Financial Aid - Effect on Admission Acceptance

USAUGStudy · November 2, 2010, 4:30am

MY USA Citizen daughter currently in India with us, is planning to do undergraduate study in USA university after XII (IB Diploma). I am earning around $40,000 per annum in India and my only saving is in the USA retirement account ($300,000). I understand that FAFSA do not consider retirement account saving for Financial Aid consideration.

My daughter education is important for me. My first option is to get Financial Aid, Loan and the last resort will be to withdraw from retirement account for her College Fees.

I got impression that if we don’t apply for Financial Aid, it will increase chance of admission.

I have following question regarding Financial Aid and College Admission:

<ol>
<li>Will Apply for Financial Aid have any effect on Admission acceptance?</li>
<li>Can we apply for financial aid after admission is finalized?</li>
<li>Can we apply for financial aid from second year onwards? I am willing to sacrifice retirement saving for first year fee.</li>
<li>Can we apply FAFSA for Need-Blind colleges and NO FAFSA for other colleges?</li>
<li>DO I need to mention Retirement Account saving in the FAFSA application?</li>
</ol>

Thanks in advance for your advice.

thumper1 · November 2, 2010, 8:33am

<ol>
<li>Will Apply for Financial Aid have any effect on Admission acceptance?</li>
</ol>

Sometimes…but most schools are need blind for admissions so your daughter’s financial need will not be considered when she applies.

PLUS is she NEEDS financial aid to attend, it does you NO GOOD to say no to applying for it. What good would an acceptance do if she did not have the money to attend?

<ol>
<li>Can we apply for financial aid after admission is finalized? </li>
</ol>

Not usually for institutional aid…if you have indicated you don’t need aid, then most schools will not allow a change in application for their institutional aid after the fact…unless there is a change in your financial circumstances. If you are just doing this for the “edge” in admissions…don’t do it.

<ol>
<li>Can we apply for financial aid from second year onwards? I am willing to sacrifice retirement saving for first year fee.</li>
</ol>

At many schools if you don’t APPLY for aid the first year, you cannot apply for institutional aid in subsequent years. Check with each school.

<ol>
<li>Can we apply FAFSA for Need-Blind colleges and NO FAFSA for other colleges? </li>
</ol>

You can submit the FAFSA anywhere you want to…it’s your choice.

<ol>
<li>DO I need to mention Retirement Account saving in the FAFSA application? </li>
</ol>

The balance in your retirement accounts is not mentioned on the FAFSA. The contributions you make for the year are added back in as income when the calculations for EFC are computed.

NOW…I’m talking about institutional aid. If your child is eligible for federally funded entitlement aid, then they can receive that at any time (Pell Grant). In addition, they can get a Stafford loan by completing the FAFSA.

NOW…here’s the thing…you are talking about schools that meet full need in your post. You need to check to see exactly WHAT they require. Most of these schools also require the CSS Profile or a school financial aid form as financial aid application forms. Make sure you check EACH college for their required forms AND THE DEADLINES.

In you are only earning $40,000 per year in U.S. dollars and your daughter is a U.S. citizen, she would be eligible for a portion of the Pell grant, Stafford loan (subsidized as much as possible) and possibly work study. In addition, at those very generous schools, she would be eligible for some significant need based aid if accepted.

I would urge you to APPLY for the aid and apply to a variety of schools where your kiddo might garner need based and/or merit aid. On $40K income per year, it will be mighty hard to pay for a $50,000 plus per year college without aid. How WOULD you pay these hefty costs without aid? Don’t be short sighted about this.

Leave your retirement money IN your retirement account. Look for affordable options (with aid…and some that you can afford without).

alamemom · November 2, 2010, 10:14am

thumper answered all your questions - I just wanted to mention that the retirement savings are not listed on the FAFSA as long as they are in actual retirement accounts (IRAs, 401ks, etc.). Some people have money they have “earmarked” for retirement, but that is in other (non-retirement) accounts and investments. Non-retirement account funds would be listed regardless of what they plan to do with the money.

mom2collegekids · November 2, 2010, 10:39am

**
the last resort will be to withdraw from retirement account for her College Fees.**

That is a very bad idea. College is expensive and to withdraw that much for 4 years of college would be a disaster.

***2. Can we apply for financial aid after admission is finalized? **

*

If that was something that could be done and good aid could still be had, everyone would do that.

Applying late can often mean little to no institutional aid. Schools don’t like people trying to “game” the system by pretending not to need aid and then asking later. Some schools will refuse to give you aid unless some major tragedy happened…like death of the major bread-winner.

Can we apply FAFSA for Need-Blind colleges and NO FAFSA for other colleges?

Only do “NO FAFSA” for schools that you can afford to pay for all costs or you know she’d get assured big merit.

Later naming schools to FAFSA can mean less federal aid as well because work-study and other fed aid (like Perkins loans) may no longer be available.

Nearly all schools that want CSS-Profile are going to want FAFSA, too.

Some schools are “need blind” and meet meet need - however most need-blind schools do NOT meet need. Many are very lousy with aid.

What schools is your D applying to?

USAUGStudy · November 3, 2010, 1:17am

All your response are great help as we are not at all aware of the College Admission procedure here.

First of all, I do not intend to play any game with the college.

My plan is that if she get Financial Aid then I can continue to live in India ELSE if she is accepted without Financial Aid then we will move with her to USA, work in USA to support her Education.

Depending on response we will finalized the college.

sk8rmom · November 3, 2010, 7:15am

With a $40K income, I would recommend that you file FAFSA with her as she’ll likely be eligible for government grants (Pell, FSEOG) and work study, in addition to Stafford loans. That can easily total over $10K a year and may allow you to help her without moving to the states, while keeping most of your retirement funds intact.

I’m not sure how moving to the US will help you to support her…jobs are difficult to find right now and the cost of living is, I’m guessing, much higher here. Add in the expense and hassle of moving, getting work visas (if you’re not a citizen), etc. and it might be a wash at best.

mom2collegekids · November 4, 2010, 8:04am

^^^

I agree.

I don’t see how having her get accepted to a school and then moving to the US to pay for her schooling is going to work out.

I imagine that you would want to move near wherever she is, but there may not be jobs there.

Are you and your spouse citizens? Would you be able to work here?

Also… Do you realize that most schools do NOT give much aid?

Do you realize that the small number of schools that do meet need are the hardest to get into?

You mention that you earn $40k…what about your husband? How much does he earn?

What schools are being applied to?

mom2collegekids · November 4, 2010, 8:25am

In another thread, you mention applying to state (public) schools. She will be considered a non-resident and will be charged OOS fees.

She will not be considered a resident while she’s in school unless you move here and live here for a year. So, the first year, she would not be a resident at a state school, but she probably would the second (depending on each state’s rules).

BTW…public schools are “need blind”. They do NOT consider need when you apply.

Most public schools do NOT give much need-based aid.

However, some schools give good merit scholarships, so perhaps that might be an option.

Does she have any SAT scores yet?

You may be worrying about nothing if the schools that she applies to are need-blind. Most schools are need-blind (most don’t meet need, either). Where will she be applying to?

Financial Aid - Effect on Admission Acceptance

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