quoted officials from one prominent university in New England who said that they expected parents to use equity in their homes as a cash machine to help fund their child's education! This was before the '08 debacle, so I don't know if they have reconfigured their methodology.

 

FAFSA does not consider retirement accounts but the dreaded Profile does. Be forewarned!

 

Jane

[Photo Ninja]

Good to know. I hadn't thought about that. But of course the cost is going to go up. Even if the student manages to hang on to the scholarship - that's fixed- so we are going to be looking at more money out-of-pocket each year.

 

Got it. Thanks!

Janice

 

That has happened to us. My ds got a 50% tuition merit scholarship as a specific amount of money, one of the best the school offers. It is renewable as long as he maintains the minimum required GPA. But it was only 50% his freshman year because tuition increased last year and is going up again for next year. I don't know what the actual percentage of tuition his scholarship will be worth his senior year. The scholarship is still the same amount of money, but certainly won't be worth 50% of tuition. But I am still grateful for the scholarship because ds wouldn't be at the school without it.

[jld]

Hi Jane,

 

Anything (dare I say everything!) I've learned about this process has either come directly or indirectly through you gals on this board. For that I am deeply grateful.

 

My comment was about real life. I don't know people in real life who talk about college financing openly. Maybe it's where we live. :001_smile:

 

Janice

 

No, I think it's everywhere.

 

Jane, I think you are right about its not being realistic for people to be open, honest, and specific, even if personal stories are often an effective learning tool. (Who among us is obliged to be a learning tool, anyway, lol?)

 

Nan, I feel I've been pretty open here, too, even if that may be unadvisable. It really is pretty difficult to talk about money in any way that doesn't make at least some people uncomfortable in some way. And so maybe it isn't a good idea to talk about things that make us uncomfortable, especially personal things.

 

I used to wonder how people could afford big college bills, and then I started reading articles on the internet about it, usually involving student loans, and I started getting more of an idea on how these educations are being financed. I didn't understand how people were affording expensive houses ten years ago, either, but I've certainly learned more about that since the financial crisis. And reading about these things has made me read more about economics in general, and how the middle class is being squeezed, which has influenced my voting habits.

 

I think the advantage of personal stories is that they put a real face on statistics. When I hear that people need at least $300k to retire (this was a figure from some years back, so it may have gone up), and then I hear, from one speaker, that the average baby boomer has $1100k saved (once again, this is old info, secondhand from my sister, who actually heard the speaker), I start wondering how people are going to afford to retire. And then I read in the paper that people seem to be retiring anyway. And then I hear that politicians want to do away with social security (okay, maybe just for the 40 and under crowd, which includes me), and I really start wondering how these retirees are going to manage. And I wonder why any majority of people would vote for these politicians!

 

The more accurate info we have, the better chance we have to make wiser choices. When we contribute to these forums, we're educating each other and facilitating wiser choices, at least imo. I, too, Janice, have learned more here than from random parents of college students I know. And almost no one in real life ever talks specifics of money that I've heard, either.

 

I can certainly see the case for privacy. I'm grateful to people who have shared even a glimpse of their real life situation, because it shows what realistic options are out there for middle class folks like me. I think Janice said that there is a lot of smoke and mirrors in the college sales scene, and posts like hers can help us on these forums become a little wiser to the game. Thanks again.

[Kimm in WA]

MicheleinMN,

 

Don't be too hard on yourself. The % really is meaningless. I really researched these. DS got into some really good schools and with the %'s posted we really thought they were possible.

 

Unfortunately, the consider huge parent loans (that we won't take out) as part of their "financial aid package" and therefore it counts toward their % of need met. I mean we're talking like $27,000/year! And this is with a son who got good need-based AND merit aid.

 

Kimm in WA