Anyways to improve financial aid?

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caradhast
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Anyways to improve financial aid?

Post by caradhast »

I have a child that is a freshman in high school now and am looking for any strategies to improve his chances of financial aid. I think we make too much to qualify.

Income is about 150k, AGI is 125k but most of that gets added back in for FAFSA.

House and cars are paid for and all assets get moved into an IRA to be sheltered.

I was thinking of using apartments/rentals as a means of lowering AGI but I think it would take a large portfolio and you don't want to pick up a property that loses money. In addition, my spouse would need to pick up a real estate license and make this their primary profession.

Can something like this work?
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Re: Anyways to improve financial aid?

Post by Jack FFR1846 »

This depends what college we're talking about. If the college has a crew team (rowing) and the high school has a crew team, get him on that team. It's the easiest way to get a money scholarship. I am not saying crew is an easy sport. I had 2 room mates in college on crew and they were up at 4 to get to the lake for morning practice. But compared to something like football, where almost everyone has a zero chance for a scholarship because there are plenty of stars who are better and applying, crew is much more obscure, so applications are fewer.

Also understand that the vast majority of what's now called "aid" is simply loans. At your AGI, you're probably going to have Stafford loans offered to your son/daughter and you will be offered PLUS parent loans. Expensive, private colleges will have more aid for merit and other obscure scholarships. My son was applying to transfer and Boston University offered him a total of $13k (of more than $70k total) in 2 scholarships that both appeared to be named after dorms.
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livesoft
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Re: Anyways to improve financial aid?

Post by livesoft »

Go for merit aid instead. Make sure your student gets perfect SAT scores and get a 4 or 5 on 15 or more AP exams. Also make sure they have a job in high school. Anybody who can juggle a jobs and do great academically does not really need extracurriculars like sports, music, chess, and rowing.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

Were aren't sure on the major yet (leaning towards engineering), so we don't know the college. For certain fields, a better school may make sense for others, state and community colleges are ideal. We have been looking at the raise.me website to understand how merit aid is calculated and we are trying to optimize his activities based on that (for the areas he has interest in). Sports isn't really his thing, but there are a few things we can do engineering wise for merit aid.

AGI is the hard part. If he took a 'gap' year it would help as then his sibling would also be in college so the EFC would be halved, but then its a year of delayed earnings which hurts him for retirement.
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Bogle7
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Re: Anyways to improve financial aid?

Post by Bogle7 »

Look at both the FAFSA and CSS forms and see what is not counted as money available for college.
For example, retirement funds.

Your goal, in your child’s junior year, is to have:
Zero assets (both you and child)
Zero income.

Zero as defined by the forms.
Last edited by Bogle7 on Tue Apr 06, 2021 9:25 pm, edited 1 time in total.
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ncbill
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Re: Anyways to improve financial aid?

Post by ncbill »

Here in the USA there's a lot of military money for undergrad.

e.g. service academies, ROTC scholarships (national & campus-based)...just joining the National Guard covers tuition in many states at in-state public schools.

The above is what my kids used...one starting at a ($$$) private in-state university on a 4-year national ROTC scholarship for a year before re-applying & gaining admission to the service academy that was their original first choice, the other receiving a 3-year campus-based ROTC scholarship to a ($$$) private out-of-state university, so the school itself then cut the total price of their first year in half.
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Re: Anyways to improve financial aid?

Post by wolf359 »

caradhast wrote: Tue Apr 06, 2021 8:44 am I have a child that is a freshman in high school now and am looking for any strategies to improve his chances of financial aid. I think we make too much to qualify.

Income is about 150k, AGI is 125k but most of that gets added back in for FAFSA.

House and cars are paid for and all assets get moved into an IRA to be sheltered.

I was thinking of using apartments/rentals as a means of lowering AGI but I think it would take a large portfolio and you don't want to pick up a property that loses money. In addition, my spouse would need to pick up a real estate license and make this their primary profession.

Can something like this work?
If you're thinking in terms of need-based financial aid, you should broaden your scope. You're really looking for different means of paying for college, not just financial aid. The problem with need-based financial aid is that if you get it, a large amount will be in the form of loans. I second the notion of filling out the FAFSI and the CSS Profile early, so you know what to expect.

- Someone mentioned the military option. There are also other government programs sponsored by other DoD and intelligence organizations for those going into STEM fields. If accepted into these programs, you generally get paid, get your tuition paid, and work for them for a few years after graduation.

- Check out your state's community college program. Some states have a program where you can start out at the community college, then are guaranteed acceptance into any of the higher end state colleges. You can potentially get a degree from your state's flagship school but at a much lower price.

- Have your kid take as many AP classes as possible. Every college credit you knock off while he's going to high school is one you don't have to earn (and pay for) later.

- Starting as a freshman, examine every class he takes to see if there is a CLEP exam for that subject. Then study it and take a CLEP exam. CLEP was designed to allow non-traditional students to "test out" of college classes for which they already have real-world knowledge. But nothing says you can't test out of college classes as a normal student, either. See: https://clep.collegeboard.org/exams Again, the fewer college classes you take, the cheaper your college bill. Note that not all colleges take all CLEP tests, so your mileage may vary. Obviously, if it's an AP class, just do the AP.

- Check out college programs that are work-study. Some colleges will put you with an internship where you work part time and are a student part time. This also helps you pay for the school.

- It's not good to change your finances structurally for financial aid, because you might not get it. And then you'll be stuck, because you may then lack the liquidity to pay for college. An example is buying a rental property to "hide" income. I know someone who bought a rental property when their child was a toddler. It was structured with a 15 year mortgage, such that it was fully paid off by the time the child was ready for college. They then had the option to use the rental income to pay for the tuition, or to sell the property outright and to pay the tuition, or to do a cash-out refi to raise funds for tuition (and then have the renters pay it down again.) They have no restrictions if their child didn't end up going to college. And they applied for financial aid, where only 5-6% of the value of the property counted against them in financial aid calculations.

- Consider whether to pre-pay for a year of a state college. Many of these programs allow you to pay off pre-paid tuition over several years. It's a way of paying for college over several years prior to the college experience. The advantage is that it locks in a lower price, and often allows you to pay without delaying retirement (since you're during your prime working years.) This option will vary wildly depending on state.

- Consider attending Governor's School. In some states, students at these schools don't have to pay for state school.

- Some high schools also allow students to directly take college courses while in high school. Usually these classes are covered by the school system.

- Have the child apply for as many merit-based scholarships as possible.

I probably missed a few, but these are tactics off the top of my head.
welldone
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Re: Anyways to improve financial aid?

Post by welldone »

EFC will not longer be split with two or more children in college at the same time starting in 2023 (will also be renamed to SAI - Student Aid Index). So, please don't have your son take a gap year thinking two in college at the same time is going to help you financially, that loop hole is closing.

The financial aid landscape has changed rapidly in the last 10 years or so. I would suggest trying to find a sampling of schools your child may be interested in and learn/watch what happens with the merit and need-based financial aid over the next 2-3 year. That will give you a better idea of what to do than any slightly hare-brained scheme you may be presented with to try to hide income.

Biggest piece to do right now? Figure out how much money you want to spend per year on college for your children. Your budget choices will dictate the choices your child will have of schools. Find schools that will likely come in at or below the budget you set after financial aid. Some may give a bit of need based help, most financial help you may get will most likely be merit at your income level. Or, of course, loans.
oldfatguy
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Re: Anyways to improve financial aid?

Post by oldfatguy »

OP, how much can you cashflow each year for college? Do you have any savings earmarked for this?
DIFAR31
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Re: Anyways to improve financial aid?

Post by DIFAR31 »

caradhast wrote: Tue Apr 06, 2021 8:44 am I was thinking of using apartments/rentals as a means of lowering AGI but I think it would take a large portfolio and you don't want to pick up a property that loses money. In addition, my spouse would need to pick up a real estate license and make this their primary profession.

Can something like this work?
The equity you have in any property other than your primary residence must be reported as a parent asset on all financial aid forms, and this will decrease the amount of any need-based award. In other words, if you are contemplating sheltering your assets in apartments/rentals as a way to get a more favorable need-based financial aid award for your children, that will not happen.
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greg24
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Re: Anyways to improve financial aid?

Post by greg24 »

Don't let the tail wag the dog. Considering a career change to game the college funding system is extreme.

There are a lot of things you can more easily control that will have a larger impact on your bottom line. Take a lot of AP classes. Go to an in-state, reasonably-priced school. Have a job in school. Be an RA for a year for free room and board. Graduate in four years. Or less.
book lover
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Re: Anyways to improve financial aid?

Post by book lover »

You may want to check out the following book: The Price You Pay For College by Ron Lieber.
momvesting
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Re: Anyways to improve financial aid?

Post by momvesting »

Honestly, it is a bit early to think about FAFSA, especially with all the changes. Our income is a bit less than yours, around $100k, and we ended up falling into this little hole where the need-based aid is nonexistent at public schools and pretty good at a lot of privates. So almost all schools, regardless of sticker price, fall in the $30k-$40k range (unless we looked at in state, which does not even have my kid's major, so it was out). There were a few outliers, but at our income the more expensive out of state publics, like the California schools, were the most expensive.

Really, you start running net price calculators and see which schools you pretty much have to eliminate based on cost. You choose something within your range under your current situation. Then you make little adjustments in the months leading up to when you fill out the FAFSA to save a few hundred dollars. Some examples of these include: Ramping up 401k contributions before the FAFSA, for example, if you do the full $19,500/year, consider taking the $19,500, subtracting what you have to put in to get company match, and spreading the remaining over 8-9 months, then having larger take home pay the last 3-4 months of the year. You can also do this with your income taxes. Yes, the 401k contributions get added back on, but you reduced or depleted liquid savings that do count against you, and ramp them up after FAFSA. Also, prepay everything you can: car insurance, estimated taxes, homeowners insurance, property taxes, and anything else you can think of to reduce the liquid savings. I actually adjusted the timing of both my homeowners and car insurance just so I can pay them both in September every year. Make sure your IRAs are fully funded prior to FAFSA. You cannot do much to control income but you can spend down some assets in a healthy (and perfectly legal) way.

Also, start looking for those small, local scholarships that often overlooked, stuff like Elk's Club, Rotary Club, Lion's Club, etc. Schools will tell you that merit aid actually reduces your financial aid package, and that is true, but the small amounts will first reduce your work study and your subsidized loan amounts at many schools. Usually this only applies to outside scholarships though, often if the school gives you merit aid, they just use it to reduce the financial aid package.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

oldfatguy wrote: Tue Apr 06, 2021 3:00 pm OP, how much can you cashflow each year for college? Do you have any savings earmarked for this?
Cash flow is essentially what the mortgage payments were so 10-15k a year. Savings are about 35K (for two kids) sitting in Roth IRAs currently.
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Re: Anyways to improve financial aid?

Post by Normchad »

livesoft wrote: Tue Apr 06, 2021 9:31 am Go for merit aid instead. Make sure your student gets perfect SAT scores and get a 4 or 5 on 15 or more AP exams. Also make sure they have a job in high school. Anybody who can juggle a jobs and do great academically does not really need extracurriculars like sports, music, chess, and rowing.
+1. Terrific advice. People spend too much time thinking about the extracurricular, and not enough time on the academics. Most kids can get very high standardized test scores if they work at it. The AP tests aren’t that hard. The best way to prepare yourself for college, is to buckle down in high school and work hard.

Here’s how to get that big school experience at a bargain basement price. Get a 32 on your ACT and take the automatic full ride to university of Alabama. Further, take the AP tests as suggested by livesoft, and enter school as a junior. Either graduate in 2 years, or get several degrees while you’re there, or graduate early and start grad school there with the left over scholarship.

There are other schools that are similarly generous......

It seems most of financial aid now is either straight merit, or loans. Getting more loans isn’t great.....
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TomatoTomahto
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Re: Anyways to improve financial aid?

Post by TomatoTomahto »

livesoft wrote: Tue Apr 06, 2021 9:31 am Make sure your student gets perfect SAT scores and get a 4 or 5 on 15 or more AP exams. Also make sure they have a job in high school. Anybody who can juggle a jobs and do great academically does not really need extracurriculars like sports, music, chess, and rowing.
Make your student one that stands a chance to be accepted by the very generous need-based schools. It’s still a long shot (many exceptional students are rejected), but your income won’t bother Princeton (probably the most generous).

Then, if that doesn’t work, your child will be well placed to negotiate merit based aid. The “lesser” schools are still very good, and will pay up to use your child’s stats to improve their rankings. It’s a game, but one that your student can maneuver.

Remember, have your student emphasize academic achievement. It will pay off.
I get the FI part but not the RE part of FIRE.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

DIFAR31 wrote: Tue Apr 06, 2021 3:11 pm
caradhast wrote: Tue Apr 06, 2021 8:44 am I was thinking of using apartments/rentals as a means of lowering AGI but I think it would take a large portfolio and you don't want to pick up a property that loses money. In addition, my spouse would need to pick up a real estate license and make this their primary profession.

Can something like this work?
The equity you have in any property other than your primary residence must be reported as a parent asset on all financial aid forms, and this will decrease the amount of any need-based award. In other words, if you are contemplating sheltering your assets in apartments/rentals as a way to get a more favorable need-based financial aid award for your children, that will not happen.
The equity would be calculated by taking the quick sale method so as long as a rental is not more than 20% equity, it would show a zero value. The problem is that depreciation is required to show a net loss and lower AGI with a paper loss, but ideally when you buy property you have a gain and I dont know that a 3.636% depreciation per year will make that much of an impact on the AGI. If I purchased rentals at 500,000, I could depreciate only 18k off of the AGI. I think I would need to push a portfolio higher to make an interest on FAFSA. I also do not think this works for CSS schools as they will add the deprecation back to the AGI if I understand correctly.
momvesting
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Re: Anyways to improve financial aid?

Post by momvesting »

Does your state give you a tax credit for contributing to a 529? If you have $10k-$15k to contribute and your kid is a freshman, you have a few years to do that if there is a tax credit. You can do the IRA path if you want, I just choose not to because I get a tax credit for the 529 and I want to use the IRA space for myself and my spouse.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

Normchad wrote: Tue Apr 06, 2021 3:54 pm
+1. Terrific advice. People spend too much time thinking about the extracurricular, and not enough time on the academics. Most kids can get very high standardized test scores if they work at it. The AP tests aren’t that hard. The best way to prepare yourself for college, is to buckle down in high school and work hard.

Here’s how to get that big school experience at a bargain basement price. Get a 32 on your ACT and take the automatic full ride to university of Alabama. Further, take the AP tests as suggested by livesoft, and enter school as a junior. Either graduate in 2 years, or get several degrees while you’re there, or graduate early and start grad school there with the left over scholarship.

There are other schools that are similarly generous......

It seems most of financial aid now is either straight merit, or loans. Getting more loans isn’t great.....
I think the merit approach is probably the best approach and I have some ideas on this. Working with my son, I think if he did some engineering projects with my assistance and entered some of the competitions, it should help him from a merit approach, especially if would apply for a provisional patent.

I can have him work on the ACT and SAT aids, I wonder if those are starting to be phased out. We do plan on applying for a fair amount of schools and then leveraging different aid packages against similar schools to see what we can negotiate.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

momvesting wrote: Tue Apr 06, 2021 4:05 pm Does your state give you a tax credit for contributing to a 529? If you have $10k-$15k to contribute and your kid is a freshman, you have a few years to do that if there is a tax credit. You can do the IRA path if you want, I just choose not to because I get a tax credit for the 529 and I want to use the IRA space for myself and my spouse.
It does (PA) so about 3% credit. If we did it that way, we would put it in the account for child #2.
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Re: Anyways to improve financial aid?

Post by KlangFool »

caradhast wrote: Tue Apr 06, 2021 4:05 pm
I can have him work on the ACT and SAT aids, I wonder if those are starting to be phased out. We do plan on applying for a fair amount of schools and then leveraging different aid packages against similar schools to see what we can negotiate.
caradhast,

Make sure that he takes the PSAT test. It is needed for National Merit Scholarship.

https://www.nationalmerit.org/s/1758/in ... 2&pgid=424

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DIFAR31
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Re: Anyways to improve financial aid?

Post by DIFAR31 »

caradhast wrote: Tue Apr 06, 2021 3:57 pm The equity would be calculated by taking the quick sale method so as long as a rental is not more than 20% equity, it would show a zero value.
I disagree. The financial aid forms want you to calculate equity by subtracting any outstanding principal owed on the property from the amount the property would sell for on the day you fill out the form if it was on the market as part of a normal selling process. Not the best offer you would receive if you absolutely had to put the house on the market today and sell it today. Using the "quick sale method" is nowhere in the form instructions or even hinted at by the Department of Education for FAFSA or College Scholarship Service for Profile. The only place I have seen this before is from financial aid "advisors" who make other dubious claims and provide ethically questionable "advice." Investing in multiple rental properties and hiding your equity from financial aid officers as long as that equity is less than 20% in each property is not the answer you are looking for.
IowaFarmBoy
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Re: Anyways to improve financial aid?

Post by IowaFarmBoy »

If your kid will test well, being flexible in choice of schools can really help in getting merit-based aid. Both of our daughters tested well, had good grades, and were interested in STEM fields. We were able to identify schools that were more second tier that had good programs in their areas of interest and fit them well. They both got quite a bit of merit-based aid and have done well at the schools and in their subsequent careers.
welldone
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Re: Anyways to improve financial aid?

Post by welldone »

University of Alabama no longer has full ride for 32 ACT or higher. As I said before, the landscape changes quickly. Spend some time finding out facts, as opposed to assumptions or old info to make plans.
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Re: Anyways to improve financial aid?

Post by friar1610 »

My granddaughter is a HS Senior who will finish as one of the top 5 in a class of about 200 in a reasonably affluent town. Her parents make very good money and don’t qualify for need-based aid. She has applied to a helluva lot of schools and has received some very robust merit offers from excellent but not creme de la creme schools. Two are highly regarded liberal arts schools although below the top 10-15 nationally ranked. One is from a large private university and another from the honors college of the flagship State U. In an adjacent state. Her keys seem to be 1) excellent academics with a lot of AP courses; 2) track and cross-country good enough for varsity at a D-III school or club participation at D-I; 3) PT jobs during the school year; 4) very high SAT scores that were likely wasted as many colleges made them optional this year.

It should be noted that in addition to those merit scholarship offers, she was both accepted without aid and rejected and some top-notch schools. It’s been difficult to discern any consistent pattern from them.

I will say I’m very glad to be one generation removed from the angst of having kids applying to college!
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cshell2
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Re: Anyways to improve financial aid?

Post by cshell2 »

livesoft wrote: Tue Apr 06, 2021 9:31 am Go for merit aid instead. Make sure your student gets perfect SAT scores and get a 4 or 5 on 15 or more AP exams. Also make sure they have a job in high school. Anybody who can juggle a jobs and do great academically does not really need extracurriculars like sports, music, chess, and rowing.
Yes, just make sure your kid is in the 99th percentile academically. Simple. :?
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cockersx3
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Re: Anyways to improve financial aid?

Post by cockersx3 »

Agree with all of the other posters that you should "go all in" on merit aid. It is not worth hiding assets or otherwise structuring your finances to try to game the need-based aid system, since most of the "aid" you or your son are likely to receive will come in the form of loans.

Our family is wrapping up this process with our senior. The two most important things for merit are SAT scores and GPA, so focus your efforts on those two things. Don't overdo the AP's if they could impact GPA, since our experience is that (high GPA + less AP courses) >> (lots of AP courses but lower GPA). If there is a choice between an "honors" course and an AP course, take whichever one your kid is likely to get the "A" in since colleges will look at these as equivalent in terms of academic rigor. While encouraging your kid to do after school activities / sports is always good, don't load up so much that the grades are impacted. Keep in mind that grade inflation is a huge thing now (at least relative to when I was a kid), so every B your kid gets will hurt you in the chase for merit aid.

On the SAT scores, preparation is key. Keep in mind that your son will need to prepare not just for content, but also for time management on the test and other test-taking strategies. If you can afford a private tutor, do it - it is the best money you will ever spend since the ROI from the merit aid is so high. You can take the test multiple times, since colleges will usually take the best of all of your scores. So again, if you can afford the testing costs, it's worth it to sign up and take multiple tests to help increase your kid's score.

The other thing we learned about very late is the concept of "dual enrollment," where high school kids can take college courses at the local community college while still in HS. Our school system allows them to do it as early as junior year, and they give a 20% or so discount on the (already stupidly cheap) local CC cost. Most colleges we've interacted with seem more willing to accept CC classes taken in HS as transfer credit, relative to AP courses, so if your son can handle the academic rigor of a "real" college course as a HS junior (not every 16 year old can do this) it's a great way to reduce overall college costs. Only restriction is that colleges will often grant credit only for dual enrollment classes taken on the CC campus by CC professors, and not for "dual enrollment level" "college courses" taught in the HS by HS teachers. (Our school system offers both as an option.)

This has a lot of value in an engineering program, since the typical freshman engineering courses (ie Calc I-IV, physics I/II, Chem I/II, are usually offered at CC and are basically the same curriculum wherever you go. Our daughter is doing this now and will likely have most of her first year engineering courses completed before you even gets to college. Keep in mind that my senior is very mature for her age and had no problem with the self-discipline needed to keep up with college coursework as a HS student (in the COVID era, no less!), but like I said it may be a tall order for most kids that age. My only regret is that we didn't find out about this until just before senior year, otherwise she may have taken even more college courses at the CC.

One last thing - all these recommendations apply only for the non-tippy-top tier of colleges. If you do all of this and your kid applies to MIT, he's not getting merit aid - there are just too many parents who will happily pay $80K/year to send their kids there. Instead, when it gets to that point encourage your kid to look at colleges known for merit aid. For our daughter, we gave her a budget that she needed to stay within, and she naturally drifted to colleges known for financial aid to allow her to stay within her budget. As in all things, clear transparent communication on finances - early and often - is really important.
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Re: Anyways to improve financial aid?

Post by livesoft »

cockersx3 wrote: Tue Apr 06, 2021 6:20 pm.... Don't overdo the AP's if they could impact GPA, since our experience is that (high GPA + less AP courses) >> (lots of AP courses but lower GPA).
FWIW, for myself and both my children AP courses allowed us to graduate early and thus saved the costs of a full year of college. That was nothing to sneeze at.
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I-Know-Nothing
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Re: Anyways to improve financial aid?

Post by I-Know-Nothing »

I don’t think you’ll be able to lower AGI enough to get any aid other than loans. If your child is advanced academically, they could try the merit based options others have suggested. If they are more of a B student, they could try the community college and then state university route. There is no shame in this, and most potential employers don’t care that much about whether someone attended a private or public university. Total tuition costs for this in PA would be about $50k, and your child could live at home, work part-time, and contribute towards tuition. If each of you were able to cash flow $25k over a 4-year period, your child could graduate without loans and with a 4-year degree.
oldfatguy
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Re: Anyways to improve financial aid?

Post by oldfatguy »

caradhast wrote: Tue Apr 06, 2021 3:50 pm
oldfatguy wrote: Tue Apr 06, 2021 3:00 pm OP, how much can you cashflow each year for college? Do you have any savings earmarked for this?
Cash flow is essentially what the mortgage payments were so 10-15k a year. Savings are about 35K (for two kids) sitting in Roth IRAs currently.
Assuming you save that 10-15K over the next 4 years, and add it to the 35K, you'll have about 90k when the oldest begins college, plus the continuing 10-15K a year cashflow. Depends on your location, but tuition at many state schools is only about 10K a year. You've got 90K saved to throw at room and board for your two kids. Student jobs in HS and college, plus a small student loan each year can cover the rest.

Worst case, even without any merit aid at all, you should be able to afford state university.
calwatch
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Re: Anyways to improve financial aid?

Post by calwatch »

There are instances where there are hard asset caps and you would need to maneuver around that. For instance in California the Cal Grant and Middle Class Scholarship both have hard income and asset caps.
ncbill
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Re: Anyways to improve financial aid?

Post by ncbill »

cshell2 wrote: Tue Apr 06, 2021 5:30 pm
livesoft wrote: Tue Apr 06, 2021 9:31 am Go for merit aid instead. Make sure your student gets perfect SAT scores and get a 4 or 5 on 15 or more AP exams. Also make sure they have a job in high school. Anybody who can juggle a jobs and do great academically does not really need extracurriculars like sports, music, chess, and rowing.
Yes, just make sure your kid is in the 99th percentile academically. Simple. :?
No kidding...one of my kids despite Herculean prep got relatively low standardized test scores...but their grades, leadership (started & ran multiple school clubs) & athletics got them their ROTC scholarship.
TallBoy29er
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Re: Anyways to improve financial aid?

Post by TallBoy29er »

cshell2 wrote: Tue Apr 06, 2021 5:30 pm
livesoft wrote: Tue Apr 06, 2021 9:31 am Go for merit aid instead. Make sure your student gets perfect SAT scores and get a 4 or 5 on 15 or more AP exams. Also make sure they have a job in high school. Anybody who can juggle a jobs and do great academically does not really need extracurriculars like sports, music, chess, and rowing.
Yes, just make sure your kid is in the 99th percentile academically. Simple. :?
Was being a kid always this stressful? "No sports with your friends DD, you have to get to your job, then homework, then bed." Rinse repeat? When do kids get to be, well, kids?
texasdiver
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Re: Anyways to improve financial aid?

Post by texasdiver »

We just went through this process for daughter #2 and I 100% echo the other recommendations here to seek merit aid rather than clever ways to hide your income. Our AGI is double yours yet we still qualified for $7k of need-based aid from one liberal arts college so don't entirely write-off need-based aid. But generally speaking your strategy for minimizing college costs are going to be: (1) in-state public schools, and (2) merit aid from mid-range private schools.

Honestly, if you want to make a life-altering decision to reduce college costs, rather than cutting back on your income, the better solution would be to move to a state that has top-tier public university options available. We moved back to the Pacific Northwest and among the reasons we chose to live across the river in WA rather than in OR was the superior public university options in WA. My daughter will be entering University of Washington next fall for which we will owe about $11,600 per year in tuition and fees. Compared to over $60,000 at some of the top private universities or out-of-state publics. And that's not even counting room and board.

The thing to understand about merit aid is that it has nothing much to do with your child's actual merit. It is simply a pricing mechanism that schools use to attract the most highly qualified students who would otherwise likely choose a higher rated school. What this means is that the most highly rated schools tend to offer little or no merit aid even though on paper they tend to attract the most meritorious students. This is because they don't have to and to do so would simply be throwing money away. There are plenty of parents willing to pay full freight to send their students to Stanford or Harvard so no reason for those schools to offer any discount to the affluent.

The sweet spot for merit aid is going to be schools in which your child is going to rank in the top 25% in terms of GPA and SAT/ACT scores. Why those metrics and not more intangible criteria? Because those are the two criteria commonly used for college rankings and schools that aspire to rise in the rankings want to attract students with the highest GPSs and test scores. There are hundreds of private and public schools across the country who are using merit aid for this purpose. They will not be the most rarified public and private schools at the very top of the rankings. But there are plenty of extremely good schools in that category. Here in the Pacific Northwest my daughter received merit aid awards in the $30k range from some very decent mid-range private schools like Gonzaga, University of Puget Sound, Whitman, and Lewis & Clark. She received no merit aid offer from Reed College which sees itself as a step above, and would have received zero merit aid from USC, Stanford, or Pomona down in CA which we visited but did not bother applying to, in part for that reason.

Just for the sake of comparison, my wife has a co-worker (also a physician) who moved into a neighborhood a few blocks from ours about the same time as us. They have a son the same age as our daughter. As freshman and sophomores they played together in the HS marching band until they pulled their son out of marching band so he could concentrate on a more extreme academic portfolio of all AP-classes plus college-based science and technology camps in the summer. All that sort of stuff. While we let our daughter enjoy her HS years where she stayed in band, did art, and spent more free time with her friends rather than doing endless extracurriculars for the sake of college applications.

The result? They managed to get their son into top-20 Washington University in St. Louis on a pre-med track where, due to their income they will have the pleasure of paying $81,620 for the privilege next year: https://financialaid.wustl.edu/how-aid- ... ttendance/ whereas our daughter will be attending the University of Washington for which we will be paying all-in $29,319. https://admit.washington.edu/costs/coa/

Will their son be getting a $52,301 per year better education? I have my doubts.

The surest way for an upper middle class family to bankrupt themselves with college costs is to seek the status of the highest rated university that their child can get into. The "reach" schools in college admissions lingo. If you are upper middle class, seeking that status comes at a tremendous cost. The best way to constrain college costs is to stick with your in-state public universities and those private universities that actually have an incentive to attract the child via merit aid pricing.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

Appreciate all of the advice in here. Right now the highest assistance offer he has is 37k total and as he goes from a high school freshman to senior that offer will go up. Its from a school I have never heard of but if they are accredited, I'm sure its fine. Other name schools have lower offers but we are learning on how to optimize based on their formulas to increase the offer.

If he continues down the road of engineering, a more expensive school may make sense in certain cases (CMU, RIT, etc.) but they would be extremely hard to get into and he has to be prepared for the workload. Even a school like Waterloo in Canada would be top notch and they place students in well paying internships to defray cost.

He may also be able to do something like I did in my undergraduate and compress it into three years instead of four which saved me a good bit of money, although I think the school I went to closed that loophole.
livesoft
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Re: Anyways to improve financial aid?

Post by livesoft »

texasdiver wrote: Wed Apr 07, 2021 1:34 pm[...]
Just for the sake of comparison, my wife has a co-worker (also a physician) who moved into a neighborhood a few blocks from ours about the same time as us. They have a son the same age as our daughter. As freshman and sophomores they played together in the HS marching band until they pulled their son out of marching band so he could concentrate on a more extreme academic portfolio of all AP-classes plus college-based science and technology camps in the summer. All that sort of stuff. While we let our daughter enjoy her HS years where she stayed in band, did art, and spent more free time with her friends rather than doing endless extracurriculars for the sake of college applications.

The result? They managed to get their son into top-20 Washington University in St. Louis on a pre-med track where, due to their income they will have the pleasure of paying $81,620 for the privilege next year: https://financialaid.wustl.edu/how-aid- ... ttendance/ whereas our daughter will be attending the University of Washington for which we will be paying all-in $29,319. https://admit.washington.edu/costs/coa/

Will their son be getting a $52,301 per year better education? I have my doubts.

The surest way for an upper middle class family to bankrupt themselves with college costs is to seek the status of the highest rated university that their child can get into. The "reach" schools in college admissions lingo. If you are upper middle class, seeking that status comes at a tremendous cost. The best way to constrain college costs is to stick with your in-state public universities and those private universities that actually have an incentive to attract the child via merit aid pricing.
What? Like it's hard?

It is possible that the student in your anecdote could have had the same outcome even while staying in marching band, having free time, and doing AP classes, summer camps, and working part-time.

I'll toss this anecdote back at you: I know someone who was admitted to Wash U St Louis and didn't go there. They worked at part-time jobs, played through JV sports in HS, took AP cources, and had lots of fun in HS.

Upper middle class families are not going to bankrupt themselves with college costs. They have to be doing a lot of other things that help bankrupt them at the same time. :twisted:

And of course U Wash is a fantastic state flagship university ... no doubt about it. ;)
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oldfatguy
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Re: Anyways to improve financial aid?

Post by oldfatguy »

caradhast wrote: Wed Apr 07, 2021 4:03 pm Appreciate all of the advice in here. Right now the highest assistance offer he has is 37k total and as he goes from a high school freshman to senior that offer will go up. Its from a school I have never heard of but if they are accredited, I'm sure its fine. Other name schools have lower offers but we are learning on how to optimize based on their formulas to increase the offer.
How does he have any financial aid offers if he is a freshman in HS? :confused
texasdiver
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Re: Anyways to improve financial aid?

Post by texasdiver »

livesoft wrote: Wed Apr 07, 2021 4:14 pm
texasdiver wrote: Wed Apr 07, 2021 1:34 pm[...]
Just for the sake of comparison, my wife has a co-worker (also a physician) who moved into a neighborhood a few blocks from ours about the same time as us. They have a son the same age as our daughter. As freshman and sophomores they played together in the HS marching band until they pulled their son out of marching band so he could concentrate on a more extreme academic portfolio of all AP-classes plus college-based science and technology camps in the summer. All that sort of stuff. While we let our daughter enjoy her HS years where she stayed in band, did art, and spent more free time with her friends rather than doing endless extracurriculars for the sake of college applications.

The result? They managed to get their son into top-20 Washington University in St. Louis on a pre-med track where, due to their income they will have the pleasure of paying $81,620 for the privilege next year: https://financialaid.wustl.edu/how-aid- ... ttendance/ whereas our daughter will be attending the University of Washington for which we will be paying all-in $29,319. https://admit.washington.edu/costs/coa/

Will their son be getting a $52,301 per year better education? I have my doubts.

The surest way for an upper middle class family to bankrupt themselves with college costs is to seek the status of the highest rated university that their child can get into. The "reach" schools in college admissions lingo. If you are upper middle class, seeking that status comes at a tremendous cost. The best way to constrain college costs is to stick with your in-state public universities and those private universities that actually have an incentive to attract the child via merit aid pricing.
What? Like it's hard?

It is possible that the student in your anecdote could have had the same outcome even while staying in marching band, having free time, and doing AP classes, summer camps, and working part-time.

I'll toss this anecdote back at you: I know someone who was admitted to Wash U St Louis and didn't go there. They worked at part-time jobs, played through JV sports in HS, took AP cources, and had lots of fun in HS.

Upper middle class families are not going to bankrupt themselves with college costs. They have to be doing a lot of other things that help bankrupt them at the same time. :twisted:

And of course U Wash is a fantastic state flagship university ... no doubt about it. ;)
Sure, bankrupt might be a bit extreme. Maybe overextend is a better term. But there are a lot of upper middle class families doing things like massive HELOCs, Parent Plus loans, and tapping into the 401(k) to pay for those big tuition bills. They are walking a razor edge and bankruptcy probably lies ahead for some.

The point of my anecdote is simply that there are a lot of upper middle class families who absolutely devote themselves into gaining admissions into the most prestigious Ivy League or near-Ivy schools possible. Go to the college confidential web site forums if you want to see what this obsession looks like in real life. The Ivy League acceptance letters are coming out this week. It often means helicopter-parenting your child through HS and checking off every single college admissions box instead of letting your child breathe and explore. And then if by some chance you are successful in that effort you wind up with an $80K per year tuition bill for your efforts.

We chose to take a different path. Education is mostly what you put into it. And there are hundreds of fine schools across the country that will provide a splendid education at a fraction of the cost. The sweet spot for upper middle class families looking to constrain college costs are (1) in-state public schools, and (2) mid-level privates that offer lots of merit aid.

The calculation is entirely different for those at the bottom end of the economic spectrum. If you are a single mom who works at Wal-Mart, a school like Harvard or Stanford might well actually be the cheapest option since they have the resources to meet 100% of financial need through grants. Whereas less affluent private schools and public schools might well expect loans and work study to fill in the gap.
Last edited by texasdiver on Wed Apr 07, 2021 4:34 pm, edited 1 time in total.
DIFAR31
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Re: Anyways to improve financial aid?

Post by DIFAR31 »

caradhast wrote: Wed Apr 07, 2021 4:03 pm Its from a school I have never heard of but if they are accredited, I'm sure its fine.
Yeah, I wouldn't be so sure.
livesoft
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Re: Anyways to improve financial aid?

Post by livesoft »

texasdiver wrote: Wed Apr 07, 2021 4:31 pmWe chose to take a different path.
It's always fun to see "history" repeat itself with every new class of parents of future college students, isn't it? Just like the plot of horror movie everybody knows what's going to happen except the cast of characters in the movie.
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TomatoTomahto
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Re: Anyways to improve financial aid?

Post by TomatoTomahto »

TallBoy29er wrote: Wed Apr 07, 2021 12:56 pm Was being a kid always this stressful? "No sports with your friends DD, you have to get to your job, then homework, then bed." Rinse repeat? When do kids get to be, well, kids?
I don’t know... both of my kids played travel hockey and school sports, had GFs and friends, one of them had a job, etc. One went to Yale and the other to a top 50 liberal arts school. Yes, they worked hard, but that’s not a bad thing.
I get the FI part but not the RE part of FIRE.
I-Know-Nothing
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Re: Anyways to improve financial aid?

Post by I-Know-Nothing »

oldfatguy wrote: Wed Apr 07, 2021 4:19 pm
caradhast wrote: Wed Apr 07, 2021 4:03 pm Appreciate all of the advice in here. Right now the highest assistance offer he has is 37k total and as he goes from a high school freshman to senior that offer will go up. Its from a school I have never heard of but if they are accredited, I'm sure its fine. Other name schools have lower offers but we are learning on how to optimize based on their formulas to increase the offer.
How does he have any financial aid offers if he is a freshman in HS? :confused
Right? If a high school freshman already has multiple financial aid offers for college, something is seriously wrong. This whole thread is very odd to me.
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SmileyFace
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Re: Anyways to improve financial aid?

Post by SmileyFace »

I-Know-Nothing wrote: Wed Apr 07, 2021 5:13 pm
oldfatguy wrote: Wed Apr 07, 2021 4:19 pm
caradhast wrote: Wed Apr 07, 2021 4:03 pm Appreciate all of the advice in here. Right now the highest assistance offer he has is 37k total and as he goes from a high school freshman to senior that offer will go up. Its from a school I have never heard of but if they are accredited, I'm sure its fine. Other name schools have lower offers but we are learning on how to optimize based on their formulas to increase the offer.
How does he have any financial aid offers if he is a freshman in HS? :confused
Right? If a high school freshman already has multiple financial aid offers for college, something is seriously wrong. This whole thread is very odd to me.
Maybe all the rest of us have been doing it all wrong and the OP has some secrets to share!
texasdiver
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Re: Anyways to improve financial aid?

Post by texasdiver »

livesoft wrote: Wed Apr 07, 2021 4:40 pm
texasdiver wrote: Wed Apr 07, 2021 4:31 pmWe chose to take a different path.
It's always fun to see "history" repeat itself with every new class of parents of future college students, isn't it? Just like the plot of horror movie everybody knows what's going to happen except the cast of characters in the movie.
Same for pretty much every other big step in life like home ownership and retirement. You have to do it yourself before the implications really sink in.
ZMonet
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Re: Anyways to improve financial aid?

Post by ZMonet »

This is extreme but if you can get your income under $26k then your expected contribution would automatically be zero.

I'll second and third the question of how does your son already have a scholarship offer, and a set amount at that? I think it was crazy that kids in junior high were being given athletic scholarships from colleges, but I didn't know that had now gone into academics as well!
getthatmarshmallow
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Re: Anyways to improve financial aid?

Post by getthatmarshmallow »

The best way to get merit aid is to be in the top 20% of admitted students at a university or college with reasonably deep pockets. They will want that student because it makes them look good, and they'll pay because they know that student is likely considering other, more namebrand options. One I hear often in this context is Vanderbilt, but the strategy is basically the same anywhere -- be the star.

I'd bet on academics over extracurriculars any day of the week, but that's my strength and odds are good that my kids will be better served by pursuing AP courses than trying to get a bassoon scholarship or a crew scholarship. My history is now 20 years old, but I spent high school taking AP classes, playing in all the bands, orchestra pit for the musical, competing in a non-scholarship sport, and usually about 10-15 hours a week of a part time job, and my total education cost, including the doctorate, was $18K in Stafford loans. (Parents were broke; private U was generous.)

Merit scholarships are harder to come by now, but your best strategy is still having a bright hardworking kid who is well-rounded.
cshell2
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Re: Anyways to improve financial aid?

Post by cshell2 »

ZMonet wrote: Wed Apr 07, 2021 6:32 pm This is extreme but if you can get your income under $26k then your expected contribution would automatically be zero.
This is what I do. My gross is only about 50K, so it's not ridiculously hard. Maxing my 401K and HSA get me way past the limit. It's actually 27K now and after the FAFSA changes next year effective for the 2023-2024 school year will be going to a percentage of the federal poverty level 175% of FPL for married couples, and 225% for single parents. For me, single with 2 kids that's something like 54K alone. :shock:
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

I-Know-Nothing wrote: Wed Apr 07, 2021 5:13 pm
oldfatguy wrote: Wed Apr 07, 2021 4:19 pm
caradhast wrote: Wed Apr 07, 2021 4:03 pm Appreciate all of the advice in here. Right now the highest assistance offer he has is 37k total and as he goes from a high school freshman to senior that offer will go up. Its from a school I have never heard of but if they are accredited, I'm sure its fine. Other name schools have lower offers but we are learning on how to optimize based on their formulas to increase the offer.
How does he have any financial aid offers if he is a freshman in HS? :confused
Right? If a high school freshman already has multiple financial aid offers for college, something is seriously wrong. This whole thread is very odd to me.
We are using the raise.me website. You fill out activities, enter grades, and follow colleges and they give you financial aid. You can start as a HS freshman and it helps to guide you to what generates the most financial aid. Essentially we are using the site to figure out how to get the most aid which then can be used to leverage in negotiations.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

If I did this right, there should be two images


Image

Second:
Image

The first one shows which colleges are offering aid as of now
The second one shows how some of that aid is determined giving us ways that he can earn more.

Right now we are pretty much following every school and as he gets closer to graduation, that list will be pared down.
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caradhast
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Re: Anyways to improve financial aid?

Post by caradhast »

Because it may help others, here is how that one particular school is structured:
$900 for each A, Max 16.2K
$450 for each B, Max 8.1k
Perfect Attendance, $250 per year
Take an AP or IB course, 2K up to 20K max
Take an honors, 1K up to 10K max
Extracurricular $250 for each non-sport, max 2.25K
Leadership role in extracurricular, $400 each, 3.6k Max
Community service, $10 per hour, 2k Max
1K for PSAT score of at least 1090
6k for SAT score of at least 1130
$750 for receiving national honor society member
$750 for receiving Boys State from American Legion
$750 Robotics completion
$750 Eagle Scout
$250 College Fair
2k Visit Campus
$100 Virtual tour
$500 virtual information session
and a few other misc ones.
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