right arrow
Examples: Monday, today, last week, Mar 26, 3/26/04

FAFSA, CCS, you loans and your savings

momsearchengmomsearcheng 47 replies5 threadsRegistered User Junior Member
Can someone who has experience with aid make suggestion what to do.
We do not expect much Financial Aid from public schools, but I am not sure how private college aid work.
We are definitely not eligible for federal help and do not expect one.
I am not very much familiar with CCS.
If family is making within 200K with 3 kids (at some point all 3 will be in college) what should we do in the following scenario?
Have about 55K not paid for a house loan( very low interest rate)
Have about 15k unpaid for car (0% rate)
Do not have any college plans.
Have some savings.
Have significant 401K.
Should consider to pay off house and car before filling FAFSA and CCS to reduce "savings"?
If child applies to private schools, will the child have a chance for any aid?
No matter how "rich" we are on papers, we cannot afford full pay private...
Will stick with in-state school if will not get merit aid.
11 replies
· Reply · Share

Replies to: FAFSA, CCS, you loans and your savings

  • ucbalumnusucbalumnus 78206 replies687 threadsRegistered User Senior Member
    Go to the web site of the college you are interested in and look for the net price calculator on its financial aid web pages. Use it to see an estimate of financial aid from that college (try scenarios of 1, 2, 3 in college to see what it may be like in different years with different numbers of college students). Do this for each college of interest.
    · Reply · Share
  • thumper1thumper1 74740 replies3274 threadsRegistered User Senior Member
    edited September 15
    Should consider to pay off house and car before filling FAFSA and CCS to reduce "savings"?

    The bulk of the need based aid calculation is based on your income.

    Do you have all that money in liquid accounts to pay off those loans?

    Keep in mind that some CSS Profile schools use the equity in your primary residence to some degree when calculating their need based aid awards. You might just be trading a savings account asset for a home equity asset...and that would gain you nothing in terms of need based aid...except that your savings is liquid and available...and home equity would only be useful if you sell your house or take out a home equity loan.

    Free advice that I’m going to paraphrase from another poster. Do not do anything for financial aid gain that you weren’t planning to do anyway. So, if you were not planning to pay off that house and car loan...don’t do it just because you think it will give you more need based aid, because it might not.

    If your kids attend colleges that don’t guarantee to meet full need for all students, all these financial gymnastics might yield you $0 in more need based aid.

    With one student in college and ah income of $200,000, it’s unlikely that you will see need based aid at most colleges.

    Figure out how much you can pay annually...and then let your kid know now! Let them know that acceptances without enough aid to attend will need to be dropped from consideration.

    Look for places with guaranteed need based aid based on stats, or schools that are within your price point.

    If you tell folks here your price point, and your kids SAT or ACT score and GPA, I’m sure they can give you suggestions re: places where your budget can be met.

    ETA...I found this from you...
    Child has relatively strong SAT. Math 790. English 760

    1550 SAT? Is that from one sitting? If so, look immediately at University of Alabama where your kid would get great merit aid assuming GPA is as high. Look at University of Arizona, Arizona State, University of New Mexico...all places where she would get great merit aid.

    All have very fine engineering programs!


    One last thing...yes, you MIGHT see additional aid when you have multiple kids in college...but I would suggest you not count on this. Life happens, and sometimes kids don’t go to college, or they enlist in the military, or go to trade school. Or delay their entry to college for a few years for some reason.
    edited September 15
    · Reply · Share
  • momsearchengmomsearcheng 47 replies5 threadsRegistered User Junior Member
    I do not think it is easy to make predictions. How much savings would be once first kid starts college depends of merit aid and jobs... (Our jobs are not very stable at this point. Both businesses were under water recently.) That would drive EFCs with 2 and 3 kids.
    My question was pretty much in general, should we pay off house and car since all financial aid depends of savings even in situation when paying them against the logic (low or not interest rates.) However EFC never depends on your current loans. Administration of colleges cares less that you have to pay your house, credit cards and cars. They assume that all money go to college, but you cannot ignore your loans...
    · Reply · Share
  • thumper1thumper1 74740 replies3274 threadsRegistered User Senior Member
    If child applies to private schools, will the child have a chance for any aid?

    Which private schools is this student considering. Some don’t give merit aid at all. Some have more generous need based aid than others. Some meet full need for all and others don’t.
    · Reply · Share
  • cptofthehousecptofthehouse 29413 replies58 threadsRegistered User Senior Member
    Go to the Net Price Calculators (NPC) of some school in your child’s list. Definitely, your state flagship. Throw in Harvard, Haverford, Hartwick as well. And UAlabama, Penn State, UArizona,

    How much do these each expect you to pay? For 2020 school year, 2018 income is used plus assets as of day you file.

    Which of those schools can you afford without additional merit money? ( automatic merit is usually built into the NPCs).

    Though you can rerun the calculators with two and three kids in college, not all schools will pay up the difference when you get additional kids in the mix, and the costs are good only for the oldest kids anyways. There is no telling, as @thumper1 says, on what is going to happen with the siblings. You can ask individual schools when it comes to the crunch time on how they treat aid when siblings go to college later


    The financial aid formulas are very heavy on income, running 22-47 %.
    of parents income after an allowance. -47% being top marginal rate. You can look up EFC estimator and see what your estimated EFC is.

    Most schools will not count 401k balances unless they consider them
    “Excessive” and that varies. The formulas will make you add back any contributions you made to 401ks and IRAs that given year as income.

    When it comes to assets, FAFSA does not count your primary home equity. Most CSS PROFILE schools do, but some cap that amount, as a general rule, you are better off with assets in your home equity rather than sitting in an account where they will be hit a full 5.6%

    Other than your mortgages and other secured loans against an asset that needs to be reported , any loans are not generally taken into account. For example , a school that just might ask for the value of your car, will want the amount net of the loan against it, but FAFSA and many schools’ CSS PROFILE will not ask about the car, is the loan against it is not included in the information. Credit card debt, general loans are not going to reduce your asset number. A strategy that can work is to use assets siting there to pay off your loans before submitting FAFSA and PROFILE To lower your hit. But remember, that hit is 5.6%. There might be good reason to keep a loan that is a good deal rather than paying it off.

    All schools ( very few exceptions) require FAFSA to be completed in order to be eligible for any student aid. It actually vets you and your student for access to some federaly backed loans and federal work study even if there is no way you qualify for Pell. Some state programs and merit money require a FAFSA filed as week. Most schools do not guarantee to meet financial need

    The schools that also require CSS PROFILE in addition to FAFSA tend to be more Generous and may guarantee to meet full need...as they define it, usually more stringently than FAFSA. At $200k, your DD May get some aid at the more generous schools, but costs for some of those schools are moving past $80k a year range. Not likeba few thousand in aid going to make a dent in that.

    So figure out what you are willing and able to commit to pay. Find some schools with sticker prices and guaranteed merit thatvare priced in that range.

    Then look at schools that have competitive merit money that can possibly bring the cost to affordable range. Your student is a contender for money from Duke, JHU, Vanderbilt, Rice, UChicago , Pitt, Maryland, Delaware, Kentucky, wakeforest, Richmond etc. look up full ride scholarships. There are lists you can google of the big number awards. Try “82 Colleges with full ride scholarships” These are lottery tickets, but your DD has the numbers to give it a go.

    Some local schools might have some goodies too. Have your student ask the GC about what’s out there for a student of that caliber. Make sure you know ofvany programs your state universities might have for top students that lower the costs.




    · Reply · Share
  • SybyllaSybylla 3813 replies48 threadsRegistered User Senior Member
    If you have 3 kids in college all attending $$ schools even with aid, can you afford it? That is what drives your application process. IMO pay off any debt, because that is just good sense if you might be unemployed/business disaster/health disaster etc. if you are @ AGI of 200K, run NPCs on generous schools and see that it is still unaffordable if you have no college savings. Some schools look at home equity.
    · Reply · Share
  • thumper1thumper1 74740 replies3274 threadsRegistered User Senior Member
    edited September 15
    Other than your mortgages and other secured loans against an asset that needs to be reported , any loans are not generally taken into account

    @cptofthehouse please tell me where on the Profile you report your mortgage payment or any other secured loan. There is no such place.

    The Profile asks for your equity in your primary residence but nothing about your mortgage payment. Re: cars, they ask for the value of your cars, not your car payment.

    You know...you can have a million dollars in home equity with a teeny mortgage payment...or none at all...or a huge one.
    edited September 15
    · Reply · Share
  • momsearchengmomsearcheng 47 replies5 threadsRegistered User Junior Member
    It sounds that all assets are hit with 5.6% to get to EFC. So we will have to pay for house regular 2.5% loan plus 5.6% in EFC. I guess it makes sense to pay out house in that case. We have to pay it in 3.5 years anyway and pretty much paying mostly principal at this point. We will have a bit more taxes though, but I would say insignificant amount.
    With car loan it is not clear cut, since we do not pay interest on that 15k. 5.6% would make only $890 extra in EFC per year.
    I am just afraid to end up with little liquidity in case we get nothing (most likely scenario). If we get no aid, we almost at a loss by paying car and house.
    · Reply · Share
  • SybyllaSybylla 3813 replies48 threadsRegistered User Senior Member
    edited September 15
    I assume you have twins and a singleton? what is your timeline? How much can you pay? Outside of lottery type schools, you may well get nothing for 3 kids in state schools. Even generous schools that give aid might have your EFC at more than state school costs. And crossover math is vital for when the numbers change as oldest kid ages out. Safety schools must be assumed as providing no aid. If you have your own business, the NPCs won't be reliable.
    edited September 15
    · Reply · Share
  • happymomof1happymomof1 29649 replies174 threadsRegistered User Senior Member
    You wrote that both employers have recently been underwater. So just exactly how secure do you feel your incomes are? If one job vanishes, how well can you make it on one income? How slow is the hiring cycle in that parent's industry? Think through your worst-case scenario too.

    How are you planning pay for your children's educations right now? Out of current income? Or, do you have some savings available for that? If you think you can do it out of current income, then pull that money out each month starting now, slap it into savings, and live as though you already had one kid in college. This will give you a clearer reality chack about what is possible.
    · Reply · Share
  • cptofthehousecptofthehouse 29413 replies58 threadsRegistered User Senior Member
    thumper1 wrote: »
    Other than your mortgages and other secured loans against an asset that needs to be reported , any loans are not generally taken into account

    @cptofthehouse please tell me where on the Profile you report your mortgage payment or any other secured loan. There is no such place.

    The Profile asks for your equity in your primary residence but nothing about your mortgage payment. Re: cars, they ask for the value of your cars, not your car payment.

    You know...you can have a million dollars in home equity with a teeny mortgage payment...or none at all...or a huge one.
    thumper1 wrote: »
    Other than your mortgages and other secured loans against an asset that needs to be reported , any loans are not generally taken into account

    @cptofthehouse please tell me where on the Profile you report your mortgage payment or any other secured loan. There is no such place.

    The Profile asks for your equity in your primary residence but nothing about your mortgage payment. Re: cars, they ask for the value of your cars, not your car payment.

    You know...you can have a million dollars in home equity with a teeny mortgage payment...or none at all...or a huge one.
    thumper1 wrote: »
    Other than your mortgages and other secured loans against an asset that needs to be reported , any loans are not generally taken into account

    Clearly, I was not clear. I wanted to say that the value of one’s home is reduced by the mortgage you have on it. You can have a house with a market value of a million dollars but if your mortgage on it is a million or more, it does not count towards your assets for financial aid.

    The same with any other assets with a secured loan against it. Like margin accounts and brokerage statements. A business with loans against. An expensive care that has a loan securing it to the lender.

    So, no , not the mortgage PAYMENT, But the outstanding amount of ones mortgage reduces the value of ones home.

    So mortgages and other secured loans against reported assets reduce the value of said assets.

    To be perfectly clear, the loan, the mortgage has to be legally specific to the item. You can’t take out a general loan and apply it against outstanding debt. The loan has to be specifically secured by that asset.
    · Reply · Share
Sign In or Register to comment.

Recent Activity