@thumper1 I don’t think the OP has two younger kids. That was a subsequent poster tagging on.
Sorry to be so prolific, but I have one more point. OP: You didn’t say how you and your husband earn a living. If you are able to control your income, I’m thinking you have your own business. In that case, all bets are off. NPCs are most accurate for W-2 workers. The value of your business will count and the different classifications will have different impacts (S Corp, LLC, etc.)
Bottom line: DO NOT try to limit your income. You should be doing the opposite – try to earn as much as humanly possible. There really is not that much aid to be had unless you really, truly are poor. Besides, it completely depends on the college, as others above have said, and you have zero idea where he will be accepted.
Am I sure of where he’ll get in? Of course not. I just want to know what kind of work we need to do to get him as much money as possible once and wherever he gets in. And I also want to make sure we are not doing anything right now that will hurt his financial aid chances later. I am treating applying and FA as two completely separate things – my son is focused on the first and I am focused on the latter. That said, I have much to learn.
Your screenname is CT parent…so i will use University of Connecticut as my example. UCOnn is a great research university. The school does NOT guarantee to meet full need. IF your EFC is $0 which would mean an income in the $30,000-$40,000 a year range…you would get a $5800 a year Pell Grant and a $5500 Direct Loan for freshman year.
This year, the cost of attendance for instate student is $32,000 a year or so. So…your guaranteed aid would be a rousing $11300. How would you pay the other almost $20,000 for your kid to attend if your family income was only $40,000 a year (remembering that your take home pay would be FAR less than that)?
Once more…you are being penny wise and pound foolish. You are assuming your kid will,get some HUGE financial aid award someplace when in fact MOST COLLEGES do NOT meet full need…they just don’t.
I will say this again – the first people in line to pay for a student’s college education should be the student’s parents, to the best of their ability. You should be trying to figure out what you and your husband can reasonably do to improve your financial situation, instead of trying to figure out how you can “lower your income” so that you can shift this burden on to someone else.
Start making lists of places where he’d get big merit then.
Totally grew with @BelknapPoint .
Reality is…there is NO WAY to predict the financial aid landscape for two years from now…and forward. Things re changing all the time. For example, this is the last year Perkins Loans will be awarded. Many low income families needed those. Costs of colleges will likely continue to increase, but the likelihood of the Pell Grant getting larger is very small.
Maybe…and it’s a HUGE maybe…your kid will get more financial aid if your income is lower…but there is no guarantee he will get ENOUGH financial aid to cover his costs. The lower your income, the less you will be able to help with college costs if needed.
If you REALLY think you can live on $40,000 a year…but you are currently making $80,000, then put that extra $40,000 into a 529 for the next two years. It will do two things…it will give you a nest egg to help with college costs…AND it will let you see how living in that amount works.
Honestly…I would WAYYYY rather leverage my bets on trying to earn more income to help my kids with college costs…than to hope that they get accepted to colleges where they will receive full funding…because really…with full Pell eligibility…you will need FULL funding to pay college bills…unless your kiddo goes to a local community college.
OP, chiming back in. I was asking about a hs sophomore – do not have younger kids, that was another poster – and my sophomore’s 529 is in his name, no grandparents involved, unfortunately. For the record, I never said I was looking for full ride. If we get 20% off a $60K year tuition cost, that is really the kind of fantasy I’m entertaining. And I’m getting the picture that I’m setting myself up for disappointment by trying to achieve that by imposing a low income when we might not have to. Okay. And hands off the 529 (for awhile). Thanks for all the great and fast responses.
By “in his name,” do you mean that he’s the beneficiary (which is obvious), or that he is the owner and beneficiary of the 529? If your sophomore son isn’t the account owner, who is?
Sorry i dont have paperwork in front of me rn but i set it up. Statements come to me and son is beneficiary.
If you want 20% off $60K, he could do that with merit aid at a lot of pretty good schools if he has solid but not spectacular stats. For example, Macalester, Kenyon, Oberlin, St Olaf, Lawrence, Dickinson, and Grinnell are all schools that regularly award that level of merit for students they want. That is a lot better way to go about this than trying to game the need based aid system.
Under these facts, your son as a minor could either be the owner or not. A 529 that is owned by a minor must have an adult custodian who receives the statements and manages the account, until the minor owner/beneficiary reaches the age of majority. Unless you used your son’s money to fund the 529, it’s very likely that you are the account owner.
I hear you and that is really what im going for but does it have to be one or the other? There are students who qualify for both merit and need, yes?
No, it was my money that i used to fund it. I wrote the check. Not from my husband’s account either.
Of course! But to be honest, there is a very good chance you won’t be eligible for need-based aid with a HHI of 70k.
There are a LOT of schools where the only need-based aid you’ll get is federal aid and that is likely beyond Pell.
Merit is WAY more of a stable and secure way to go than need-based aid except for at the tippy top schools… and as a sophomore you really don’t have any idea of whether or not he’ll even be in the running for those tippy top schools.
I’m sorry but as someone who grew up and went to school poor, with parents who couldn’t (not didn’t want to) earn more money, it really, really gets under my skin when people try to “game” the system… and honestly, it’s WAY more likely to come back and bite you in the butt than to help your son. Why? Because aid is almost never 1-to-1. For every dollar you earn, your aid goes down by < $1. Even after taxes, there is almost never a point where it’s in your best financial interest to make less money.
Yes, but not all schools award both need aid and merit aid. All the Ivies only award need. Most of the top level schools also focus on need, with maybe a few merit scholarships to the top students (Stanford, Duke, the LACs in New England). Many of the public schools only have a small merit program and give most of their need based aid to very low income students. Many of the midwest LACs award a lot of merit. A few schools, pinned to the top of this forum, give big merit (Alabama, Ole Miss, Oklahoma) but then not much in need based aid (because your need has been met). We don’t know what you are looking for. We don’t know how much merit your son could get because we don’t know his stats.
To get both, you have to be willing to go to the schools that award both.
I suggest you pick 3-4 schools your son would like to attend, a big state school, a small public, a private, an elite. Run the NPC with your current figures, with parent ages (you do get a small allowance for savings), with your current income and assets, with your son’s gpa and scores, or what you think they might be based on school standardized tests or maybe practice tests (or you could run the same NPC changing the ACT from a 26 to a 32 and see if any merit pops up). It will give you an idea of what’s available. I think you’ll find that if you earn $70k or $75k will make very little difference (unless you live in a state with a state grant with a hard cut off - California has some)
@ctparent2019 Not a wise strategy. If you are seeking money, the F/A and merit award landscape at various schools should influence where he applies.
That would be $12,000. I agree with the others upthread who said to look for that in merit. Merit awards are usually recurring for four years.
Where would I look to check the merit landscape?
Even schools that award merit and need don’t “stack” them all the time. If you earn a merit award for $10K, but have $15K of need based aid, guess what? You don’t get $25K off the price. Usually they replace $10K of the need based aid with the merit. So you get $10K of merit and $5K of need based aid – and the same net price. Outside scholarships are sometimes treated the same. Some schools will apply merit differently (maybe reduce the loans, for example). Every school is different, and it is hard to tell from the web site how they will handle it. But a lot of schools don’t allow the aid to stack.
The best merit comes from the colleges themselves, not from outside scholarships. And as mentioned above, they are usually given for all four years (so no matter what happens to your financial situation, you can count on at least that much of a discount).
If you want to know if a college offers merit aid, Google the college name and “Common Data Set”. Most colleges have this document available. You can get a lot of great information from it. In the financial section, it shows how many students get non-need based aid and the average amount. Roughly, think of it this way – if 10% of students get merit aid, and your kid is in the top 10% academically for the school (especially in test scores), you have a good shot at some merit. Now schools have their own (often opaque) rules for awarding that merit. See what you can glean from the school website as well. And look over accepted student threads out here to see what types of students seemed to get the merit awards.
I don’t think it is a very successful strategy, either, to focus on schools that just have a few high dollar merit awards. I think schools like Duke & Vanderbilt have some merit, but it is wildly competitive. They are trying to draw away kids form the very top schools with those awards. I think it is sort of cruel for parents to tell their kids to apply to those schools, but they can only go if they get those huge awards. Odds are really high the kid is going to be disappointed.
And if money is that important to you, take a hard look at your in-state public universities. Cheaper to start with (your tax dollars at work), and sometimes there is merit there for good students as well.
There’s a long-standing thread pinned in the Parents’ Forum of this site:
http://talk.collegeconfidential.com/parents-forum/52133-schools-known-for-good-merit-aid.html#latest
Also, look at the individual college websites. Here’s a description of the scholarships for out-of-state students at University of Vermont, for example.
http://www.uvm.edu/studentfinancialservices/scholarships_prospective_out_of_state_resident_students
Finally, after he takes his SAT or ACT, come back here, post his scores and GPA, and ask for help finding colleges where he might qualify for merit awards.