The large Ivy has offered a $10,000 loan over four years. Work study $2500. Student contribution $2800. Parent contribution $6500. D will be a bio major with plans to go onto a MD/PhD program and this school has a great biological sciences department.
LAC 1 is an all-women’s school outside of Boston. Offered $7200 loan over four years. Work study $2100. Student contribution $2100. Parent contribution $6200.
LAC 2 is a coed school in upstate NY near Utica. They have offered a package with no-loans, no work study, and no student contribution. Parent contribution is $6800.
D is leaning toward the Ivy but also dearly loves LAC 1. She applied to LAC 2 as a safety and thought she would go there if nothing else came along. We, her parents, are struggling with the idea of taking a HELOC to pay our portion. It is doable, but we live a very modest lifestyle and we are a family of 5.
Since this is all new to us, just wondering what those of you with experience would say at first blush? Is D crazy if she turns down LAC 2 or is the Ivy offer reasonable for a lower income family? Ivy and LAC 1 are in the appeal process right now, but I can’t imagine they will forgive work study and/or the student contribution. Also, because Ivies only match Ivies, we are not expecting a change in the aid award from them. We are just over the threshold of no loans for the Ivy by $3000.
Would appreciate any guidance. We realize we are very fortunate with all three of these aid packages, but want to make the best decision for all, financially and academically. :-/
What do you mean by a $10k loan “over four years”? Is it 10k per year, or 10k total?
As for the rest of the package at the Ivy or LAC 1, the student summer earnings and work study expectations are both manageable.
That leaves your parent contribution . . .
At LAC 2, your daughter would be able to cover the entire parent contribution with a small student loan and summer earnings.
At the Ivy and LAC 1, if, in fact, those loan figures you provided are your daughter’s total loan amounts over all four years, then she can also cover a large portion of your parent contribution with a student loan. Her first year, she’d be eligible to borrow up to $5,500, and that number increases in subsequent years.
Alternatively, she may also be able to pay part of your cost from her own earnings, despite having her own student contribution to satisfy. If she can find a summer job that she’d be able to return to during Christmas and Spring breaks, she’d be able to earn enough extra to pay part of the parent contribution. And if she can find a job that pays more than minimum wage, she may actually be able to make a sizable contribution to your portion of the cost.
What are the job prospects for her where you live? How much could she reasonably expect to earn? If jobs are scarce, or minimum wage is likely the best she’d be able to come up with, then she’d have to borrow more. If she can find a good job, then she could borrow less.
Figure out a parent contribution that you’d be comfortable with. Talk to her about that, and see if she’d be willing to undertake to pay a portion of the parent contribution for you if she attends the Ivy or LAC 1.
When does the next kid enter college? Will there be some overlap?
The loan at the Ivy is $10,000 total.
The job market here is tight. She can get a job at our local community center for min wage, but it cannot exceed 28 hours per week in the summer (their rules).
Next kid enters college when she is a senior. So only one year overlap and no overlap at all with kid 3.
So are you thinking that she should accept LAC 2? She is just concerned that she is missing out on something at the Ivy or even LAC 1. We can handle our portion, just don’t know if when offered what LAC 2 is offering if it is a no-brainer or not? We are not sure if she will have the same access to research opportunities.
So $2500/year x 4 years = loan?
It’s your money, but at that bargain price I’d pick the Ivy.
No, I’m thinking she can attend either the Ivy or LAC 1 and still pay a portion of your cost. (I just edited my post - go back and take another look. 
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LAC 2 definitely isn’t a no-brainer if she really prefers the Ivy and is willing to take out a larger loan to help pay for it. Figure out her max summer earnings, compare that with what she needs to cover her student contribution. If she can’t earn enough to cover the student contribution, then she can increase her loan.
And I still think she can pay a portion of your cost, as well, but that’s your decision.
Also, can you contact the Ivy to discuss the other offers/ask for more aid?
LAC 1 is obviously even more affordable than the Ivy, but the loan amounts at both the Ivy and LAC 1 are quite low. The maximum direct loan amount she’d be eligible for as an undergrad is $27k, so she’s way below that at either school!
@Madison85 - the OP has already appealed her daughter’s offers at both the Ivy and LAC 1.
^^Oh-I must have missed that!
Thanks for your input! She is definitely willing to help pay a portion of our cost, either with her earnings or by upping her loan amount. I think more fixed rate student loan is probably better than using a variable rate HELOC that reduces our equity. Do you have an opinion on HELOCs? Do many people use them to pay parent portion or should that be a last resort?
Let her go where she wants. It seems like she is choosing between Wellesley and the Ivy where she has received extremely generous financial aid packages.
There are multiple ways that she can handle this:
The student contribution from summer earnings is for your daughter to cover things like travel and misc. start-up cost. even if she got a job paying $8/hour she will make ~1800 for 8 weeks. If she gets the part time job now, she will have more time to work toward earning her student contribution.
If your EFC Is $6500 and your daughter is given a $2500 loan (most likely subsidized), she can borrow an additional $1000 subsidized and 2000 unsubsidized, which will reduce your portion of the EFC to $3500.
Out of this $3500, it will be split into $1750 per semester. If you can pay the $750 upfront (even now and let them credit your account), you can request a payment plan of $200/month for august to december and then do the same thing for the second semester starting January. Any monies that you can pay now will reduce your overall cost later.
D can also get an on campus work study job to help defray some of her cost, adding a couple of $ out of each paycheck to help chip away at her bill.
I don’t think that you should take the HELOC because you are really looking at trying to free up an additional $50/week for your daughter to go to college
I think she can pick the Ivy or LAC1, whichever is her preference. You have said you are ok with your portion. She will be able to come up with her portion. The two are not significant enough in price difference to pick one or the other on that basis. Also well endowed schools have a lot of freebies when you are there. My kid got paid well for some of her work/study jobs too at her Ivy. A lot of free entertainment of all kinds from music to lectures and food included at many events. Also she did move off campus Jr year and saved even more on cheaper housing and an off campus meal plan and having more meals at home. Still was only a couple blocks from campus and around the corner from some dorms. She will figure out how to make it work. But the LAC you usually stay on campus. The community is smaller and they need everyone. I’m sure she will get plenty of research work at a selective LAC, they are known to prepare students well for grad school. It just depends on her own preference.
If D is on a PhD track then D’s income will be very low and repayment will be tough. However, I would put as much loan burden on D as possible. Skin the game affects investors feelings.
I don’t agree with that philosophy. High performing hs students who get into top schools are generally already proven self motivators. Also I don’t believe that loan burden is particularly meaningful for most teens, if you read this forum enough you will see that it is funny money even to the most intelligent ones 90% of the time. And the ones that do get it would be worried and stressed and I don’t think that is a good situation to put students in, it does not compliment a mindset of growth, exploration and risk taking which is what stage they should be in.
Good point Brownparent. Lemontwist will need to evaluate their individual situation. Back in the day, a grad student stipend covered rent, food and minor recreation. Myundergrad loans were deferred and paid back by the time I reached age 35. I agree with you about funny money, but I was part of the 10%.
Wow, you are getting 4-year aid guarantees from schools? I didn’t know they were doing that …
I’m confused. What is the net cost for the family for these three choices?
Is it $9300 for,the Ivy?
$8300 for LAC 1
$6800 for LAC 2
Can your daughter earn the amount to make up the difference between these schools…the Ivy is $1000 more than LAC 1 and $2500 more than LAC 2.
Am I missing some amount the family will be paying in addition to these numbers?
Also, agree with Kelsmom. Need based financial aid is awarded annually, not for four years.
For those numbers I’d let her go where she wanted.
Have her apply to some outside scholarships. Anything she wins may reduce the self help portion including loans and work study.
You could take the work study off the table in the sense that it will probably end up being her spending money, and furthermore she may or may not actually earn that amount. Looking at the sum of loans, parental contribution and student contribution will tell you how much the school expects from your family. At a cursory glance it looked like only a $1,000 difference in student and family contributions and $600 difference in loans per year. In which case LAC1 is less expensive…but only by $1,600 a year, in case the Ivy is so appealing to her that she wants to go for it and take out more loans. Don’t get me wrong, for our family even $1,600 is a lot of money, but then again, in the bigger picture, you want her to thrive.
You mention a sibling entering college. Remember that your D is signing on for 4 years! Be sure to run a net price calc with your same financial info – however, this time around, add her sibling to reflect “2” in college. You may be surprised! Schools are different in this regard so you should check it out before settling on the final financial picture. We have a S who will have a sibling in college for his first year, but none after that…and when it occurred to me to look at his possible aid for all four year, I re-ran the net price calcs, finding that the numbers changed significantly.