No liquid cash

happymomof1
Wed, 24 Jan 2018 19:16:34 +0000

@matawandad

<did you="" include="" an="" expected="" increase="" in="" costs="" of="" about="" 5-7%="" each="" year="" she="" is="" college?="">

Historically, college tuition and fees have increased about 5-7% each year. Some institutions have increased more rapidly than others. You need to account for that inflation in your budgeting, or you can end up in an ugly situation by senior year.

Colleges and universities do not care how much you have in savings. Institutions that are need-sensitive for admissions might care what their formula says you can afford to pay. For example at a need-sensitive institution, if they like your daughter just as much as they like another applicant who will require less aid, then your daughter will get the No letter and the cheaper student will get the Yes. Most institutions around the country are need-blind for admission and let the students who are admitted worry about whether or not the aid package was any good.

You are in a challenging situation, as you have an EFC of 30k, but evidently don’t have the flexibility in your budget to pay anything like that out of current income or savings. Since you are expecting to raise 20k each year based on home equity, a visit with your banker is in order. Find out whether or not that really is possible. And again, I have to ask, if you think you can pay down those loans some day, why can’t you pay anything out of pocket now?