teen persuasion wrote: ↑
Fri Oct 11, 2019 9:38 am
Every year is different. When DD1 applied for college, we were a family of 7, single income low enough we qualified for free lunches. Easy to get auto EFC = 0, so full PELL, nearly full TAP, SEOG, subsidized loans, there was some new federal grant, SMART?, that added a few $k (it rapidly disappeared, only lasted 2 years maybe) and the rest was merit scholarships. Her first choice school did not meet her full need, they gapped her an amount = 50% of our HHI. She appealed, but they suggested only parent loans, or that she'd be happier elsewhere. She was happy at her second choice school, and we loved that it was closer to home. First lesson learned - staying in state is cheaper, if only because of transportation costs and state grants for residents. Second lesson - have multiple options, every school is different in how aid/scholarships are distributed.
DS2 had been awarded a partial scholarship to a different college as a HS junior (not even applied or accepted to the college). He did later apply there (and elsewhere), and that's when we learned how these types of scholarships work - they are basically like a % off coupon from a store trying to get you to shop there, handed out somewhat indiscriminately, most are never used. When DS2 actually got a financial aid package, he was awarded merit scholarships that were better than the Jr year scholarship, and they didn't combine - you just chose the best one, obviously the higher $ value. He got a slightly better FA package at another good school, but he'd have preferred the first, so he contacted the first school to let them know that money might just make the tipping point for him despite his desire to attend school #1 - could they match the deal from school #2? They asked to see the offer, he faxed it, and they quickly responded with a BETTER offer. Lesson #3 - you can sometimes negotiate successfully, if the school really wants you.
Living on campus is expensive. Eventually each kid figured out some different way of reducing the costs. For some, it was moving to cheaper dorms or school apartments, or entirely off campus. Every school is different - sometimes all room charges are the same, regardless of how nice/convenient or crappy/distant the dorm is. Some have a variety of different options and prices. Just moving out of a box room into a suite (with kitchen) with friends can be a saving, if you can drop meal plan and cook. They also preferred apartments so they could stay year round, and work summer jobs (few jobs in our rural area) on or off campus.
At some point while each was in college, once they moved out year round and earned enough money, they became independent of us for tax purposes. But colleges continue to view them as our dependents (until they turn 24, get married, have their own dependent, join the military, or go to grad school), so you always have to view the "independent" question from who is asking. This affects things on the FAFSA for younger kids - I didn't realize immediately how it affects the family size question. When doing the FAFSA for DD3, I didn't think to include DD1 or DS2 in the family size, because they were completely independent of us by then (supporting themselves, living away from home). But the FAFSA details walk you thru essentially the "are you a dependent" gauntlet for them. We could include them as family dependents, by FAFSA dependent definitions. That allows for a larger Income Protection Allowance which reduces your EFC. By this point, the auto EFC = 0 AGI limit had dropped from $32k to $23k, so no auto EFC = 0 for us now, but we could get to a calculated EFC = 0 for a while.
DD3 and DS4 have both chosen state schools over the private schools the older 2 chose. The cost is probably half, but the shift is all in tuition. Room and board is actually more than tuition and fees at the state schools. Then there's the breakdown between tuition and fees. Actual tuition is under $9k/yr. Fees are another $6 and rising. When the state restricts schools on raising tuition, fees go up instead. Fees are a gray area - they may not count for things like AOTC.
Part of our strategy with the FAFSA revolved around getting either auto EFC = 0, or SNT to avoid reporting assets. We can get our AGI in range by contributing to retirement accounts (which we planned to do for other reasons, anyway), but there is another condition you must meet as well. For us, the free/reduced lunches met the other condition. Qualifying to file either 1040A or EZ is another common way to qualify, but we have an HSA, which requires the 1040. So long as our income to family size ratio was in range, we qualified, but as the family shrunk and my part-time income increased, we eventually no longer did. The last year we qualified was when DS4 was a HS Sr, 2015-16. This carried over for the first 3 years of college for him (FAFSA asks if anyone qualified in year x or x+1, so the first year asked if either 2014 or 15, then 15 or 16, then 16 or 17). His last FAFSA was the first time we had to be concerned about reporting assets, and the asset protection amount has been shrinking dramatically over the years (it's tied to parent's ages, higher for older parents). When we first did the FAFSA for DD1 (in our 40s) the asset protection amount for us was enough to shield a decent EF, $40k-ish. Last year it was $13.5k. I just saw the new chart for this year, it's $6k-ish. That's crazy. Anyway, I got creative when filing the FAFSA - assets are reported as of the day you file, so I timed it, and I paid every bill owed early, and I contributed to our Roth IRAs earlier than intended, to get our number low enough. We have no taxable investments to speak of, everything is in retirement or HSA (which we haven't been reimbursing ourselves from, so it can act as an invisible EF). With the tax changes, no more A or EZ forms, there was question on how this test condition would now work. They've developed some set of conditions based on schedules filed/not filed, and certain lines are ignored. It's clumsy, but we'd be able to qualify again for DS5, yay! Until the next changes.
We haven't had to make any withdrawals, any payments we've made have been cash flowed. Scholarships, grants, the kids' earnings and the kids' loans have mostly covered things. So far, the loans haven't been an undue burden. DD1 paid her loans off in a few years. DS2 is taking a slower route, but he recently did a year at Americorps which gives him a chunk of $ to put towards either more education or towards his loans. We talked thru the details and it sounds like paying down the loans is the best course.
There's one more perk to being eligible for free/reduced lunches: you can get waivers for the fees to take the SAT. You have to ask the HS guidance office for the waivers before ever registering for the SAT (learned the hard way with DD1). Having that waiver also makes you eligible for college application fees waivers frequently (not every school, but many). This reduces the cost of applying to multiple schools in hopes of receiving better FA packages or scholarships.
Scholarships are the key. You kids have to be not only good academically, but well rounded: active in clubs, sports, music, community. Start young to get them curious and involved.