Did you folks not do ANY saving?

[Anonymous]

Anonymous wrote:Here is the answer to your question, OP.

Our combined household income is near 200K, but this is a recent development since I finished a degree. Prior, between reduced job hours and paying tuition, we made under 150. My husband's job is tenured, and mine is not. I see no reason to assume that I will always be employed when my child attends college. My husband's job, if it is our only income, would get us close to a free ride in a top private college since we have two children. I make less after taxes than the HYPSM tuition, so if a child gets into a top school, my salary will add absolutely nothing to the table. My salary is 90K, but remove taxes and do your math.

We never saved a penny for college, instead paying down our mortgage and our rental property mortgage instead. Older child is an excellent student, and may opt to convert her smarts into a free ride in college. If she gets into a tippy top private college with minimal financial aid, we'll open a line of credit from the house and borrow cheaply. If I lose my job or something else arises, we'll get financial aid. Whatever happens, I recommend that the child ONLY applies to colleges that commit to meet the financial aid requirements with grants, not loans.

Why would I EVER want to open a 529 account committing us to paying college tuition when so many factors can change overnight? I view 529 accounts as a option once all other reasonable investment avenues have been exhausted. Prepayment of UMD tuition is more sensible, honestly.

The 4 years my older child is in college may be great for going back to school myself for a PhD (reduce our income / expected family contribution), or perhaps joining a volunteer overseas organization as a resume builder / income reducer. Worst case scenario, the child knows that we'll pay the equivalent of UMD tuition, and she takes out loans for the rest. Two years in consulting of some kind, while living with a roommate and us paying for her utilities and food, and she'll pay it off.

Have you read what you posted? You are screaming poverty and yet own two houses and your priority is paying off your mortgages? I feel bad for your kids.

[Anonymous]

Can someone explain what this comment means:

Anonymous wrote:I”m seeing a lot of threads and responses within threads. Lots of [...] people frustrated about the unfair advantage of ED because you want know the full amount of merit aid that might be available [...]

ED, I'm guessing, does not refer to erectile dysfunction, but the early admission/decision some colleges offer in the fall rather than the spring, correct? What is the "unfair advantage of ED" that prevents you from knowing the "full amount of merit aid that might available"?

[Anonymous]

Anonymous wrote:In-State colleges in general are the best deals for most people and many are notoriously stingy with aid other than loans.

Naive question: what does "aid other than loans" mean, or specifically, what does "loans" here mean? Do In-state college have their own loan programs to which they offer access for admitted students, or is the poster referring to the fact that these colleges ask families to make up the difference between the COA and their EFC by taking out the usual loans (unsub/sub federal loans, PLUS loans, etc.)?
If the latter, why do people refer to loans as a form of financial aid at all? (And why do colleges even include it? Is this like a sign in a convenience store that says: cash only, ATM is around the corner?)

[Anonymous]

Anonymous wrote:Can someone explain what this comment means:

Anonymous wrote:I”m seeing a lot of threads and responses within threads. Lots of [...] people frustrated about the unfair advantage of ED because you want know the full amount of merit aid that might be available [...]

ED, I'm guessing, does not refer to erectile dysfunction, but the early admission/decision some colleges offer in the fall rather than the spring, correct? What is the "unfair advantage of ED" that prevents you from knowing the "full amount of merit aid that might available"?

PS: I assume OP was referring to this thread. I read this thread but couldn't make sense of the diverging points of view offered there, all without references.

Is ED some kind of Express Lane where you get in with lower credentials because you're willing to pay sticker price/forgo FA? Is this fact or opinion? And is there consensus whether people consider this fair or unfair? OP says "unfair advantage" and it's not clear whether she agrees that any conferred advantage is real and/or indeed unfair.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here is the answer to your question, OP.

Our combined household income is near 200K, but this is a recent development since I finished a degree. Prior, between reduced job hours and paying tuition, we made under 150. My husband's job is tenured, and mine is not. I see no reason to assume that I will always be employed when my child attends college. My husband's job, if it is our only income, would get us close to a free ride in a top private college since we have two children. I make less after taxes than the HYPSM tuition, so if a child gets into a top school, my salary will add absolutely nothing to the table. My salary is 90K, but remove taxes and do your math.

We never saved a penny for college, instead paying down our mortgage and our rental property mortgage instead. Older child is an excellent student, and may opt to convert her smarts into a free ride in college. If she gets into a tippy top private college with minimal financial aid, we'll open a line of credit from the house and borrow cheaply. If I lose my job or something else arises, we'll get financial aid. Whatever happens, I recommend that the child ONLY applies to colleges that commit to meet the financial aid requirements with grants, not loans.

Why would I EVER want to open a 529 account committing us to paying college tuition when so many factors can change overnight? I view 529 accounts as a option once all other reasonable investment avenues have been exhausted. Prepayment of UMD tuition is more sensible, honestly.

The 4 years my older child is in college may be great for going back to school myself for a PhD (reduce our income / expected family contribution), or perhaps joining a volunteer overseas organization as a resume builder / income reducer. Worst case scenario, the child knows that we'll pay the equivalent of UMD tuition, and she takes out loans for the rest. Two years in consulting of some kind, while living with a roommate and us paying for her utilities and food, and she'll pay it off.

Have you read what you posted? You are screaming poverty and yet own two houses and your priority is paying off your mortgages? I feel bad for your kids.

Not poverty, but risk management and asset allocation. Did you see analysis above that people who save in 529 accounts and would otherwise be eligible for small yet substantial financial aid from private colleges stand to lose 60k? I am sorry, that is 100k pretax money. Why would anyone who is not truly wealthy use 529 accounts? Also, apparently there is no effective way to segregate sibling accounts, so families get penalized twice and more if they have several children. I suppose there comes a point where tax benefits offset those losses, but that point is well beyond the proverbial donut hole. The rest of us are better off with a HELOC if / when the kid needs it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can someone explain what this comment means:

Anonymous wrote:I”m seeing a lot of threads and responses within threads. Lots of [...] people frustrated about the unfair advantage of ED because you want know the full amount of merit aid that might be available [...]

ED, I'm guessing, does not refer to erectile dysfunction, but the early admission/decision some colleges offer in the fall rather than the spring, correct? What is the "unfair advantage of ED" that prevents you from knowing the "full amount of merit aid that might available"?

PS: I assume OP was referring to this thread. I read this thread but couldn't make sense of the diverging points of view offered there, all without references.

Is ED some kind of Express Lane where you get in with lower credentials because you're willing to pay sticker price/forgo FA? Is this fact or opinion? And is there consensus whether people consider this fair or unfair? OP says "unfair advantage" and it's not clear whether she agrees that any conferred advantage is real and/or indeed unfair.

I believe what the poster is referring to is the fact that ED applications are binding--you apply to one school ED and if they accept you, you agree to attend. Because the numbers of applications are lower, the percentage chance of getting accepted is better (or perceived to be better), but you need to accept without knowing what financial aid(of any type) is available to you.

For most Regular Decision applications later in the year, you get financial aid information before you need to make a commitment by May 1. If you know you can afford the school regardless of any money offered, you are more able to apply ED. If you want to see numbers before you commit, you need to apply RD which puts you in a bigger pool of applicants and may lower your chance of acceptance, thus giving an "unfair advantage" to those with money to full-pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In-State colleges in general are the best deals for most people and many are notoriously stingy with aid other than loans.

Naive question: what does "aid other than loans" mean, or specifically, what does "loans" here mean? Do In-state college have their own loan programs to which they offer access for admitted students, or is the poster referring to the fact that these colleges ask families to make up the difference between the COA and their EFC by taking out the usual loans (unsub/sub federal loans, PLUS loans, etc.)?
If the latter, why do people refer to loans as a form of financial aid at all? (And why do colleges even include it? Is this like a sign in a convenience store that says: cash only, ATM is around the corner?)

Sounds like you're already on the right track, people are mostly referring to Federal loans that are automatically worked into FA offers. Here's current numbers for Maryland. They estimated total cost at $27,318, they deduct the Federal subsidized and unsubsidized loans that are available ($5500) and come to a COA $21,818 which is under our Expected Family Contribution. This means we pay the full $27,318 whether we decide to take the Federal loans or not. Maryland offered no other aid, not even offer work study. The loans are financial aid, but not part of the Cost of Attendance because you don't cough up the money until after attendance is done. I don't know if some state schools also offer institutional but private schools often have anther 2K in loans on offer.

[Anonymous]

I hope this question fits here. We know we will not qualify for financial aid. We have saved quite a bit for college and are at the point of career where income is pretty high. Am I still supposed to fill out the federal form? Does it help one way or the other— DD is interested in OOS public colleges where she should qualify for some merit. I know it is merit not aid but just checking if they would be less inclined to offer if they see there is already enough to pay full. But I have heard more than once “fill out the form regardless” but we have $300,000 per kid saved. But of course I’d rather have merit than not have! I don’t know who to ask this question to because it seems so braggy so an anonymous forum works.

[Anonymous]

Anonymous wrote:I hope this question fits here. We know we will not qualify for financial aid. We have saved quite a bit for college and are at the point of career where income is pretty high. Am I still supposed to fill out the federal form? Does it help one way or the other— DD is interested in OOS public colleges where she should qualify for some merit. I know it is merit not aid but just checking if they would be less inclined to offer if they see there is already enough to pay full. But I have heard more than once “fill out the form regardless” but we have $300,000 per kid saved. But of course I’d rather have merit than not have! I don’t know who to ask this question to because it seems so braggy so an anonymous forum works.

The short answer is to check with each school where you apply.
Will you take merit aid if it is offered? Some schools require you to fill out the FAFSA to receive merit aid as well as need-based aid--this should be clearly stated on their website so you will know before you apply.
Do you want your child to take the federal loans (some people feel that if their child has some "skin in the game" they will be more motivated), then you need to fill out the FAFSA.

If the answers above are "no", and you are willing to foot the entire bill yourselves, then, no, you do not need to fill it out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Here is the answer to your question, OP.

Our combined household income is near 200K, but this is a recent development since I finished a degree. Prior, between reduced job hours and paying tuition, we made under 150. My husband's job is tenured, and mine is not. I see no reason to assume that I will always be employed when my child attends college. My husband's job, if it is our only income, would get us close to a free ride in a top private college since we have two children. I make less after taxes than the HYPSM tuition, so if a child gets into a top school, my salary will add absolutely nothing to the table. My salary is 90K, but remove taxes and do your math.

We never saved a penny for college, instead paying down our mortgage and our rental property mortgage instead. Older child is an excellent student, and may opt to convert her smarts into a free ride in college. If she gets into a tippy top private college with minimal financial aid, we'll open a line of credit from the house and borrow cheaply. If I lose my job or something else arises, we'll get financial aid. Whatever happens, I recommend that the child ONLY applies to colleges that commit to meet the financial aid requirements with grants, not loans.

Why would I EVER want to open a 529 account committing us to paying college tuition when so many factors can change overnight? I view 529 accounts as a option once all other reasonable investment avenues have been exhausted. Prepayment of UMD tuition is more sensible, honestly.

The 4 years my older child is in college may be great for going back to school myself for a PhD (reduce our income / expected family contribution), or perhaps joining a volunteer overseas organization as a resume builder / income reducer. Worst case scenario, the child knows that we'll pay the equivalent of UMD tuition, and she takes out loans for the rest. Two years in consulting of some kind, while living with a roommate and us paying for her utilities and food, and she'll pay it off.

Have you read what you posted? You are screaming poverty and yet own two houses and your priority is paying off your mortgages? I feel bad for your kids.

Not poverty, but risk management and asset allocation. Did you see analysis above that people who save in 529 accounts and would otherwise be eligible for small yet substantial financial aid from private colleges stand to lose 60k? I am sorry, that is 100k pretax money. Why would anyone who is not truly wealthy use 529 accounts? Also, apparently there is no effective way to segregate sibling accounts, so families get penalized twice and more if they have several children. I suppose there comes a point where tax benefits offset those losses, but that point is well beyond the proverbial donut hole. The rest of us are better off with a HELOC if / when the kid needs it.

Question: doesn’t that second home, the rental property, count as an asset similar to cash in the bank. I understand paying down the primary mortgage as that doesn’t count in the financial aid number.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Here is the answer to your question, OP.

Our combined household income is near 200K, but this is a recent development since I finished a degree. Prior, between reduced job hours and paying tuition, we made under 150. My husband's job is tenured, and mine is not. I see no reason to assume that I will always be employed when my child attends college. My husband's job, if it is our only income, would get us close to a free ride in a top private college since we have two children. I make less after taxes than the HYPSM tuition, so if a child gets into a top school, my salary will add absolutely nothing to the table. My salary is 90K, but remove taxes and do your math.

We never saved a penny for college, instead paying down our mortgage and our rental property mortgage instead. Older child is an excellent student, and may opt to convert her smarts into a free ride in college. If she gets into a tippy top private college with minimal financial aid, we'll open a line of credit from the house and borrow cheaply. If I lose my job or something else arises, we'll get financial aid. Whatever happens, I recommend that the child ONLY applies to colleges that commit to meet the financial aid requirements with grants, not loans.

Why would I EVER want to open a 529 account committing us to paying college tuition when so many factors can change overnight? I view 529 accounts as a option once all other reasonable investment avenues have been exhausted. Prepayment of UMD tuition is more sensible, honestly.

The 4 years my older child is in college may be great for going back to school myself for a PhD (reduce our income / expected family contribution), or perhaps joining a volunteer overseas organization as a resume builder / income reducer. Worst case scenario, the child knows that we'll pay the equivalent of UMD tuition, and she takes out loans for the rest. Two years in consulting of some kind, while living with a roommate and us paying for her utilities and food, and she'll pay it off.

Have you read what you posted? You are screaming poverty and yet own two houses and your priority is paying off your mortgages? I feel bad for your kids.

Not poverty, but risk management and asset allocation. Did you see analysis above that people who save in 529 accounts and would otherwise be eligible for small yet substantial financial aid from private colleges stand to lose 60k? I am sorry, that is 100k pretax money. Why would anyone who is not truly wealthy use 529 accounts? Also, apparently there is no effective way to segregate sibling accounts, so families get penalized twice and more if they have several children. I suppose there comes a point where tax benefits offset those losses, but that point is well beyond the proverbial donut hole. The rest of us are better off with a HELOC if / when the kid needs it.

Question: doesn’t that second home, the rental property, count as an asset similar to cash in the bank. I understand paying down the primary mortgage as that doesn’t count in the financial aid number.

Sure, any equity in the rental house is equivalent to a bank account and the rental income is income. At many schools, the first home is also equivalent to a bank account (which is why PP could take a HELLOC--they have home equity instead of a 529, same impact on FA). Also, threatening to quit a job wont diminish aid immediately. Since aid works off prior, prior year returns, it will take two years of unemployment to alter the calculation.

[Anonymous]

Anonymous wrote:I hope this question fits here. We know we will not qualify for financial aid. We have saved quite a bit for college and are at the point of career where income is pretty high. Am I still supposed to fill out the federal form? Does it help one way or the other— DD is interested in OOS public colleges where she should qualify for some merit. I know it is merit not aid but just checking if they would be less inclined to offer if they see there is already enough to pay full. But I have heard more than once “fill out the form regardless” but we have $300,000 per kid saved. But of course I’d rather have merit than not have! I don’t know who to ask this question to because it seems so braggy so an anonymous forum works.

Shorter answer is merit aid is what schools use to attract families that will pay the remaining tuition. Schools may not be able to offer merit only to wealthy families, but it would be in there interest to do so if they could--since the wealthy family is more likely to take the package, and the family receiving other aid may have a better package elsewhere or just see travel as too expensive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can someone explain what this comment means:

Anonymous wrote:I”m seeing a lot of threads and responses within threads. Lots of [...] people frustrated about the unfair advantage of ED because you want know the full amount of merit aid that might be available [...]

ED, I'm guessing, does not refer to erectile dysfunction, but the early admission/decision some colleges offer in the fall rather than the spring, correct? What is the "unfair advantage of ED" that prevents you from knowing the "full amount of merit aid that might available"?

PS: I assume OP was referring to this thread. I read this thread but couldn't make sense of the diverging points of view offered there, all without references.

Is ED some kind of Express Lane where you get in with lower credentials because you're willing to pay sticker price/forgo FA? Is this fact or opinion? And is there consensus whether people consider this fair or unfair? OP says "unfair advantage" and it's not clear whether she agrees that any conferred advantage is real and/or indeed unfair.

No, there is no evidence that kids with lower credentials get in via ED (SAT/GPA of ED and RD accepted students are very close to one another and vary which group is higher/lower year by year for most schools) once you control for athletic recruits (many are asked to commit ED) and other specific hooks. What ED offers is a smaller pool with higher rates of acceptance because the school knows you are bound to come so a qualified kid may be more likely to be admitted. For some schools the stats of ED applicants are so high this offers a reduced chance, but you can get a 2nd chance if you are deferred into RD.

[Anonymous]

Anonymous wrote:The loans are financial aid, but not part of the Cost of Attendance because you don't cough up the money until after attendance is done.

When I read this (re-) interpretation of COA to exclude financed costs (which I assume is not a slight of hand on the part of the helpful poster, but probably the official way of speech) it's difficult to not get annoyed. Usually, tricky and misleading interpretations of commonly understood terms like cost are the hallmark of a sleazy business.

On the flipside, do subsidized loans have prepayment penalties? If not, there doesn't seem to be any reason to not take them. You can always invest the money until interest becomes due. If you've saved, that is.

[Anonymous]

Anonymous wrote:I believe what the poster is referring to is the fact that ED applications are binding--you apply to one school ED and if they accept you, you agree to attend. Because the numbers of applications are lower, the percentage chance of getting accepted is better (or perceived to be better), but you need to accept without knowing what financial aid (of any type) is available to you.

For most Regular Decision applications later in the year, you get financial aid information before you need to make a commitment by May 1. If you know you can afford the school regardless of any money offered, you are more able to apply ED. If you want to see numbers before you commit, you need to apply RD which puts you in a bigger pool of applicants and may lower your chance of acceptance, thus giving an "unfair advantage" to those with money to full-pay.

Thanks for the helpful explanation! But is it in fact just not knowing what FA is available when making a binding commitment, or do ED applicants in fact receive less FA than RD applicants, all other things being equal?