Financial Aid

Question: As a non-custodial parent I’m trying to figure out how I will be able to determine or estimate the amount of my EFC. My daughter is just a high school sophomore now, but I would like to start preparing. How is the EFC calculated for the non-custodial parent using the CSS profile? Is this done in two parts–one EFC for the custodial parent and one EFC for the non-custodial parent?

As one financial aid expert has put it, “College financial aid officials don’t want to be social workers.” What that means for you is that they will compute your daughter’s EFC based on a bunch of potentially complicated factors (more on that in a minute) and then give you the bottom line–a total. You and your ex must then duke it out to determine who pays what. In other words, there’s nothing that says, “This is Dad’s official share, and this is Mom’s.”

When a college uses the CSS Profile and makes financial aid determinations for children of divorced or legally separated parents, there are a number of complex issues that are evaluated, and each college has its own way of looking at the data. For instance, admission folks will consider whether the custodial parent is remarried and, if so, the stepparent’s income will go into the mix. They may look at things like how long you’ve been divorced, if you have been negligent with child support, what your assets are (some colleges include home equity; others don’t; many will “cap” the amount of equity they consider, if your home is worth a lot), whether or not you have other children, etc.

Thus, you can play with the EFC calculators that are offered on the College Board Web site (and elsewhere), and you can plug in both your ex-wife’s income and your own under “Adjusted Gross Income” to get a very rough sense of what the family total will be. However, the real bottom line could end up being substantially different, due to some of the issues named above or other similar ones.

One common scenario is this: if your wife is remarried to a spouse who makes more money that you do, this will raise the EFC. However, if the stepparent won’t be contributing to your daughter’s college costs, then you and your wife will still have to shoulder that extra burden. The two of you will need to work out a figure for each to pay that you both deem to be fair. Obviously, for many split families–who can’t agree on what movies Junior is allowed to see on a Saturday night or on when he is old enough to get a tattoo (I vote for 50)–this can be a hot-button question.

On the other hand, for some parents, it’s pretty straightforward–they either divide the payments in half or pro-rate them based on household income.

Since your daughter is just a sophomore, she may have no idea yet where she plans to attend college, but if there are already a couple front-runner schools, you should feel free to make phone appointments with financial aid officers to get at least a sense of how a particular school makes its aid decisions for the children of divorced parents. (Since you’ve got plenty of time, don’t call when these folks are inundated with the needs of newly admitted high school seniors; your best bet is to wait until early summer when the rush dies down.)

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Question: Is it true that highly selective need-blind schools can “tweak” their financial aid packages if they want an applicant who is desirable for the usual merit things (athletic abilitity, URM status, musical talent, etc.)?

Different colleges have varying policies, and we can’t speak for all of them, but this “tweaking,” as you aptly name it, is not uncommon. Among themselves, admission and finaid folks often use the term “sweetening the pot.” What this means is that they skew the balance of grant and loan in a financial aid package so that the more sought-after students get a bigger chunk of the former and less of the latter.

However, when the time comes, if your child receives an aid package that seems “untweaked,” don’t assume that he or she is not a highly desirable applicant. While this could be the case, it may also have more to do with the institution’s aid practices. Regardless of the award, it rarely hurts to appeal it, if you feel you can–or must–do better. Just make sure that in doing so you act appreciative for what you’ve received already and not merely entitled to more.

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Question: I am a single female parent with no savings to help my son go to
college. He has been accepted to a few of them. Where can I get help?

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Question: I am a mother of 3 at the age of 24. I go to a community college in Denver, CO, and would like to know if there are any programs to help me pay for my nursing degree? Also I am the first in my family to go on to college.
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Question: When you are applying for financial aid from an institution such as Yale what assets are looked at in the process in addition to income? Does a parent’s 401k retirement plan and the asset value of a home fiqure in the ability-to-pay equation?

Colleges approach financial aid with different “methodologies,” and you should feel free to ask officials at each school on your list to explain their process. Many institutions, like Yale, that require the CSS PROFILE will consider home equity when making aid decisions. However, most will put a “cap” on the amount of equity that figures into an aid calculation. That cap is typically the household income multiplied by three.

Colleges will also review all assets listed on your finaid forms, but–says one of our financial aid advisors–”assets typically affect the bottom line far less than most people believe.” In other words, it’s income that will make the greatest difference in the size of an aid package. If a family has large assets, they are generally reviewed in conjunction with other family financial information. For instance, if a student has older parents who are at or near retirement age and don’t have a pension or retirement fund, then their assets will weigh less heavily on an aid decision than they might under different circumstances (e.g., younger mom and dad with a whopping 401k).

Speaking of 401k plans, our expert also said that the accumulated assets in your 401k won’t be considered when aid decisions are calculated; however, once your child is in college, then the amount of income you defer each year will be counted as untaxed income, which will definitely affect aid awards.

Keep in mind that any extenuating circumstances that don’t fit on those nasty little lines on the financial aid forms can be explained in a cover letter to financial aid officers. You can also make a phone or in-person appointment with the finaid folks at the colleges on your list if you have questions about how your aid application will be reviewed or even about how to report certain situations. Once an aid package has been determined, there is often wiggle room, if you feel that it doesn’t meet your needs. When appealing aid packages, remember that–as with most things in life–you catch more flies with honey. Act appreciative, not entitled!

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Question: I am a parent who is wondering if a college may cut the amount of the aid package offered to a student who applies ED knowing that, once accepted, the student is bound to attend? Or do they reward ED by offering more early?

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Question: I have heard of “First Generation” scholarships, and I am interested in one. Do you know where I could find information on those types of scholarships?

You may be thinking of the Coca-Cola Foundation First Generation Scholarships that go to students who are the first in their immediate families to attend college. About 400 colleges in 31 U.S. states participate, and here are the ground rules straight from the Web site:

Students interested in a Coca-Cola First Generation Scholarship should contact the student aid office at any one of the participating schools. To be eligible, the student

(a) must be the first in his or her immediate family to go to college,
(b) must demonstrate need,
(c) be accepted into full-time enrollment at the participating school of choice,
(d) possess a record of community service, and
(e) once selected by the college or university as Coca-Cola First Generation Scholarship recipient, the student is required to attain and then maintain a 3.0 academic record.

For more information about which schools take part, go to these sites:

http://www2.coca-cola.com/citizenship/education_firstgenerationscholars.html

http://www.youthdevelopment.coca-cola.com/ach_landing.html

There are some other institutions (e.g., the University of Colorado) that have their own programs for First Generation students, but various restrictions may apply. For instance, CU limits its scholarships to applicants who hail from certain minority backgrounds or from underrepresented counties in Colorado. If you are interested in a particular college, be sure to ask financial aid officials if there are any special considerations for students whose parents do not hold a bachelor’s degrees.

A couple other points to keep in mind: While much of the scholarship money for First-Generation students seems to be earmarked for those who also have financial need, being “first-gen” can be a plus in the admission process, even if your family is fairly well off. Many of the most elite institutions are eager to diversify their campus communities by adding such students to the mix. (Though typically, the most competitive schools are particularly keeping an eye out for applicants who come from true blue-collar backgrounds, rather than for those whose parents may not have college diplomas hanging on the wall but who have been successful in professional fields like real estate, insurance, computer technology, retail, etc.)

Also, a student officially qualifies as “First Generation” if neither parent holds a bachelor’s degree, even if both have earned an associate’s degree and may be only several credits shy of a bachelor’s. Usually, if a student lives with just one parent, it is that parent’s educational background that determines whether the student is considered First Generation.

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Question: I need a PLUS loan for son’s last semester of college, but my credit report is not good. Can I get one with bad credit?

If your credit is bad, you will only be able to get a Federal PLUS Loan by finding a credit-worthy co-signer (grandparent, aunt, uncle, etc.).

However, did you know that, when a parent with bad credit is turned down for a PLUS loan, then the student/child is eligible for an unsubsidized Federal loan (in his own name) of up to $4,000–even if he has other loans already out in his name? You need to speak to the financial aid officers at your son’s college to get more information about how to proceed. We don’t know if the $4,000 (which is the absolute max allowed in such cases) will go as far as you need it to, but since you’re only talking about one semester, perhaps it will do the trick.

Good luck to you. We hope this works out for you.

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Question: I am 17 and have left home due to family problems. I have not legally emancipated myself yet, but I am self-supporting and want to know what my options are concerning government grants, tax breaks or anything that will make my final year in high school a bit easier.

Our expertise is in college admission and we don’t feel that we can give you a responsible answer about all of the financial issues you may need to understand as you face a senior year on your own. However, when it comes to college and independent students like yourself, we can offer some advice about financing your college education.

As you may know, there are two main types of financial aid: need-based aid, which is tied to your family income and assets (and that includes your parents–even if you don’t live with them–more on that in a minute) and merit aid, which is money for college given to you because a college is trying to recruit you for any number of reasons (grades, class rank, athletic ability, special talents, etc.). We’ll explain here how both apply to your non-traditional situation:

Need-based aid:

Most students qualify for some sort of need-based aid if their family income is below roughly $120,000 per year. If it’s well below that, you will probably qualify for a lot of aid. However, even if you go to court and emancipate yourself legally from your parents, the vast majority of colleges will still count their income when they determine if you qualify for need-based aid (and how much you’ll qualify for). If your parents don’t have a lot of money (and if you’re on decent enough terms with them that they will help you complete the financial aid forms) then that will be good news for you.

If, on the other hand, your parents can afford to pay a lot towards your education but are unwilling to do so, then you will have extra hurdles to scale. We consulted with one college financial aid expert who told us that there are no simple solutions. Even if a court of law was to proclaim you independent of your parents, the majority of college aid offices would not. She thus advises you to proceed on a school-by-school basis. That is, once you compile a list of the colleges you’d like to attend, you should then contact financial aid personnel at all of them and explain your situation. (This isn’t quite as time-consuming as it sounds. That is, you should summarize your situation in one e-mail that you send to multiple places. You can then follow up with the colleges that seem encouraging.)

Some colleges may be willing to take your extenuating circumstances into consideration, while others definitely won’t. Our expert tells us that public colleges tend to be more flexible here than private ones. That might sound surprising, because often it’s the private schools that are more able to tweak the rules than the public institutions (and they often have more money to give away), but—in this case—you may find that the opposite is true.

Ordinarily, a student is not considered “independent” from a financial aid officer’s point of view unless he or she is at least 24 year of age or has satisfied several other conditions (e.g., has completed military service, is an orphan or ward of the court, or is married). In seeking an exception to this policy, you should be prepared to provide as much documentation as possible to validate your claim of independence. Tax records, pay stubs, rent and utility receipts, affidavits from employers, friends parents, former teachers, etc. can all help your cause. Be prepared to reveal personal information about yourself that you might find intrusive. If you endured particularly difficult conditions at home (e.g., physical abuse) that led to your early independence, you should explain this as candidly as possible and provide as much documentation as you can. Nonetheless, expect an uphill battle and inconsistencies among the different colleges or universities you query.

Keep in mind that while your relationship with your parents appears to be a troubled one, perhaps if they understand that you cannot receive any government aid whatsoever without their participation in the completion of your aid forms, they may be cooperative and provide the information (or even the funding) that you need. College financial aid officers may also help you obtain loans to cover what is known as your “Expected Family Contribution,” even if your parents refuse to help out. However, in order to calculate this “EFC,” your parents will have to work with you to complete the Free Application for Federal Student Aid (which you can get at your school or online at www.fafsa.ed.gov ).

Merit Aid:

If you are not on speaking terms with your parents or if they refuse to fill out financial aid forms or to contribute to your college costs, then your best bet may be merit aid. Some colleges have a lot of it (that is, they offer a number of full scholarships that even include room and board) while other colleges give only small amounts that won’t put much of a dent in your bills. Some give none at all. Unfortunately, there’s no easy way to quickly identify which colleges offer what. Your guidance counselor may be able to be of some help there. In general, however, the best way to get merit aid (unless you qualify for an athletic scholarship) is to apply to colleges that are eager to recruit you. If you are a member of an underrepresented minority group (generally African-American, Native American or Latino, but it depends on the college) then you will be a desirable recruit at many colleges that have primarily Caucasian student bodies. If you are not an underrepresented minority, then your best bet for merit aid is to apply to private colleges (and sometimes state schools, though they tend to have less merit aid than private colleges do) whose “admitted student profile” is not as good as yours. In other words, if you are an “A” student with 1300 SATs, pick places that normally admit “B” students with 1100 SATs. Or if you are a “B” student, look for less competitive colleges that typically attract “C” students, and so on.

The most important thing to realize is that, when it comes to going to college, even if you are on your own and struggling, you will have options and you shouldn’t rule out a college education. Obviously, the better your grades and test scores are, the more options will arise, but there will be a place for you somewhere regardless. We wish you luck with what is surely a stressful situation. Be persistent and patient, and you may get the good news you’re looking for.

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Question: I am in 9th grade and wondering what Ivy League schools look for when they give out scholarships? Do sports and other extracurricular activities count as much as grades and test scores?

The first thing you need to know is that all scholarships awarded by the Ivy League are “need based.” That means that the only students who receive Ivy League financial aid are those whose families cannot afford to pay full freight. However, even many students from “comfortable” middle-class homes receive some sort of scholarship assistance due to the high price tag attached to these schools.

The way Ivy League colleges operate is that they first evaluate their applicants based on their qualifications. In order to pass muster with an Ivy League college you have to maintain tip-top grades (usually close to a straight-A average), with the vast majority of your classes selected from the toughest ones available to you. (Admission officials don’t penalize you if your school doesn’t offer any AP or even honors classes, but they do like it when you turn to a local community college or find other enrichment opportunities, if your own school isn’t very challenging.)

Your SAT I and II scores are also very important—probably more important than most admission folks are willing to admit. In fact, College Confidential offers an “Academic Index” calculator that is similar to the system that Ivies uses to compare candidates. You can read more about this at Academic Index, but as a freshman you probably don’t have test scores yet and won’t be able to try it.

Finally, your essay(s), recommendations, and extracurricular activities are all evaluated from a more subjective standpoint (i.e. no formulas used here). Not surprisingly, the Ivies receive stacks of applications from amazing students who excel in a wide range of areas. Typically, an Ivy applicant has to be more than a French Club president or yearbook business manager. The Ivies are looking for student government presidents and yearbook editors-in-chief. Moreover, they’re also seeking students with unusual accomplishments—not just the same old, familiar high school stuff, however impressive it may be. Thus, applicants who have published books, danced on Broadway, or founded a national charity may get extra attention at decision time, even if their grades and SATs aren’t quite up to snuff. (They still have to be good, of course.) Not surprisingly, recruited athletes also get special attention (and some slack) when it comes to transcripts and test scores.

Applicants are never evaluated in a vacuum, either. That is, admission officials pay close attention to such factors as socioeconomic background and a range of other extenuating circumstances that a student has had to face.

Now, to get back to your original question … once admission officers have “graded” a student, they put together the final list of those they wish to admit. In most cases, each of these admitted students is then awarded what that college believes is enough financial aid to attend. For some students, this will be the entire cost of tuition, room and board, and perhaps even money for transportation and books. For others, it will be nothing. The strongest candidates don’t get more dough than the more borderline ones. It’s all based on family finances.

There are some variations to this system. For instance, a college that is not “need blind” will make some “fine tuning” decisions about candidates based on their ability to pay, but that doesn’t happen until the very end of the evaluation process, and a very strong applicant—however poor—will most likely be admitted and receive a generous scholarship. Some colleges are “need blind” for U.S. citizens and permanent residents but not for international students.

Thus, the only way to win a scholarship from an Ivy League college is to get yourself admitted. This means being an exceptional student with an exceptional list of accomplishments as well. Even then, there is a certain element of luck involved. Many highly qualified candidates are turned away each year, often with no apparent reason. You also have to come from a family with “demonstrated need.” Thus, the bad news: No matter how smart or talented you are, you will not get a scholarship from the Ivy League if your parents can afford to pay your way. The good news, however, is that–if admitted—you should not have to pass up an Ivy education for financial reasons, because the colleges promise to meet your monetary need, no matter how high.

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