<p>There are all kinds of comments on CC about which schools give the worst FA and how that affects a schools retention rate for accepted students. What are your stories?</p>
<p>Well, this is an anecdote from a student I met at orientation at Ithaca, which seems to be recognized for giving horrid financial aid. </p>
<p>Apparently, he got his financial aid letter from Ithaca, and his need was not met. Quite upset, he called the financial aid office and they reviewed his financial aid letter. Shortly thereafter, he was sent a revised copy only to find that his aid had been reduced! Ouch.</p>
<p>Oh my goodness. That surely isnt a way to engender positive feelings by students and to recruit new students.</p>
<p>I think a lot of schools dont meet need. Only the schools with billions in their endowment can do that.</p>
<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/480180-colleges-have-given-you-disappointing-financial-aid-offers.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/480180-colleges-have-given-you-disappointing-financial-aid-offers.html</a></p>
<p>The college I attended raised tuition without raising the cap on institutional need-based aid. It required the poorest students (already with work study, summer jobs, and loans) to come up with more money on their own just to return to the school.</p>
<p>Here’s an experience I had with my son at his top choice school. After determining financial need, the school’s FA package listed his 529 plan money as a component of their aid. I was flabbergasted and after asking the FA office, they said that they listed it that way as a convenience to us! I wrangled with these people up until the May 1 deadline and ultimately my son, with great regret, turned them down because their offer was about $28,000 worse over 4 years than his other choices. :(</p>
<p>Ouch. 529 as part of their aid plan? I would think it would count from “self-help” EFC…</p>
<p>I have seen financial aid packages that list the unsubsidized Stafford, the PLUS loan and state loan programs as part of the school’s award. </p>
<p>Also I have friends who have kids at OOS unis where the OOS tuition sky rocketed while their students were there.</p>
<p>They keep raising their prices. Sometimes in lockstep with peer colleges to remain seen as “equally as prestigious”. But they often dont raise the financial aid with it…instead just offering “more loans”. Ditto for scholarship kids. Colleges are so inefficient. If a bunch of bean counters ran ‘that business’ a lot of things would change overnight. Its very daunting and disappointing. Its creating a class of elitism in private education that is not healthy for our society in my humble opinion.</p>
<p>The 529 as part of their aid? That’s a classic. And they probably include that in their statistics of average % need based aid awarded.</p>
<p>cpt, unsubsidized and parent plus loans must be listed on the award letter, per federal regulations. The reason is that not every student qualifies for unsub or PLUS funding. I have processed more than one student who was not eligible for sub or PLUS loans. I even had one student who did not have enough eligiblity to qualify for the maximum in subsidized loans for someone at her grade level. Also, schools are required to list any known source of funding being received by the student that must be factored into cost of attendance, such as grants, scholarships, state and alternative loans.</p>
<p>I did not make myself clear. It is one thing to suggest PLUS, but there is no way a FA office can know that the family is going to be able to get that loan until they apply. It is not an award. It is not something that the FA office can award. My son got some suggestions for unsubsidized Staffords when we did not even fill out a FAFSA, so again, they did not know if he/we were eligible for those monies. To me, an award is something that you are reasonably sure (cleared by FAFSA at least) that the kid can get. To offer loans and then require someone credit worthy to copay or to suggest the PLUS is not financial aid. When College Board or USN&WR compare financial aid packages, they do not include PLUS loans or other outside funding that is awarded because it is not an apples to apples comparison.</p>
<p>^ I’m new to this, but as I understand the PLUS loan it’s not exactly financial aid at all. It’s just a way for credit-worthy parents to raise the cash to meet their EFC if they don’t have enough available in cash savings, income stream, or liquid investment assets. So if EFC = COA, the institution will say you have no “demonstrated need” and therefore you get no need-based aid; but you can still get a PLUS loan (limited to COA less other financial aid, but in this hypothetical since “other financial aid” = 0, that’s COA). Provided you’re credit-worthy, of course. Is that right? But if that’s the case, how could a PLUS loan count as part of the aid package toward meeting “demonstrated need”? Seems to me that’s just a way for the college to stiff you on need-based aid and say, “Sorry, buddy, you’re on your own for this amount of ‘need’ but you can go out and get a PLUS loan to cover it . . . if you qualify.”</p>
<p>Wouldn’t a sensible alternative be to take out a home-equity loan (or line of credit) on your principal residence? I know mortgage lenders are in tough straits and these are much harder to get in the current market, but if you’ve got good credit and a willing lender, isn’t a home equity loan a better deal? The interest rate isn’t great on PLUS loans, and as best I can tell that interest isn’t tax-deductible, whereas the interest on a home equity loan is fully tax-deductible. Or am I missing something?</p>
<p>I agree with your first paragraph, bclintonk. The issue with home equity loans is that you may need the money at some other time for other reasons. The PLUS loans are available only during this window of opportunity when your kid is in college. Also if you have issues with the PLUS loan, you can negotiate without involving your home. You can always use your home equity loan to pay off your PLUS loans if you decide you don’t need that equity, but not the other way around. It just gives you more flexibility. In these credit tight days, it may be wise to keep that flexibility.</p>
<p>^ cpt,
that’s very helpful, thanks.</p>
<p>When I worked in financial aid, we also listed PLUS loans on the award letter (if there was a gap after awarding all other aid). This is a form of financial aid that is available to families to meet need gap … it is a federal program, so would be listed. We did NOT include the PLUS loans in our accounting of aid awarded to students, though.</p>
<p>Borrowing from one’s home or retirement isn’t a good financial strategy when it comes to paying for college. Too many variables. I would much rather put my eggs in the Parent PLUS basket than the home equity one. </p>
<p>If I had a financial setback, I could work with the lender to have a forbearance on a PLUS loan. Not so easy with a mortgage. Risking the loss of a family home would be horrible. </p>
<p>I agree - it would be better to take a PLUS and possible pay with a home equity if needed. Much less scary, than the other way around!</p>
<p>Nearly every student I have worked with has shown a PLUS in their financial aid package. Whether their EFC was $2000 or $40,000, it is listed as a possibility for parents and students to finance their student’s college education.</p>
<p>Even if a parent is offered say a $4000 PLUS loan, it is possible for a parent to finance up to the full cost of the education, less grants, scholarships and student loans. Too many parents do not understand this. </p>
<p>From our experience as parents, both sons aid packages have varied greatly. One of the schools that son got into last year was a PROFILE school and the aid package was $16,000 less than the FAFSA school that son will be attending in the fall. He got a scholarship, grant money, various work study and loan options, but the differences between the aid packages between two of the schools was mind-numbingly large. I am fortunate that my sons both applied to multiple colleges and could compare aid packages. I don’t know what we would have done with an ED offer. We aren’t in the low income range, but not rich, either, and certainly had to look at the best offer.</p>
<p>So many on this forum have won the aid game, and more power to them. We got good packages, but are still taking on a HUGE amount of debt to help with college for one of our sons.</p>