<p>CRD has a good point referring to debt of youtube. utube tells us college cost is 51 k yr, and was offered 2k. What utube hasn’t told us is what money did he have ready to pay. 20k yr? 10k? zero? When we consider loans we have to know that part of the puzzle.
51k - 2k - ?= Loans. We get a hint youtube expected 10k rather than 2k, which is the reasonable 8k yr as shown by crd. We don’t know even if utube was prepared to accept an offer if it had been 10k. Does utube have 41k he is ready to spend?
Did utube expect 51k yr to be reduced by 10k, then he could pay difference? Does utube only have 5k available to him(an example) then had expected college to grant the remaining full balance?
We don’t know.</p>
<p>We all must remember what is legal is not always what is ethical. For example: what if a student had it in his head that he had 8k cash, (2k per yr) that he’d spend on college, but would take no loans. So student applied ED to a college that has 50k yr tuition. School accepts student, and offers 10k in grants, leaving 40k bal due. Obviously, the 40k due is far from the 2k the student desired to pay. SO, many here would say student can withdraw from ED App based on the legal idea that he considers the financial package unacceptable; and cannot be legally forced to enroll in school.
That is just an example, but I think it demonstrates there can be a difference between ethical behavior and legal consequences.</p>
<p>You make some good points. Wellesley is a wonderful college, which is why it is the OP’s D’s dream school.
The OP also did due diligence, contrary to what some posters (who are very critical but did not do sufficiently critical reading of the OP) have written.
Based on what the OP wrote, I tend to believe that the “at least 10k” was based on very careful consideration of what the family could afford after belt-tightening measures, loans, part-time and summer work and other sources of extra income were realistic.
The $2000, by the way, sounds like it is a loan, not an outright grant.</p>
<p>Marite, I read the post like you did, that they had run the calculators and guessed that it would be Ok to apply ED. I feel that youtube applied in good faith based on what we’ve been told.</p>
<p>arp2600 I’m assuming you are asking for next year’s ED cycle. I would continue to dig deeply into the information on the particular school your son is interested in. When this year’s admission’s cycle is over take some time to talk to admissions and finaid at the particular college. The best advice is to be as completely knowledgeable as you can about the particular college and their finaid policies.</p>
<p>marite: I don’t think I had a problem comprehending youtube’s first post. They did their due diligence–as far as it went. I would recommend that people budget up to at least $6,000, perhaps $10,000, from their FAFSA EFC for the Profile. That will give them a more realistic amount that COLLEGES expect you to pay. In our case, we were not happy about it, but we chose to accept it because my S wants to go to this particular school and we think it’s the right fit for him. We could have chosen to send him to another private school which would cost us $15,000 less in overall COA–a school which gives merit aid. or our state flagship. In youtube’s case, she signed an ED agreement saying she would go to the school if accepted. If she had applied RD she could have shopped offers, but she wanted the admissions advantage in exchange for potentially having to pay another 8-10k a year. Her choice. If there was any question of ability to pay the COA by her family, she should have applied RD.</p>
<p>Same with the above poster who just asked the same question.</p>
<p>I don’t mean to be rude, but I can’t why this concept is so hard–unless some people here are playing games in order to bring down ED.</p>
<p>mummom,“budgeting” 6-10K up from FAFSA EFC is pretty dangerous for folks that own their home unencumbered, are self employed or own their own business, have their retirement structured differently than an IRA or a 401K, have relatively illiquid assets… and some other scenarios, as some of that is “counted” in CSS and not caputured the same way on FAFSA. Institutional aid is very complex and in earlier posts there are some scenarios posted about why there can be a very large > than $10K difference. I know in our case some calculators come in close to double our EFC but we have very little real cashflow and income (as evidenced by the EFC.) arp2600 you could always as for an early read on finaid, some colleges/unis will say no, some will do this.</p>
<p>They did their due diligence. That was all that was required of them. Nowhere do college websites tell applicants to budget xxx amount over what their due diligence calculations tell them their EFC is, do they? No, they tell applicants that they will meet $100 of costs.
Also, I don’t understand the logic here. There is an assumption that the OPs have cash to spare. Maybe if they had applied your budgeting method, they would, and the issue would be moot. But what if they had calculated to the last penny what they thought they could afford, what they would probably receive in aid based on their calculation, and decided to allow their D to apply ED to the dream school. So they’re off; the college calculations and theirs do not match. They do not have the extra cash to spare, already having decided to spend the next four years eating macaroni and cheese, and other belt-tightening measures. Can the D break the ED commitment?</p>
<p>I totally agree with you they should have applied RD. But it’s water under the bridge. I do not advise people to beggar themselves, their children, possibly their parents in order to fund education at a dream school.</p>
<p>I agree with you 100% Marite. My comment was more in the spirit of Braveheart (think Mel Gibson on a horse with a Scottish accent):</p>
<p>On your deathbed, many many years from now, will you wish that you could return to the Plains of Wellesley and risk a small amount of your retirement to send your daughter to her dream school.</p>
<p>There is a lot of hyperbole here. You don’t know that they “budgeted to the last penny” what they could afford, nor do you know that they would have to “beggar themselves” to come up with another $8k a year. </p>
<p>We are stretching, but, for example, we have not touched our retirement funds, or our home equity. As crd pointed out, there are most like plenty of other options.</p>
<p>Actually, I am talking about this year (Fall 2010 admit). The college has a second early decision cycle with a deadline in January. It also has a track record of admitting ED applicants at twice the percentage of RD. My son has good - but not great - GPA and ACT scores that place him right in the median for accepted students. So the benefit of demonstrating interest through ED may make a difference.</p>
<p>The college admissions office tells me that ED is binding regardless of the financial aid package, which is contrary to the Common App form. As I mentioned, the college does accept the Common App.</p>
<p>A few warnings on borrowing from one’s retirement account to pay for college:
You can only borrow up to 50% of your vested balance. If you haven’t been in the employer’s plan along enough to have earned non-forfeitable rights to employer contribs made on your behalf, that means there is less you can borrow.
Maximum repayment length on a loan for educational purposes is five years, unlike parent PLUS loans or a HELOC.
This is the kicker – if you leave the employer before the loan is paid off, the remaining loan balance becomes a taxable distribution to you, subject to taxes, early withdrawal penalties if you are under 59 1/2, and will show up as additional income on your tax return, which will then affect the following year’s FA.</p>
<p>Don’t do it.
Will now take off my pension admin hat again.</p>
<p>“In youtube’s case, she signed an ED agreement saying she would go to the school if accepted.”</p>
<p>That’s <em>not</em> what she agreed to. The contract said she may decline for financial reasons. She only “agreed” to go to the school if she could afford it with the FA offered. You are trying to make the contract more restrictive than it really is.</p>
<p>Many colleges are in financial straits. Not all are needs-blind or will meet 100% of demonstrated need. Many actually use the tuition to fund operations. This college is being up front with you and has put in stronger language than the Common App. They may really be relying on the guaranteed cash the ED students bring in to run their operations. The cash expected on RD has a much greater variance. </p>
<p>Could this be a binding legal contract? Could they sue you for damages? I really don’t know, but it’s clear that unlike Penn, they don’t want you to apply ED if you need finaid, and it doesn’t sound like they will meet your need.</p>
<p>As far as Youtube, it sounded like she could get the $8K by not completely funding her retirement. That’s not the same as borrowing against your retirement. I only suggested the borrowing if the math works out better because of company matching and taxes. If she had borrowed from her 401K in September 2008, her own loan might have been the best performing part of her portfolio.</p>
<p>Given those numbers and this situation, I personally would risk it. I don’t blame her if she doesn’t. It’s just not the kind of crushing debt that we’ve seen some people on CC consider. I just wouldn’t call her foolish if she took that small risk.</p>
<p>If there is a risk that the finaid package could be a deal breaker, then don’t apply ED. Take a look at all financial aid packages that come in and compare them. </p>
<p>115 pages of angst and there seems to be one point that many can somewhat agree on–the posters who applied ED and are wanting a financial out should not have applied ED. </p>
<p>You’ve come to this thread BEFORE jumping off the ED bridge. Don’t do it and you won’t be caught in that “water under the bridge.”</p>
<p>Mummom: You keep criticizing posters for making a lot of assumptions, but so do you. How can you know whether they have the means of stretching? They have not said so, have they? Not having intimate knowledge of their finances or lifetstyles, I’m taking them at their word, that they cannot afford.</p>