@thumper1 So with NU being 66K a year, the average award is 30K, 25K in need based gift, 5K in need based loan. Did the OP ever post his EFC based on salary? Is it 10K which would mean the school would give 50K in need based gift?
I do hope it all works out for this poster. And if the student has to take a gap year for financial reasons, I hope his list next year is a very well balanced one. He sounds like a very bright kiddo…and perhaps merit aid would have come his way…though not at NU or the Ivies.
@mom2collegekids Well that’s amazing. So maybe the OP is correct in wanting to use the assets. If he was going to be gifted 50k if he didn’t have it.
Gearmom…the family could possibly get more need based grant money to replace the money in their family contribution from the annuity asset.
BUT…the amount the parent will be expected to pay could very well remain the same.
So, yes…the student could receive more grant money if the asset was gone…but the father will still have to pay the amount based on his income. It sounds like that is in the $10,000 a year range or more. So the question remains…can the father pay his net cost?
Why is there a “could possibly” for receiving more grant money if NU meet full need? Was his financial situation a factor for admittance? If I were the parent, I would feel that we are wasting money if they meet full need. If 20% of the student’s assets are expected, then of the 40k with a 100k annuity wouldn’t the EFC be 20k base? If the student choose to pay some family debts with the annuity say 60K and paid 40K for the first year, would he be penalized the next year? If the parent can then pay the EFC, shouldn’t they get rid of the money? What would you do?
NU meets full need. The question right now is whether the asset was already reported to NU in the estimated PROFILE completed as a student asset, and how NU assesses student assets. It’s at least a 20% direct hit. Don’t know if that number can be changed when the FAFSA is filed and when the PROFILE is updated. All of that depends upon how NU does their financial aid. As a general rule, assets remain as they are reported on day the forms are submitted, but how this plays with an ED estimated PROFILE is totally up to NU.
So OP has an estimated package. Whether it can be revaluated with the assets changed is a question that only NU can answer.
Gearmom. I’m going to try one more time.
If the asset is eliminated, the amount in the family contribution for that asset will likely be replaced with grant money. Since we don’t know the package…it’s possible it is possible some of it could be replaced with work study. We don’t know. But yes…the amount from the asset would be provided in the form of need based aid by NU…they meet full need.
BUT. If part of the family contribution…say $10,000 or so…is from parent income…that isn’t going to go away when the asset disappears. The income will still generate a portion of the family contribution. And likely, that won’t change at NU.
So…out of his pocket (not the annuity), if the father is expected to contribute $10,000 this year…PLUS the amount of the money from the annuity…then without the annuity it would still be that $10,000…plus any need based aid replacing the annuity.
But the dad will still need to pay the $10,000. Can he do that?
If the dad cannot pay the amount even if the annuity is removed, then it’s all a moot point.
@cptofthehouse If the student attends school the first year and uses all of his money that year for school and to pay off debts, does he go in asset free the second year from the point of aid?
At most schools, yes. But there are some schools that will take that first year of student assets and use it as a base point and continue it for future years. University of Chicago used to do this. They do it because families get wise and see that they got a 20-30% hit on student assets and they will disappear for the subsequent year. So the college will take that student asset and make it a minimum with some adjustment for all four years. I do not know how NU handles a student asset reported freshman year in future years. The NPCs will not show this either.
Schools can do what they want with their own money and formulas.
@thumper1 No, of course his 10k or 20k is not going away. I think more than one parent has put assets in a student’s name and then later wished they hadn’t. We did that but we just left it not having the OP’s sad situation. So if you make this mistake, it is sounding as though you might be able remove at least a sizable portion and for the second year have your need met at a school like NU. All this assumes that you can pay the assets free EFC.
It doesn’t sound like the dad will have an issue paying the $10k per year if the debt goes away. He’s probably spending that much NOW towards those debts and raising his child. So, I doubt that’s an issue. Even if it were a slight issue, the son could probably be thrifty and/or work more during summers to help further reduce COA.
@mom2collegekids Well, hopefully the son can start next year if the father can afford Year 2,3 and 4 EFC. Just seems more risky to take a gap year. Sometime you do have to pay a parent’s medical bills, my husband did that when he was 18, so maybe he can use the rest of the money for that to help his family.
Now the dad is asking about Ivy-after-gap-year!