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College costs appear the same? also home equity

rhandcorhandco Registered User Posts: 4,290 Senior Member
My son is targeting schools that range from about $40,000 per year to over $60,000 per year. We know we can't afford that without financial aid.

What I found by doing a bunch of "cost to attend" calculations using the College Board website, is that the okay private schools, some public schools, and the great private schools including Ivies all end up costing us the same!

Is that because if we use the same numbers for each school, the amount we can pay would be the same for all of them, regardless of the real fees?

It seems that if he can get into an Ivy, it would cost us the same as if he went to a state school as an out-of-state resident. For the past 10 years, we have been thinking that the Ivy would give us less aid, but they would give us more.

All of the colleges come up as $30,000 per year plus or minus a few thousand. The only difference appears to be most Ivies commit to grant only aid, so going to a "worse" school would put him much further in debt than an Ivy. One school that had been a top choice for him would put him in debt for $60,000 after he graduates; the Ivy with the least grant money would put him in debt for $20,000 after he graduates.

My other question is about home equity, why it matters. We own about 20% of our house, but we cannot access it at all. Why does that count against us when calculating needed aid? It's not liquid, and we can't get a loan for over 80% of the house value. I guess if we were able to sell in this market, we could get the money, but they can't expect people to sell their only house can they?
Post edited by rhandco on
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Replies to: College costs appear the same? also home equity

  • mom2collegekidsmom2collegekids Forum Champion Financial Aid, Forum Champion Alabama Posts: 83,927 Forum Champion
    The ivies and some of the other top colleges have deep endowments so they can afford to give a lot of aid if you qualify.

    Many state schools or other schools don't have as much aid to give....and many don't "meet need."

    Your home equity probably won't matter much or at all since you don't have a lot. For someone with 50% equity for a pricey home, a school might think that some of that can be borrowed against.

    P.S. I don't know which cheaper schools you're checking, but if they're OOS publics, those costs may be higher.

    Are you using the NPCs on each school's website?
  • rhandcorhandco Registered User Posts: 4,290 Senior Member
    Most schools have me log into my son's College Board account, and they do the NPC calculation there. Some schools note things like expected other costs, like travel to and from campus, cost for required co-ops, etc.

    I'd love to be able to access data on which schools are grant-only and which just offer loans. It's also confusing that schools can offer loans to give you "what you need" to attend, but then parents have to take out more loans if they don't have the ability to pay what FAFSA thinks they can. Paying for that $25,000 that FAFSA thinks we can afford is out of the question - we couldn't even afford a $3,000 vacation every year, and they think we can find $25,000 somewhere?

    And does anyone know if paying for those extra college loans could be taken pre-tax or not?
  • thumper1thumper1 Registered User Posts: 71,075 Senior Member
    Use the net price calculators ON the specific college websites.

    Is your expected family contribution coming out in the $25,000 range using the NPC.? If so, that is the minimum the colleges will be expecting your family to pay. Need based financial aid is NOT awarded to meet the EFC. It is awarded to meet the need beyond the EFC.

    No...colleges don't expect you to sell your house. But some do expect that you can use the equity to gain loans to help fund college.

    If you really can't pay $40,000-$60,000, or even $25,000 then I would strongly suggest you have two financial safeties on your son's list. These would be schools he would be happy to attend that either are within your price point, or offer him guaranteed merit aid based on his stats.

    The Net Price Calculators are good estimates...but really YOUR financial aid could vary a bit depending on your circumstances. For example, if either parent is self employed, or you own a business or rental properties, or any other real estate in addition to your primary residence, the NPC amount will likely be inaccurate.
  • mom2collegekidsmom2collegekids Forum Champion Financial Aid, Forum Champion Alabama Posts: 83,927 Forum Champion
    I'd love to be able to access data on which schools are grant-only and which just offer loans. It's also confusing that schools can offer loans to give you "what you need" to attend, but then parents have to take out more loans if they don't have the ability to pay what FAFSA thinks they can.




    I don't have that list, but typically it's the tippy top schools, which are (of course) super hard to get admitted to, so you can't just apply to those.


    It's also confusing that schools can offer loans to give you "what you need" to attend, but then parents have to take out more loans if they don't have the ability to pay what FAFSA thinks they can.


    Schools will put Stafford loans in the FA pkgs because they expect students to borrow to cover some of their costs.


    Paying for that $25,000 that FAFSA thinks we can afford is out of the question - we couldn't even afford a $3,000 vacation every year, and they think we can find $25,000 somewhere?


    Can you clarify....are you saying that the calculators are indicating that the "parent contribution" is around $25k and you can't come up with any of that....so you would need Parent Plus loans for all/most of that?

    If so, do you really want to end up with $100k+ in debt? it doesn't sound like you can afford the payments on such loans.

    I think you need a new list. Your current list all requires an unaffordable amount of "Family Contribution".

    If your child has the stats for those top schools, then he has the stats for very large merit scholarships at other schools.

    I suggest this strategy:

    Reach schools: Apply to a few of these top schools to see what happens both acceptance-wise and aid-wise.

    Match schools: Apply to a few of these schools that *might* give him HUGE merit awards.

    Financial safety schools: Apply to 2-3 of these schools. These would be schools that you know FOR SURE will give him HUGE merit (full tuition or more) for his stats. You can find these schools in this thread.


    Keep in mind that merit scholarships do NOT first get applied to "family contribution". NO. They first get applied to "need". So....to reduce the amount that YOU have to pay, the merit has to be SO HUGE that it covers ALL of "need" and then CUTS into "family contribution".

    For example:

    $40,000 = COA
    $25,000 = EFC (the amount that parents are supposed to pay)
    $15,000 = determined need, which may be covered with (maybe) grants, loans, work-study.


    At a school that gives your child a full tuition scholarship

    $40k = COA
    $25k = full tuition scholarship
    $5,500 = unsub loan to the student
    $9,500 would be the remaining amount...which could be reduced by economically purchasing books, spending less on travel, having the student contribute some summer earnings, etc.
  • mom2collegekidsmom2collegekids Forum Champion Financial Aid, Forum Champion Alabama Posts: 83,927 Forum Champion
    I just glanced at some of your past posts, and is your son a likely NMSF? If so, then he should include some schools that will give huge merit for that as safeties.

    Also...it is very important that you tell your son NOW how much you can spend each year on college, and how much you'd be willing to borrow (if any). Let him know what the NPC's are showing and how the expected "family contribution" is expecting your family to pay a lot more than it can.

    Are you willing to borrow $25k per year?

    Also, I noticed that your Son is looking at schools to play soccer. As you know that sport isn't a full head scholarship sport for men. Any aid he might get will go towards NEED, and will not reduce what you'd have to pay. You may not realize that.

    Also, (and this is from my sister whose son plays a college sport), having a child play a college sport often means that you (the parents) will want to travel a couple of times a year to see the child compete. That costs a good bit of money. Since you've mentioned that you can't afford a vacation, then affording this travel might be difficult especially if you're also trying to cover a high "family contribution."
  • sybbie719sybbie719 Super Moderator Posts: 22,121 Super Moderator
    It seems that if he can get into an Ivy, it would cost us the same as if he went to a state school as an out-of-state resident. For the past 10 years, we have been thinking that the Ivy would give us less aid, but they would give us more.

    Remember that even as a recruited athlete, the Ivies only give need based aid (no academic or merit scholarships).

    The only difference appears to be most Ivies commit to grant only aid, so going to a "worse" school would put him much further in debt than an Ivy.

    There are only 4 Ivies that are pretty much guaranteed to put no loans in their financial aid package; Harvard, Yale, Princeton and Penn.

    All of the others have no loan provisions tied to family income

    Also remember, that just because a school gives no loans as part of their financial aid policy, it does not meant that you are doing to be debt free. As you stated, meeting your EFC is going to be a stretch, so your son may have to borrow his max at a "no-loan " school just to help meet the EFC.
    the Ivy with the least grant money would put him in debt for $20,000 after he graduates
    we couldn't even afford a $3,000 vacation every year, and they think we can find $25,000 somewhere?

    However, if you have to borrow to meet your EFC, you are talking about more than 120k of family debt upon graduation
  • happymomof1happymomof1 Registered User Posts: 28,098 Senior Member
    Have you run your figures to determine how much it is that you can pay each year? Do you have any college savings at all? How much fat is there in your family budget? How much debt can you realistically take on as a parent (and yes some parents find that they can borrow for years 1, 2, and 3, but don't qualify again for year 4)?

    When you have that number, use that number not the number that the colleges/universities show on their NPCs to help make your son's list. Being cold-bloodedly realistic about the money now will save you and your son a lot of grief next spring.
  • Iron MaidenIron Maiden Registered User Posts: 2,051 Senior Member
    OP, the system expects that your family will pay for college out of savings, current income, and loans. Debt is not considered because it is a choice.

    Why on earth would you let your son target schools in the $40,000 - $60,000 range when you can't afford a $3,000 vacation? Makes no sense to me.
  • rhandcorhandco Registered User Posts: 4,290 Senior Member
    Thinking a bit more, our main source of funding would be 401K loans. I think we could do two years from them for $20,000 each, but of course we would have to pay them back (but to ourselves luckily). I am *definitely* going to look into that ASAP.

    mom2collegekids, you answered a question I was going to ask. I know that a freshman would have to be pretty good to get even a 0.5 scholarship, and I was assuming like you said it would go to need first. We are considering DIII for merit-based scholarships and playing soccer.

    Iron Maiden, my son is a 2015, and I am "letting him" target schools in that range because a) I didn't know that schools like Boston University and Maryland CP would be in that range (stupid me), and b) we actually *might* be able to afford it in a few years, because our finances might be changing for the better. I thought my alma mater, Penn, would be totally out of reach, and for about six months we thought that BU and Maryland were much more reasonably priced. Again, my bad.

    The trouble is that we don't know if our finances will change by the time he enters college. It is possible that he might defer admission to one of those expensive schools, and our finances would change in time.

    I will also be asking my dad about loaning us money. He is not that flush, but I'd rather have my son set up a loan agreement with his grandfather than with the government or a bank.

    Is anyone aware of an online tool to search for colleges that are in the $10,000 range for tuition, but SAT ranges are above 1800?
  • sybbie719sybbie719 Super Moderator Posts: 22,121 Super Moderator
    Iron Maiden, my son is a 2015, and I am "letting him" target schools in that range because a) I didn't know that schools like Boston University and Maryland CP would be in that range (stupid me), and b) we actually *might* be able to afford it in a few years, because our finances might be changing for the better.

    Personally, I would not put a lot of stock in BU's financial aid as there are a number of threads from families that are less than happy about the financial aid they receive. But to BU's credit, they admit to preferential packaging and to giving students an admit/Deny (will admit you academically but will give you a package that does not make it a financially feasible option).

    Do a search for BU financial aid, but you can start here:

    http://talk.collegeconfidential.com/financial-aid-scholarships/1341302-accepted-but-zero-financial-aid.html

    http://talk.collegeconfidential.com/financial-aid-scholarships/1344409-boston-u-financial-aid-2.html#post14429417

    http://talk.collegeconfidential.com/financial-aid-scholarships/1322609-can-boston-university-sued.html?highlight=boston+university
  • rhandcorhandco Registered User Posts: 4,290 Senior Member
    Valuable info sybbie719. My understanding on soccer scholarships is that literally nationally ranked players are the only ones who might get a full ride; they only have 9.9 D1 mens soccer scholarships per team (and you have to put out 11 players to play the game!).

    PS - my son is going for computer engineering and his father is in the field, so he should have the earning potential once he graduates and gets a job.

    Any thoughts on Drexel financial aid? The three co-op option is very attractive to us, and a close friend went there. Plus, their soccer coach knows him :)

    I am going to have to spend a lot of time searching for schools on this site. The only thing worse about committing to a school where you have to go in to $80,000 of debt is finding out it is $100,000 of debt...
  • rhandcorhandco Registered User Posts: 4,290 Senior Member
    Another thing about home equity - we might be getting a few thousand bucks from an inheritance, and paying off some of our house.

    Is home equity (paying off your house) treated the same as cash in the bank? Or does it depend on the school?
  • SlitheyToveSlitheyTove Registered User Posts: 6,348 Senior Member
    PLEASE find and talk to a flat-fee certified financial planner if you are seriously considering taking loans from your retirement accounts to cover college costs. You can take out loans to pay for college, but you cannot take out loans to pay for retirement. Even if you'll pay that money back to yourself, you're losing the value of compounding interest-free, which can be a big hit in the end. Please, please, please do your homework on this.
  • lookingforwardlookingforward Registered User Posts: 28,719 Senior Member
    Different schools look at home equity differently. In the CSS Profile, there is market value, purchase price, and balance owed. But, you need to account for market conditions and other variables, not assume any one estimate of the value of your home means that is what it could sell for, tomorrow.

    Offhand, though, if your equity is 20% against the mortgage, I don't think "a few thousand" is going to rub hard. Parent liquid assets have been tagged at roughly a bit under 6%. Legit retirement funds are protected.

    But, common wisdom is not to borrow against retirement, unless you are incredibly flush with retirement funds. The old expression is, you can borrow for college, you cannot borrow for retirement. [x-post with ST.] In addition to penalties, you can pay taxes.

    If you think Parent loans may be your path, be sure to look at the payment amounts and consider how each year's additional payment changes, as new loans are added in. Billing starts roughly February of each academic year.

    And, don't get sucked into the "dream school" thing. For many, the college choice needs to work for the whole family.
  • lammb66lammb66 Registered User Posts: 459 Member
    I was under the assumption when we started the college process that debt would figure into things for the FAFSA and it did not. As someone said they feel that is a choice. They also assume you have been saving over the years for college and didn't expect parents to come up with what is needed in one year. Unfortunately this does not happen for most of us. It is truly and eye opening experience. Also, University of Dayton is an excellent engineering school and they do give lots of financial aid.
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