What fafsa loopholes did you find with ER?

[AnIntentionalRoad]

Quote:

Originally Posted by fh2000 Many ER board members may be similar to me, with enough assets and income so our EFC is $99,999. DD got in some nationally ranked 20 private schools but received no aids other than $5,500 stafford loan. She decided to go to a relatively high ranking UC instead. The cost of UC is 1/2 of those privates. So, maybe if DD applied for much lower ranking private schools and got accepted, she might get some aids. When DS applied, he went to UCs only. No privates knowing he won't get anything. So, the above known fact is not true in our case.

This post really isn't for you, since you have already been through the process, but for those with pre-college-aged kids.

Two things I recommend:
- Do good research on not just the ranking of schools but their financial awards. One way to do this would be to figure out per capita endowment for schools you are interested in.

- Make sure you write an appeal letter as soon as you get your award. Let them know how much DD/DS wants to attend their school but wouldn't be able to given the current award. Then describe any material circumstances or special qualities of DD/DS again.

School selection based on typical size of awards and appealing awards are the key, especially if your kid was good enough to get accepted but didn't get the award package you needed.

Some great schools will award merit with a 27 ACT but others want a 32. Look at the average scores of incoming students to get a feel for their selectivity. If you DD/DS has less than a 27, it gets more challenging and an inexpensive state school may be the best choice.

My main point here is that people shouldn't write off expensive private schools because it is the net cost that matters, not the sticker price. I know a kid that was planning to go to state school but was convinced to apply at Northwestern and got accepted--with a lower net cost than the state school he would have went to. And it was merit aid and work-study.

Of course every situation is different but it is foolish not to investigate.

Good luck.

[fh2000]

I went back to look at my 2 kids' UTMA account balance. This is what I saw. We started to put $200 each month into our kids' UTMA accounts ever since they were born. As we increased our earnings, we started to increase to $400, later $600 each month for each kid.

Around the end of 2007, I got laid off, and we stopped contributing to their accounts. By 2012 when DD began college, and this fall DS will attend college, both of their accounts are just above the 4 year UC cost. The total of our actual contributions were just about 1/2 of that. So, by staying in the market sustaining 2 major crashes (2000, 2008), we still get 1/2 of their college cost free for us.

I guess this is like 401K contribution. Start early and put everything in index funds, you won't go wrong.

[BellBarbara]

I have some information to share. Background: two daughters in expensive private colleges in NE. First daughter - we were working - zero FA. We paid about 53K per year - we did make her take out loan for one semester which was about 20K.

Fast forward to second daughter in BC - cost about 57K per year. Year one - she got 2K (we were working). Year 2 - she got 5K (we worked about 6 months of that year). Just now we found out she got 30K grants plus 6K in loans for year 3. Unbelievable!

Now, I don't think it's 100% based on our not working - she is an excellent student and is the president of a prestigious club/service org on campus.

So based on this I would say ER, spend down the 529 money, make sure your student works hard. We are sort of shocked. If the same thing happens for her next year we may be able to leave her without loans, and pay off the balance on daughter one with the money we put away.

Happy dance. :-)

[daylatedollarshort]

Quote:

Originally Posted by BellBarbara So based on this I would say ER, spend down the 529 money, make sure your student works hard. We are sort of shocked. If the same thing happens for her next year we may be able to leave her without loans, and pay off the balance on daughter one with the money we put away. Happy dance. :-)

Good to hear that worked out for you. Thanks for the update.

[LOL!]

Quote:

Originally Posted by fh2000 I guess this is like 401K contribution. Start early and put everything in index funds, you won't go wrong.

I wanted to comment on this previous post of putting things into the UTMA. One might have done better with regard to financial aid just putting them into your own (i.e. the parents) taxable account. Sure, the kids get a little tax break for UTMA (especially before kiddie tax law), but their assets count more against aid than the parents' assets. It is something like 25% versus <6% of saved amounts. Basically, the aid formulas assume all of child's assets can be used to pay for college.

Anyways we just saved for our retirement in tax-advantaged and in taxable accounts. Our kids (two in college this upcoming semester, I'm retired) got no aid whatsoever. But by now, the portfolio grows every year enough to fund college expenses, so just save lots for retirement. If you are wealthy, do the 529 plan thing for the tax break, but only after doing the retirement thing.