? about college financial aid criteria

[disneysteve]

I don't know if any of you can answer this but I was wondering about something. Our daughter is entering her senior year of high school so paying for college is rapidly approaching. I'm wondering how certain moves we make now could impact what aid she qualifies for. For example, is it better to have more debt and more savings or less debt and less savings? We have a mortgage and a car loan. Should I take money out of savings to pay off the car or pay down the mortgage or is it better to have the debt on the books when we apply?

[moneybags]

My guess is that you won't qualify for any aid (middle class problems!), unless your daughter goes to Harvard or a similar institute that has a lot of money to hand out. Pick a few schools that she is interested in, go to their website, find the financial calculator, and plug in your numbers. This will give you your EFC (expected family contribution).

See this link, scroll down for 10 tips on maximizing aid: http://www.finaid.org/fafsa/maximize.phtml

The only way I found for my daughter to get financial aid was for her to no longer be my dependent. This involved her getting married or having a baby, so she passed on that plan.

[BMEPhDinCO]

As I recall, they don't really care what your debt is, just your cash. They do count "Contributions to tax-deferred pension and savings plans." as income.

One calculator (you can reach through the previous poster's link) lists:

Adjusted Gross Income (AGI): ?
Federal Tax Paid: ?
Earned Income (Father/Stepfather): ?
Earned Income (Mother/Stepmother): ?
Worksheet A (Untaxed Benefits): ? calculate
Worksheet B (Tax-Deferred & Untaxed Income): ? calculate
Worksheet C (Student Aid Included in AGI): ? calculate
Liquid Assets (Cash, Savings, Checking): ?
Net Home Equity: ?
Net Worth Business or Farm: ?
Other Investments: ?

So basically, the best thing to do is pay off the car, but the house is a bit of a wash (cash vs increased equity) and any money SHE has is also counted (529, grandparents, summer jobs).

One thing to keep in mind, the FASFA has to be filled out in FEB or MAR for the following fall, so get your taxes in order QUICKLY so you can fill it out. The longer you wait, the less she can get, if she gets anything.

Finally, from my days, the person in the best position was an "independent" with no job - yikes! Be happy she has family to help with and be prepared to "help" (or help with getting loans).

[snafu]

Our DSs applied for a ridiculous long list of grants, awards, bursaries, small scholarships etc and were remarkably successful but it takes a whooping amount of time and research. Do any of your congregants offer personal or work in businesses that offer bursaries?

While it's not applicable to DD's program, the best deal of all both scholastically and financially was DS2 attending local Community College for 2 yrs, having 1st confirmed their program was *fully* transferable to the University.

[debtfreeme]

college financing

It has been a while since I needed to do this but when I was finishing school I applied for every scholarship I could whether it was income based, GPA, etc. I ended up earning scholarships even though I was not going to major in their specific field but showed how my field was impacted by theirs or worked in conjunction with their field.

One such example: I was an international relations major with an interest in third world development. I was able to show a series of agricultural scholarships why this field was so important and linked to the Ag industry and feeding third world nations, saving the environment, etc. I got over 2500k from AG scholarships alone.

Just something to consider as she begins the scholarship season (which she should already begin researching scholarships and writing her draft essays).

And as a former admissions counselor for a UC campus: FAFSA ASAP.

And pay attention to your state deadlines as well. For instance in California the CA deadlines are March 2. That is the LAST date for applying for aid for the following year. LAST for state aid. So get the applications in ASAP. Cannot stress that enough!

And the third deadlines: your college or university will have even different dates to apply for financial aid.

And if she gets into the ivy league/top schools, many of those now say that students with financial need will graduate without student loans or middle class might have sliding tuition rates based upon what the student and family can contribute. They may have to work on campus jobs but students will graduate without student loans.

Article here:

http://www.financialaidfinder.com/50-colleges-pledge-no-loans-for-their-students.html

and here:

http://money.cnn.com/2010/04/09/pf/college/no-loan_financial_aid/index.htm

Oh, and call the FA office once the package is sent. Ask, is this the best you can do?

and ask when the "turn down deadline" is passed. The following week they will know how much money they still have from students who turn down the packages to attend other schools. You can actually get more then as well when they know how much is left.

Start early, track deadlines, get FAFSA done ASAP, and stay on top of the financial aid offices but don't bug them.

If I think of anything else, I'll write again.

[sblatner]

We just went through this whole ordeal. We are a middle class family with some savings and no debt - we live in California and are not wealthy. Our son did not qualify for any financial aid except a token $10k from Carnegie Mellon which left us with $52k to pay (hence he chose Berkeley at $32k per year). He did not even qualify for subsidized loans from the government. Just unsubsidized loans where the interest is not deferred.

I paid off all credit cards (so we owed $0.00 at 12/31), funded retirement, etc., before the end of the year to reduce our net worth and it didn't do any good.

Public schools require the FAFSA. Private schools also require the CCS Profile which is like filling out a tax return only worse. I completed the FAFSA in ten minutes. The CCS Profile took at least an hour or two and probably more over two days (and the questions were not always self explanatory).

You need to apply for the FAFSA just in case your situation changes from year to year even if you don't think you are going to get any money. I guess the CCS Profile, too, if your daughter goes to a private college. For instance, we have a friend whose son never qualified for financial aid until their second son started college. They then were awarded $11k. They were quite surprised after three years of nothing.

I wish you luck with the whole college experience. We found it a lot of work with not a lot of reward.

Also, I don't know if she is considering early admission to any school. Our son applied to Stanford early and didn't get in (lots of APs, 2270 on the SAT, 4.25 GPA, six college math classes). We found out later that unless you are the child of an alum, a recruited athlete or have tons of money, you shouldn't apply early because they only take 600-700 kids. Most of these are athletes and kids of alumni. If your daughter is thinking about early admission, you might want to consider these situations.

[sblatner]

And, to get off my high horse and answer your question, the FAFSA doesn't care about debt. I think the CCS Profile asks about your mortgage. So, if you owe a lot and pay it off and seriously reduce your net worth, you might be able to get financial aid.

Each $10k that you can remove from your net worth saves approximately $500 in what you have to pay for college. The FAFSA calculator can help you with that. I played with it a lot typing in different scenarios.

Also, unless you seriously reduce your net worth, you will probably only qualify for loans and not free money. You are so smart with your postings that I bet your net worth looks really good so you will only get loans.