<p>Counting Down - that is why I said WITHOUT EXTENUATING CIRCUMSTANCES.
I was not saying that someone in poor health, or who has a very young child or a disabled parent, child, or other dependent should have to go to work. We all know people without these circumstances who do not work as a simple choice.</p>
<p>Thanks, Emeralkity, for providing the information I was wondering about.</p>
<p>“Before I get flamed, we won’t qualify for need-based fin aid. As most folks on this list know, full pay doesn’t require that one makes mega bucks!”</p>
<p>“I don’t know about the BMW part, but it seems like the combined incomes of two people of the typical age of parents of college students who are working many normal (not super-high salary) professional jobs (such as pharmacist, teacher, professional in a government agency, engineer) are in the the “high income” bracket disqualifying them from aid for even the most expensive colleges. Others have chosen to have one parent stay home while they have kids at home. Does this choice qualify them for aid?”</p>
<p>Precisely, what both are saying here. I should have left out the BMW part but it is a true story I heard from a social worker at work lamenting about her D’s roommate at college. </p>
<p>CountingDown- I would think that you would have a special circumstance, with documention naturally. But as you said your health and cost to college and taxes taken out is not worth it.</p>
<p>“If one family makes $60,000 between two earners, the EFC will be lower than if one earner earns all of the income $60,000.”</p>
<p>I am purely guessing. The reasoning may be that they think with only one parent working, the expense is lower: no childcare, less commuting, less working clothes (except for high tech industry where you get less free t-shirt), more home cooking etc.</p>
<p>FWIW, I put in some made up numbers into an online financial aid calculator, selecting the Institutional Methodology. I kept everything the same except in one case, one parent earned $90,000 and the other zero, while in the other case, each earned $45,000. The EFC for the parents for the first case was $10,885 and in the second, $9380. In both cases, the student was expected to contribute $1000. Interesting.</p>
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Then writing the check for your daughter’s first year tuition should not be a problem. </p>
<p>Here’s a tip that will get you a discount that only the well-off can get: many colleges offer a pre-pay option that will let you pay all 4 years’ tuition in advance at whatever level the tuition is the year you came in. That way, you don’t have to worry about tuition increases over the years – you just write one check and you are done with it.</p>
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The FAFSA formula remains the same, but the FAFSA takes into account FICA deductions from earned income and also income taxes paid. Two $60K salaries have more FICA taken out than one $120K salary, so there is less income left over to plug into the FAFSA formula. </p>
<p>There is also an employment expense allowance, as follows:
So basically, two working parents get a $3200 write off from income that isn’t available with only one parent working.</p>
<p>The $3200 may be an acknowledgement that two working parents also have additional expenses. Both need work clothes; both probably have commuting costs that the stay-at-home parent doesn’t incur.</p>
<p>janesmom –
We had not planned to tell the FA folks, as our medical expenses are substantial, but not backbreaking. Another good reason to live below one’s means whenever possible – my illness hasn’t put us into bankruptcy. Oh well. Home equity! Life insurance!</p>
<p>On the other hand, we are blessed with great medical insurance coverage. If prescription coverage for “specialty drugs” ever goes belly-up or starts charging us even 25% of cost, we will be in BIG trouble. We’d have no choice but to talk to FA, as my main medication costs (per year) as much as a year of private college!</p>
<p>Laserbrother – Keeping that much cash in a checking account which gets you little, if any interest, is poor financial planning. There are better, and safe, ways to invest that $$ without subjecting it to the vagaries of the stock market. Even a mutual fund money market account (with checkwriting option) will get you more than your local bank will offer and is easily available. Very few people need ready access to that much cash. Two months of expenses, tops. </p>
<p>P.S. You <em>should</em> be investing your 401(k) in higher-risk instruments than you would invest money that’s intended to be more liquid. You have to beat inflation plus the taxes you’ll pay on 401(k) funds at retirement.</p>
<p>I do find it ironic that someone is bemoaning the unfairness of a system that will allow nonsavers to qualify for a few more dollars in financial aid, when the person could easily acquire much more money simply by making better investment decisions. </p>
<p>I think Laserbrother should look into the tax advantages that might accrue to him if he moved $100K into a 529 account for his daughter and invested it well in safe instruments (bonds, etc.). That’s a lot of money that could be accrued tax free over the next year or so while his daughter completes high school, and depending on what state he lives in, it might also offer a state tax writeoff. He sounds to me like wealthy person with a poor person’s mindset – he is not using the money he has to his advantage.</p>
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<p>I am sorry to hear about your illness.</p>
<p>You should definitely let the FA office know about the medical expenses because this is one of the areas where they will use professional judgement and amend your aid package (or even throw a few $$ your way).</p>
<p>OMG, what do we have here. How come there isn’t one person that could think positively for a moment for me? </p>
<p>When did I ever say that we could have any financial problem “writing the check for your daughter’s first year tuition”?
How do you know that “Keeping that much cash in a checking account which gets you little”?
Why do I want to put a penny in 529 or whatever if my D could get a full ride?</p>
<p>Because every penny we have is hard earned and saved, we would rather not pay any extra more than we should. If we could spend the money on other things and let a university pick up a higher % of cost, we would do it.</p>
<p>One of the $2000 accounts we set up when DD was born has grown to over $14,000. We cashed that one out for all her trips and expenses. </p>
<p>I accumulated about 3500 shares of GE during my 7 years employment there and sold in Jan at around $38.00 because we think the market will go into correction. It did and our $150,000 is making 5.43% APY in the GE interest checking. Our plan is spend every single red penny of that by December 2007, including put max into our Roth IRA, HE, and those items I said earlier. </p>
<p>What, just because I am a poor immigrant that I know nothing about managing money?</p>
<p>laserbrother-spend it all! If you have an expensive medical emergency, job loss, all the problems others here have dealt with, oh well. Notice that although others are clear that, yes, this can be unfair, or even just feel unfair, no one at all thinks your plan shows any merit.
If you carefully read here you will see that very few kids get a free ride, but what the heck. She can go to community college. She’ll thank you for the life experience one day.
While you’re off planning this adventure, at least get a decent violin. $2000 is not going to buy one by a long shot.</p>
<p>laserbrother, you are definitely NOT a poor immigrant, you are a well off immigrant. For goodness sake’s stop complaining. You saved money to pay for your kid’s college, now you will do just that. What did you think? That your extreme saving practices will be rewarded by zero tuition? What was the point of all that scrimping and saving then?</p>
<p>LB- pay off your mortgage with all that $, at least then you could access the funds through a HELOC if need be. Also, compile your application list carefully…with an income over $120k you will still have to come up with some EFC $, even if you haad no assets.</p>
<p>Better yet, run the FAFSA numbers and see where you land:</p>
<p><a href=“http://www.ifap.ed.gov/efcinformation/attachments/0607EFCFormulaGuideDecFinal.pdf[/url]”>http://www.ifap.ed.gov/efcinformation/attachments/0607EFCFormulaGuideDecFinal.pdf</a></p>
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<p>As if other people’s money is not hard-earned. Why should universities pick up the cost of educating the children of people who can very well afford to pay full fare?</p>
<p>I was a poor immigrant, my money was hard earned, I saved, and happily pay two full fares.</p>
<p>Here’s another tactic that appears to have worked for us without our knowing it: allow, or even encourage, your child to apply to schools far away, or not as well known, or that are lacking in current students from your area of the country or with some characteristic or talent your child possesses. We have recently been stunned to find my son has received an offer of $20,000 a year in merit money to attend a college that would be great for him, but which most CC’ers probably never heard of. He is a bright young man with decent test scores but not-great GPA, and is ready to become part of a school where he may be one of only 2 students from our state, because they want him so badly they are offering him extraordinary aid and treating him like a prince. They are helping him feel right at home.</p>
<p>We have saved heavily since our children were each 2 weeks old, when I began having money for US Savings Bonds for them withheld from my paychecks. We have always funded their “college accounts” regularly, and feel blessed to be in a situation where we can afford to pay for their undergraduate educations. I am humbled and pleased to be able to offer this gift to my children. But because we encouraged our son to look far afield, he was rewarded with an offer we never expected. </p>
<p>Our kid may be “able to go to school for next to nothing”, because we didn’t look for prestige and we encouraged him to look with open eyes. I offer this as another strategy for those who are feeling it is unfair that they are asked to pay for their children’s college costs. Opportunities abound if you are willing to look for and accept them.</p>
<p>Having grown up poor, I take great joy in writing the tuition checks.</p>
<p>LB, you obviously are totally ignorant about how the financial aid system works. If you think that spending your money down is going to get you a “full ride” for your daughter…then you obviously don’t know the first thing about how it works. You’d need to quit your job, too, because it is your income that disqualifies your daughter from need based aid. Paying off your mortgage won’t help – the private colleges all look your home equity. There aren’t many colleges that guarantee to meet the FAFSA EFC of all of its students – all the private colleges ask for CSS Profile and they want to know the value of retirement assets as well as home equity and just about everywhere else you could think to hide your money. My daughter’s FAFSA EFC last year was less than $6000, but she had an award in a college that purportedly meets full need of all its applicants that would have required us to pay around $25K.</p>
<p>Or are you planning to insist that your daughter apply to a college that will give her a full ride for merit aid?
I can’t decide whether those are merely the words of a fool or the ravings of a lunatic. It will be interesting to see how you explain to your daughter that she can’t go to her first choice college because you can’t swing the payments, while you are driving around in that $60K Mercedes.</p>