My father just lost his job, and I don't know what to do

<p>My father just lost his job in the past couple of weeks (you know budget cuts, downsizing type layoffs, I guess it's pretty common in the current economy) but my tuition bill is due soon (middle of August). My financial aid package was not bad, but my EFC was 34,000. At this point, that number just seems plain ridiculous as my family no longer has an income, my father is already close enough to retirement age that it's difficult for him to find jobs, and I have a younger sister who will be attending college in less than 2 years. I don't know what to do. I want to appeal my aid package, but I don't know how effective it will be and how soon I will be able to receive additional financial aid if any. Should I sit here and wait for my appeal to go through (though I haven't the slightest idea how to even begin my appeal letter), or take out what I owe for the first semester (about 17K) in private student loans? I already have exhausted my government loan options.</p>

<p>What have your parents said? How were they planning to fund your education? I could not allow my kids to even consider taking $22K in loans for one year. If I were in this position and didn't have a significant amount saved, I would advise them to wait and change their college plans instead.</p>

<p>A 34000 EFC is pretty high, have you spoken to your folks about your concerns ? Perhaps they have already put money away for your tuition.</p>

<p>Call your university and see if you can get deferred for a semester/ year whatever your family needs to get their finances sorted out.
Giving your parents a semester or 2 to figure out how to pay for college for you and your sister may be the most prudent course of action.
Your parents may be in shock about the job loss and may not be able to cope with a 34K tuition bill.
Apply to your local cc as a Plan B.</p>

<p>You can contact your school's financial aid office and ask what to do about this situation. They will tell you whether they can or will reconsider your financial aid award. Somethings to consider...you will be asking for a special circumstances consideration due to your parent's lost job. First...remember that your financial aid was based on the info from last year. Did your dad receive a severence package or accrued sick/vacation time pay upon losing his job? This will be considered by the college. Also some schools won't do a consideration for job loss for a period of time AFTER the job loss as there is the possibility that your dad WILL get a job. </p>

<p>For a special circumstances consideration, you will need your dad's pink slip or letter of termination. You will need to verify his reduced income (will he get unemployment??). You will need to provide firm documentation of the new family financial situation (if your mom works, her info will still be used of course you know that).</p>

<p>Remember that special circumstance considerations are done at the discretion of the college...some do them and some don't. </p>

<p>Call them and ask...sadly I'm sure you won't be the only one making such a call. I'm sure they will tell you what their procedure is.</p>

<p>Good luck to you.</p>

<p>Thank you for all the helpful responses. I have called my college and started collecting all the documentation needed for my appeal, but unfortunately since my classes begin in about 2 weeks, I am not able to defer for a semester, or change my plans without losing all of my deposits (at this point, that is a significant amount...over 1000). I may still have to take out that 17K private loan for the time being, because my family does not have any money saved for college education (we still have mortgages and many loans to pay off). Any advice on the loan?</p>

<p>Unfortunately, losing $1K may make much more sense than borrowing what looks like over $22k for one year of college. If you're not expecting your dad to be back at work soon your current college will probably not be affordable for 4 years based on the Plus loan as part of the package. A gap year to figure out an affordable option and then 4 years there would probably be a nicer route than having to start applying to transfer schools the fall of freshmen year and leaving new friends.</p>

<p>I agree with Redroses and others. You know that it's going to be a rough go this year, and possibly forevermore for your parents financially. You've already taken more loans than would be recommended for undergrads.</p>

<p>You have let the college know the situation and hopefully financial aid is able to help you. But if the help is more loans, it isn't a smart move to make, given your family's financial situation. They may be able to return your deposits, given the circumstance. But the interest for $22K is going to come up to be more than that, plus you need to repay the principal, plus the interest continues to accrue. $1000 is a cheap price to get out of that hole.</p>

<p>It sounds like your saying your family planned to pay the 34k EFC out of current income and loans? That can be hard even WITH a good job. I think a plan b school would be really good to look into. I agree that $1000 is a relatively small amount for a family expecting to come up with that EFC from current income and loans, but only your parents can know if that is true for them.</p>

<p>Also, it seems like the responses students get from parents regarding loans for college is very frustrating, so apologies in advance.</p>

<p>???</p>

<p>If your parents didn't have any money saved for college, HOW were they going to come up with their $34k EFC if your dad didn't lose his job?</p>

<p>Will your dad be given a severance? If so, that could hurt your chances for more aid. </p>

<p>it sounds like you do need to sacrifice that $1000. Borrowing $22k is waaay too much for one school year...especially for freshman year! And, you will have fed loans on top of that!</p>

<p>Besides, you would need a co-signer for such a loan. With your dad now unemployed, your parents probably couldn't co-sign anyway.</p>

<p>I still don't understand how your parents were going to pay their EFC (which would be due VERY SOON) if your dad hadn't lost his job?</p>

<p>You've already have stated that it is unlikely that your dad will find another job soon, and that you have a younger sister that will be in college in a couple of years.</p>

<p>Sadly, the solution is not one that you will like to hear.</p>

<p>Since it is unlikely that your family will soon rebound from this financial setback, you need to proceed as if your family's income will be low for awhile. That means going to a cheaper school.</p>

<p>I don't know if you are going to find anyone that will lend a student $17K. If you look through the CC archives, you'll see many threads from students looking for someone/anyone that will lend them money for school because their parents won't or can't take out the loans. Even private lenders want a co signer for these loans is what I have seen, unless the college itself lends you the money from their own coffers. </p>

<p>If your EFC is $34K,you are going to have to borrow another $17K for the second semester, aren't you? That makes your loan amount astronomical for freshman year. And from the way you are positioning your family situation, it does not look like your parents will be able to afford to pay for your college. </p>

<p>If your college cannot give you a substantial amount of that $34K shortfall you now have in the form of grants, it might be wise for you to take a leave this year, and see what your EFC will be next year with your father being out of work. Or he may find something by then. </p>

<p>Does your school tend to meet close to full need? Have they met your full need? If it does not look good for getting enough money to make this college affordable, you may want to look at other options.</p>

<p>I have known families who have lost their jobs or had some other disaster affect the financial picture during the summer before school starts. The OP's father may well have some assets stashed away for college or plans to borrow from HELOC or 401K plan as well as from current income to pay for college. The problem is that without the job, paying out that whopping $34K is not a smart financial move as it is more needed as a cushion while the father looks for other work, and the family makes some decision about how they are going to live on diminished means. A $34K college bill probably does not figure in that budget. Also borrowing money for the student's college is not a good move when household bills are going to be tough to pay.</p>

<p>juicebox8: Something doesn't add up well here. The EFC was 34K. Yet the father has ZERO saved up in a college fund for his children, thus was going to pay $3,000 a month EVERY month for at least four years? For a total of $132,000--for just ONE child? And he is about to retire, yet has other outstanding loans and has not even paid off the mortgage on his primary home?</p>

<p>I think what is not adding up is that your father, even when he was still gainfully employed, can <em>not</em> afford to send you to a college that costs 34K a year in cash or parental loans!</p>

<p>It sounds like a case of a family going through the motions of having their bright child apply to dream colleges with 50K a year COA, crossing fingers that a amazing financial aid package comes through, and when faced with an UNWORKABLE bill instead (34K is unworkable for your family), went ahead and said "yes" to the offer of admission anyways.</p>

<p>That your father lost his job wasn't the initial crisis. Though it may be the one that knocks some sense into your family.</p>

<p>Just because your father was willing to squeeze out 34K in cash every year doesn't mean he really had that kind of leeway in his finances... he could loose his home, retirement fund, etc, from overextending himself. It is just a terrible fluke that he lost his job... but make no mistake, he couldn't sensibly afford it before or after that event.</p>

<p>Take the 1K loss, work on a gap year instead. Read lots of books on smart finances. It will put you ahead of the game of life in terms of finances and making smart choices on college debt. If just getting started, I always liked "The Millionaire Next Door." Susy Orman is also a good read. Then graduate up into more involved books.</p>

<p>I don't know, Annika. We would have to put some brakes on spending, and college costs are the big ticket line items, if my H lost his job. We take past, present and future income in paying for our kids' college. The past is in the form of savings that now would be more immediately needed for living. The present...well, that would be replaced by unemployment which would be far less . As for future, which are loans, who the heck will be taking out loans when unemployed? The OP's dad may have been thinking of splitting that $34K into those three categories, either equally or with certain amount in each section. The loss of the job would have stopped that process.</p>

<p>I still think it's odd that a family in such a precarious situation (no savings for college, debt) would have agreed to a $34k family contribution. </p>

<p>The dad JUST lost his job, yet they have no money available for the EFC that's due in days??? </p>

<p>What were they going to use for that if the dad hadn't lost his job?</p>

<p>I agree with Annika, even if the dad hadn't lost his job, this was likely an undo-able situation.</p>

<p>Why would anyone think that they could pay out $3k per month for college for 4 years, yet not have been able to say anything for college over the last 18 years?</p>

<p>Either way, this student needs to go to a less expensive school. Maybe a community college or state school where he/she could commute.</p>

<p>Hi, thank you for all the responses. My parents were expecting to take out loans from our home equity line, borrow from retirement money, and other various sources that they never made clear to me. The thing is, they basically saw that it would cost me about 30K to attend a UC, but preferred a private college because of budget cuts, more limited resources, etc. They looked at the 34K and decided that the extra 4000 was worth it to them. It's very important to them that I attend a four year university and follow through with this. And just for the record, we thought the EFC was a bit high as well, my father's salary definitely was not amazing, at least for a family of 4. Honestly, I really have no idea what my parents were planning to do to pay for college, but I know that they are planning to sell our house immediately after my sister graduates. The value of our house may be the main reason why our EFC is so high...we live in what is considered one of the top school districts in California and is a rather affluent area (though we do still owe money on the house, as I mentioned before). To Annika, I know it sounds crazy, but my parents would never let me attend community college and didn't even allow me to apply to CSUs. I believe it's mostly a cultural thing, but "prestige" is huge for them. My parents would rather work themselves to death sending me to the "highest ranked" school than see me go to community college, especially because all the other families in our area are mostly well-off enough to pay for their kids' full private college tuitions. And as for the loan for the first semester, I was wondering if I should just take it out for the first semester while I wait for my appeal to process? My school is USC, I feel like they usually have a good reputation for meeting need?</p>

<p>juicebox, The value of your primary residence isn't calculated into EFC at all. The <em>equity</em> in it (the value- the debt) is considered by schools that use the CSS Profile. It is not considered at all in the federal FAFSA. </p>

<p>In other words, for financial aid purposes, it doesn't help any to sell the house. For families eligible for federal grants, it can hurt by making the $ in a protected asset available. For families like yours, who aren't eligible for federal need-based aid, it doesn't matter if the $ is invested in a house or sitting in the bank, the College Profile will consider it an asset. There were a few Profile schools a few years back that agreed to cap primary house asset but I don't know if they stuck to that after the downfall. You would have to ask USC how they handle it. </p>

<p>The loan amounts you are talking about are unrealistic. I think you need another plan.</p>

<p>Given the circumstances, USC education is a luxury; unless USC financial aid office can quickly assure you of any scholarships / grants that need not be paid back, it is strongly suggested that you cut your losses ($1000) now. See if they can defer your admission for another year. In the meantime, your best bet is to investigate a few well known community colleges (CC) that are within short commuting distance from your home so as to slash any lodging / boarding expenses. Usually these CCs act as feeder institutions for various public universities in the UC system. Hopefully you can find a spot for the upcoming year & enroll. During the first 1 or 2 years, students normally take basic courses required for their intended major. Community college may be the (financially) smart alternative. </p>

<p>People in certain communities place enormous value on prestige associated with educational institutions. Hopefully when the dust settles, you can enroll at USC or other equally well known university at a future date. For now, your efforts should be focused on obtaining core required college courses at the least possible cost. </p>

<p>Your parents will be faced with trying to meet house mortgage payments; Dad will be scrambling to find a job. He may find one at a different city. These are trying circumstances for the family. It is not smart to be trapped in debt, especially when you are just starting your higher education. </p>

<p>Wish you & your family all the best in meeting these challenges.</p>

<p>Ouch.
If your parents had not saved a dime and planned ahead for college tuition payments, this was an accident waiting to happen, even with an income stream. There are several posters on this thread who are very knowledgeable about the ins and outs of the FAFSA. If your EFC was 34K, there must have been moneys available to the family that factors into the calculation. However, that is currently a moot point. Will your dad be getting a severence package? Unemployment? As a separate issue, will he be able to COBRA the family health insurance? Does your mom work?</p>

<p>I agree with those who said your first contact should be the schools FA office (which you have done) to get an emergency appeal in process. Do you have any wealthy grandparents who might be willing to be very generous and help with payment for one semester while you sort all this out?</p>

<p>My H worked for a small start-up company that started up at the wrong time, and he and others were laid off with a very very modest severence package. This happened while younger s was in his first year of college and we were in the middle of a very big house remodel. It wasn't fun, BUT we had saved and budgeted ahead for both the remodel and son's college (and son had a nice merit scholarship) so we were able to live on his unemployment and my income. If there is no financial cushion for these kind of rainy day emergencies, and your family is already mired with loans/debt and now no income stream (again- does mom work??), sadly I do not believe in todays economy there is much chance that someone will loan you/them any money-- and that includes a HELOC (home equity line of credit) loan. I am so sorry you are in this situation. Hopefully USC can help you quickly. If not, and if you dont have a generous benefactor, I think, sadly, you might need to be thinking of a plan B for school. Good luck.</p>

<p>Won't it be nearly impossible to get a HELOC now that the father is unemployed? Even folks with good credit and a steady job are getting turned down for basic mortgages.</p>

<p>I do find it odd that it is less than 20 days away until the first day of USC classes and the parents had not completed a HELOC loan yet (and now it may be too late). Raiding a retirement fund is usually a double-wammy financially: the parent is draining a resource that can not be easily filled up again AND will likely face huge penalties for early withdrawal depending on the fund (so it is money down the drain).</p>

<p>Again, something sounds really financially unstable here on the part of the parents. I guess the only thing I can say to the OP is that even grown-up adults with long careers, a big house, and the likes can spend their way into absolute bankruptcy and poverty if they over-extend themselves. You are 18 now--you have some say in how this all plays out. You do have a choice in refusing to drain your parents of 130K out of their retirement fund. Some gifts should be refused.</p>

<p>In any case, I don't think it will be possible to borrow 34K on the fly. And even if possible, I think most would advise against it.</p>

<p>Pride vs. financial realities. I recommend struggling with this now vs. having your family's finances take an even bigger collapse later from over-extending.</p>