Color of Money Live: Finding financial aid for college

Mar 28, 2019

Send in your questions to Washington Post nationally syndicated personal finance columnist Michelle Singletary.

This week, Michelle is joined by Mark Kantrowitz to discuss his book "How to Appeal for More College Financial Aid," which was the book club pick for March.

“Knowledge isn’t power. The right knowledge is power.”

Stay informed.

Read & share Michelle Singletary’s Color of Money Column on Wednesdays and Sundays: https://wapo.st/michelle-singletary

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So glad you could join me today. 

Topic today: Paying for college

And of course anything else you want to talk about when it comes to your money. 

Let's get started.

How do I join the discussion today at noon regarding financial aid

You are here if you sent this question. This is a text chat. You simply write your question and we see it and answer back.

How much family income is too much to be considered for Financial Aid relief

There is no explicit income cutoff on eligibility for financial aid. Financial aid eligibility depends on financial need, which is the difference between total college costs and the expected family contribution (EFC). There are two main ways that students have demonstrated financial need. One is by having a lower EFC. The other is by attending a higher cost college.

The number of children in college at the same time can have a big impact on aid eligibility. For example, increasing the number of children in college from 1 to 2 is like dividing the parent income in half.

So, you should always apply for financial aid, even if you got nothing other than student loans last year. 

If you want an explicit income cutoff, perhaps $350,000, but only if you have only one child in college at a time and that child is attending an in-state public college. 

Do you have a list of reputable debt counseling Companies resources

Look for a company that is non-profit. Go to debtadvice.org and you'll find consumer credit counseling agencies with membership through the National Foundation for Credit Counseling (NFCC). 

Hi, I would like to know if the 529 funds can be used for workforce development classes such as certifications? My husband and I are planning to contribute but do not know much about this option. Please advise!

529 plan money can be used tax-free for degree or certificate programs and for continuing education programs, but not necessarily for workforce development classes. There are, however, pending legislative proposals to allow it. 

I’m really interested in doing your financial fast, but I’m finding it hard to find a time that we don’t have a trip or some other cost-intensive event already scheduled. Is it still worthwhile to fast if you know you’ll have to take a couple days off? I’m sure this is part of the challenge, but I would really like to try it as long as I don’t have to cancel any long-standing plans.

There is never a good time for this fast. So jump in - now. I used to purposely schedule the fast during a month with a major holiday or the summer to get people to see that even with various things going on they can still spend less. 

So if you have a trip already planned when you go try to spend far less than you had budgeted -- if you even have a budget.

For example, a couple came to me in debt but who had "saved" for a cruise (Crazy, I know). They couldn't or wouldn't cancel so I told them to still do the fast but that they couldn't buy anything extra during the cruise. No excursions, no uncharge to eat at a better restaurant on the cruise, etc. 

It worked. They didn't spend anything more and came back energized to get their finances together. 

This fall, my son is looking to attend the same institution my daughter is currently attending. Even though we would potentially have two in the same school at the same time, they gave him a lower financial aid package than my daughter got two years ago, even though his credentials are better (my suspicion is that this 70k per year engineering college was trying to level the female/male ratio). That said, I already appealed based on a job loss late last year and received a paltry $1,000 addition to his package. Can I or should I appeal again?

Read Michelle's column: Do’s and don’ts in appealing the student aid awarded to your college-bound child

One applies for financial aid on a year-by-year basis. The financial aid in one year may differ from the financial aid in a previous year, due to differences in the family's financial circumstances. Also, siblings may have difference income and assets, which can affect the student contribution portion of the EFC.

Need-based financial aid is based on financial need, not academic and other credentials. 

Colleges can make adjustments due to a change in income. How they do so depends on the college. Some will substitute an estimate of income during the current year for the prior-prior year. So, if you lost your job last year but quickly got a new job, the adjustment might be based on the difference in income, and not really on the job loss. Generally, a $10,000 difference in income leads to a $3,000 difference in aid. 

In response to your column today, I must confess that I spent almost all of my refund on a $193 concert ticket. My refund was just $250 because I carefully calibrate my withholding to minimize it. My retirement and other savings goals are on track, my emergency and life happens funds are well-stocked, and I have no loan, mortgage or credit card debt, so it's entirely appropriate for me to treat myself to this crazy expensive concert.

Read Michelle's column: What to do with your tax refund

Entirely okay to treat yourself when you've checked off all the boxes

Emergency fund - 

Life happens fund - 

Saving well for retirement - 

Got kids and savings enough or something for college - 

No credit card debt - 

No TSP or 401 (k) loan - 

Check the boxes and you're good to go for a treat. 

Love your chats! We have 2 monthly bills that will end for good in May ($300 for preschool and $275 car payment). After a couple of months of restocking the life happens fund, we’re struggling to decide where to allocate the money. Options are: my retirement fund. I have a 401 from a previous job but my Roth contributions have been lacking since I stopped working outside the home 4 years ago. Husband’s is on a state plan that will forever make me nervous as I’ve seen what can happen to those. Kids’ 529. 3 kids, all in elementary (3rd, 1st, k) in the fall. They have 529s but haven’t made regular contributions for 4 years. Car fund. My husband’s long paid off car is a ‘01 civic with 150k miles on it. Hoping the car will last many more years but is starting to have some maintenance issues (just had to put on new tires and battery). We’re leaning towards most into retirement and some into a (new to us) car fund, but am not certain.

When you have a windfall, which can include the end of regular expenses, the best advice is to save the money. For example, most people should first maximize the employer match on contributions to a 401(k). Then, contribute money to the children's 529 plans. For example, you could direct the car payment to retirement and the preschool savings to 529 plans. Also, set up an automatic contribution to the 529 plans so you don't forget to save. This will transfer the contribution from your bank account to the 529 plans automatically. Given that 34 states and the District of Columbia provide a state income tax deduction or tax credit based on contributions to the state's 529 plan, you might even get a small tax break as a result of your contributions. 

Ditto to what Mark said. And if need be shave a bit off to start the car fund. So three pots -- more in retirement, contribute regularly to 529 plans and start to build the car fund.

By the way because my husband and I consistently saved in our kids 529 plans for 20 + years we have enough to send them to college with no loans -- not for them or us. But this meant putting money away for them every single month. No breaks. 

I have 3 boys 9 and under. Where we live families throw ridiculous birthday parties. We can afford it and I'm happy to do it except I hate the number of presents the kids get. This year we tried something new. We threw one big party and told kids instead of bringing presents, to bring $5 (we said $5 total or $5/kid). The parents loved it and my kids loved getting money that they could use to buy what they actually wanted. The one drawback was that a lot of kids brought $10 - $20 for each of my sons, so they each got almost $300! I think next year I'm going to do the same and also request a can of food or something that we can donate to a food bank.

Perhaps you should deposit the extra money to a 529 college savings plan for each child? Giving the gift of college is becoming increasingly popular, especially since children with 529 plans are much more likely to enroll in and graduate from college. 

 

Read Michelle's column: The perfect baby gift? A small donation to a college fund.

So the Post's Miss Manners actually says we should not tell people what to bring or give as a gift -- even if it's for a good purpose or to reduce the "stuff" you get. 

When asked what shall I bring or give you could say, "No gift is required. We just want your presence." 

 

I feel dumb for even having to ask this, but I have had a number of jobs over the last 15+ years, and have set up a 401(k) at each of them. But then I haven't been great about keeping track of these different accounts and related paperwork. I am finally trying to consolidate everything, but I am in a position where I'm not 100% certain if I have an account from one former employer, and if I do, what company would manage the account. To complicate things further, the company has been bought by a much larger organization, and no one I worked with is still there. Any thoughts on how to find this ghost account?

Call the HR office at each past employer. Then, use a Rollover IRA to consolidate the 401(k) plans into one account. The brokerage firm you choose for the Rollover IRA can help you with the paperwork. 

My wife and I live frugally, but when we see peers spending more freely than we do, she wonders if we are being too stingy. I always say that even affluent people may be deep in debt despite appearing to have plenty of money, but can you cite any statistics to back me up?

The Federal Reserve reported that year that 40 percent of households, including people with good income, don't have enough saved to take care of a $400 financial emergency.

But tell your wife for me that I work with a lot of families with six figure incomes and many are broke. If they lost even one paycheck they are in deep trouble. 

You cannot look at what people wear, drive or the home they live in to determined if they are living better than you. Many are living the American Dream on borrowed money and inside those nice homes is a lot of financial terror. 

Can you say this school, x, has offered more money for the student and can you offer the same or more to the student?

Each college has a different cost of attendance and a different financial aid budget. So, your net price will differ at each college. However, it doesn't hurt to ask one college whether they will match another college's aid offer, so long as you are polite about it and the two colleges are competitive. The college will want to see the financial aid award letter from the other college. 

Cornell University, for example, says that it will review financial aid award letters only from Ivy League colleges, Stanford, Duke and MIT.

Sometimes, the reason for a better financial aid offer is that one college had information about the family's special circumstances that wasn't available to the other college. For example, almost 200 colleges use the CSS Profile form for awarding their own financial aid funds, and this form has a question about special circumstances.

So, in addition to providing the college with a copy of the other college's financial aid award letter, be sure to tell the college about any special circumstances, such as changes in income from the prior prior year, unusual expenses (e.g., for a special needs child), changes in assets, and unusual demographic variables (e.g., parents enrolled in college, change in marital status, unborn children, changes in number of dependents, homelessness, etc.)

What is the best site to obtain scholarships? The schools don't provide many and there are so many sites out there that end up asking for money in the end and they end up a big waste of time.

I wrote an article on Savingforcollege.com on how to find scholarships for college. The top free scholarship search sites I list are Fastweb and the College Board's Big Future. I suggest searching at least two such databases, to give you confidence that you've found all the scholarships for which you are eligible. (There is a lot of overlap among the databases.)

Use only the free scholarship databases. Paid databases do not have any better information. Remember, if you have to pay money to get money, it's probably a scam. Never invest more than a postage stamp to get information about scholarships or to apply for scholarships. 

I am planning to pay a lump sum to Virginia plan for 8 semesters. Any reasons I should not do it?

Virginia allows an annual tax deduction based on contributions of up to $4,000 for couples who file joint tax returns. (There is no contribution limit for age 70 and older.) If the contribution exceeds this amount, there is carryforward for an unlimited number of years. So, you could make a lump sum contribution and claim the deduction in subsequent years.

Note that contributions above the $15,000 annual gift tax exclusion ($30,000 for a couple) may be subject to gift taxes or use up part of your lifetime gift tax exclusion. 529 plans provide superfunding, where you can give up to five times as much and have it treated as being given over a five-year period. So, you can contribute up to $75,000 ($150,000 as a couple) without incurring gift taxes. 

 

One thing I do to incentivize myself when I pay off bills is round down; so if I no longer have a $345 monthly car loan payment, I put $300 into a new car fund, and give myself that extra $45/month as a reward. (And when I did this I already had an emergency fund and no debt other than a mortgage, which I was paying off early.)

It this works for you great. But if you don't have a good emergency fund, life happens fund, not saving enough for retirement etc., I'm going to need you to capture that full amount you are no longer paying and direct it to the appropriate pot. 

Hi Michelle, I'm struggling with how to divide up our savings for projects now (ie next car, home renovations) with how much to put toward retirement (TSP, IRAs). Right now we almost max out our TSP, IRAs etc but then after bills, tithe, etc. have very little to save for more near term needs. I've been saving for the new bathroom (refuse to do a loan) for over 2 years and still don't have enough, my car is 10 years old, trying to keep it going, but no idea how long it will last so that will become a need at some point. Is it ok to put less into TSP, IRA in order to save for things we'll need sooner? Thank you. PS: We pay off credit cards every month, only debt is mortgage (and boy would I love to pay that off sooner, but same issue - nothing extra). We are 10-15 years out from retirement with close to $1M in retirement accounts. Really want to have house paid off before we retire but not sure how that can happen.

We all have limited funds and many funding needs. So, if you know you'll need a car and needed home repairs it's okay to shave money from other places as long as you are on track for the big dogs -- Retirement, college fund if you have kids and a well stocked emergency and life happens fund.

For example, my husband and I didn't max out in our workplace funds because we were also saving for the kids college fund. However, at the rate at which we were saving we have very adequate retirement pots. But now that the last kid is in college and she's set we changed our withholdings to now max out. 

We are also putting extra toward the mortgage to get that devil of debt done before we retire. 

Got laid off in 2018, but was on severance most of the year before launching my own business, so my income still looks strong for FAFSA, but have a junior who will be applying in the fall, so I expect to get no aid. What type of documentation should I include in my appeal to show that I'm not making in 2019 nearly what I made in 2018? Thank you!

You should definitely appeal for more financial aid.

Provide the college with documentation of your layoff, the severance pay (e.g., a copy of the separation agreement) and some documentation of your current income. Documentation of current income could include copies of pay stubs (if you pay yourself a salary) or a financial statement for the business. Colleges prefer third party documentation, but this is sometimes not available for a self-employed business. But, if you use an accountant, a letter from the accountant might be considered more credible than your own statement. 

Hi, I live in NoVA and my mom lives alone in a retirement condo in MA. My dad always took care of the finances but since his death in 2014, I’ve been trying to help my mom and now I’m at my wit’s end and it’s causing me so much stress. She doesn’t remember what she buys on her credit card, doesn’t remember why she wrote a check. She also has lied to me about her habit with Publishers clearing house where I know she’s spent at least $1,000. I pay her bills online but she still has her checkbook so we’ve run into situations that her account is overdrawn. She’s lonely, depressed and spends her time looking online and wants to buy stuff to pass the time. My dad never put any limits on spending and he was generous with charities and their church. My mom tries to keep up with that. In one moment she’ll say she’ll stop spending but then I’ll see where she spent $50 on some weight loss gimmick. She gets $1600/month from my dads’s Pension and social security. Her rent is $3500/ month which is paid for by my dad’s retirement savings and that is dwindling. Another complication is that I’m a single mom trying to make ends meet and I’m about to take a job overseas. I don’t have a lot of time, I’m angry, sad, and scared. I’ve considered cancelling her credit cards and getting her a debit card with a limit. And then putting a freeze on her credit so she can’t open any other accounts. I’ve considered turning the whole bill paying over to her attorney’s office. My relationship with my mom is now full of stress for both of us and I really don’t want it like that since I know we don’t have many years left. Any advice?

Oh my dear, I'm so sorry. You are in the same boat as a lot of folks. I'm going to get a financial planner to answer you in more detail so please look for my next column or newsletter on this issue. I just won't have the time here to go through every thing with you. But I will say that you need help and the aid of someone who can help with the bill paying, sitting with her etc. Contact the local aging office in MA and get recommendations on how to get your mom some assistance. There are agencies who you can pay to help with the things you are currently doing. Please email me at colorofmoney@washpost.com 

What is the best way to ask for more aid after you have received a financial aid package?

First, call the college to ask about their process for financial aid appeals. Some colleges have a form you can download from their web site. Others ask you to write a letter.

The letter should list the special circumstances that affect your family's ability to pay for college, such as changes in income since the prior-prior year, unusual expenses, changes in assets, demographic changes, and anything that differentiates you from the typical family. Be sure to provide specific numbers concerning the financial impact on the family.

Include copies of documentation (not originals) of the special circumstances that affect your ability to pay for college.

Mail the letter and documentation and any required forms to the college's financial aid office. (If you are appealing multiple college's aid offers, you will need to send a separate letter to each.)

Call the financial aid office a week after you mail the letter to confirm receipt and ask if they need any more information. 

After filling out the FAFSA, our EFC came back at about 25% of our family AGI. That seems pretty far off base as my mortgage is about that. How does the government calculate EFC?

The EFC is based on the income and assets of the student, the income and assets of the parents, family size, number of children in college, and the age of the older parent.

The formulas are heavily weighted toward income. Half of student income will be included in the EFC, after subtracting a student income protection allowance (currently $6,660). As much as 47% of parent income will be included in the EFC, after subtracting an income protection allowance based on family size, typically $18,000 to $34,000. 

The impact of parent assets is on a bracketed scale with a top bracket of 5.64% of the asset value. The impact of student assets is at a flat rate of 20% of asset value. 

The number of children in college has a big impact. The parent contribution portion of the EFC is divided by the number of children in college at the same time. So, when the number of children in college increases from 1 to 2, that's almost like dividing the parent income in half.

An EFC that is 25% of AGI is toward the bottom of the range seen by most families with just one child in college. 

Most families find that the EFC is a very harsh assessment of the family's ability to pay for college. 

And sometimes colleges do the bait and switch from freshman year to following years with respect to financial aid. Our family income did not change from year to year and our child's financial aid was significantly lower in sophomore, junior and senior years with respect to freshman year. (She was the only child in the family attending college those 4 years and she did not receive any merit scholarships, only need based aid.) They obviously did the bait and switch because they knew that very few students would actually transfer schools after attending freshman year. And this school should be embarrassed because their endowment has billions. I won't name the school but it rhymes with Don's Bopkins.

Lol! Don't talk about my school that way (Got my master's at rhymes with Don's Bopkins).

But you make an excellent point and one I tell parents all the time. Be careful you aren't suckered to send your kid to a school based on freshman aid. Ask whether you can afford the school if all aid is taken away for whatever reason. 

About half of all colleges practice front-loading of grants, where they give a better mix of grants vs. loans during the freshman year than during subsequent years.

To tell whether a college practices front-loading of grants, go to the U.S. Department of Education's College Navigator and look at the grant figures under the financial aid tab for the college. There will be two sets of figures, one for freshmen (first-time, full-time students) and one for all undergraduate students. Look at the percentage receiving grants and the average grant. If there is a significant decrease in these figures when you compare all undergraduate students with freshmen, it is a sign of front-loading of grants. It can give you a ballpark idea of the magnitude of the decrease. 

The particular college you mentioned is not one, however, that is known for front-loading grants. They also just received a big donation to enable them to expand their need-based gift aid. 

Sometimes, student income will have a big impact on financial aid, if the student earns more than about $6,000 a year. Also, if the student receives distributions from 529 plans that are not owned by the student or parents (e.g., from a grandparent-owned 529 plan). 

Your phrase "financial terror" is dead on. I used to carry a lot of debt and I would literally wake up in the middle of the night terrified - heart racing, tossing and turning - about how I was going to deal with it. I was fortunate to get a windfall that wiped it out, and I was 1000% certain that it was my ONLY chance to change my financial life and I wasn't going to blow it. In the several years since, I've changed everything about how I manage money and educate myself about it, and I haven't had the "financial night terrors" since. Your advice has been a guiding light through this change in my life, and I am so grateful!

Thank you and so glad you saw the light!

Hi Michelle, love your column. I once saw a video of you giving a talk/ Q&A at a church and there was a lady saying that she "needed" a fancy car and clothes (and the debt to get them) in order to impress clients. (Needless to say, you did not agree, lol.) Do you have a link to this video somewhere, or remember what the occasion was? I'd love to see it for a motivational refresher! Thanks

I remember that meeting and question but now sure where to find the video. Probably can search on YouTube. I'll have to look for it. But entrepreneurs make this claim to me all the time. If I don't drive a certain car -- that they can't afford -- they won't get business. Hogwash. If you're good at what you do, why should the client care what you drive or whether you have red on the bottom of your shoes? 

Good morning/afternoon, Assuming a student has been accepted to a college, when would they find out if they received a merit scholarship from the school? Would you know before you enrolled?

Financial aid award letters typically arrive with or a few days after the admissions offer. Merit aid will usually be noted at that time.

Most merit aid is formulaic, such as requiring a specific GPA, class rank and admissions test scores. Some colleges give merit money to all students who satisfy those criteria, some have a lottery among the qualifying students. 

I thought I'd share my experience with our taxes for 2019. We definitely benefited from the new tax law, and I'm certainly happy to pay less, but in all honesty I don't think we should needed the tax relief. For tax year 2018, my wife and I actually earned less than in 2017 (393K vs. 368K). Even with the higher standard deduction, we still itemized. Interestingly, our taxable income was higher in 2018 even thought we earned less because we couldn't deduct the full amount of our state taxes and because we lost other deductions (like non-reimbursed business expenses). So taxable income was 340K in 2018 vs. 335K in 2017. But our total tax bill was over 21K less in 2018 - this is apparently due to two things: (1) lower marginal tax rates and (2) a change to the AMT threshold. We had been getting caught by the AMT for the past 15 or 20 years but no longer. For 2017 we paid almost 94K in federal taxes but only 72.5K in 2018. I don't know that this is fair, but people should know who is getting the benefit of this ill-advised tax deal.

Thank you for walking us through your tax situation and your honest perspective even as you benefited. Can you run for office? 

Had NO IDEA schools did so (how does that even work with annually-calculated need-based aid??). Thank you for the information + suggestion to look at College Navigator.

I know, right. Mark is a wealth of information. 

Wife is on disability. Check from as disability also sent in child’s name. We included in Fafsa form. Was this correct?

Some disability-related income is not be reported as income on the FAFSA and some is reported as untaxed income and benefits on the FAFSA. 

Is it possible to receive aid for on-campus living expenses?

Financial aid is based on financial need, which is the difference between the cost of attendance and the expected family contribution.

The cost of attendance includes not just tuition and fees, but also room and board, textbooks, supplies and equipment, transportation and miscellaneous/personal expenses. (One can also appeal for dependent care costs if the student has children of his/her own that they support and for disability-related expenses.) 

So, yes, financial aid can be used to pay for on-campus living expenses such as living in a dormitory and paying for a meal plan. 

Is it worth writing an appeal for additional scholarship or aid from a college if there's been no change to your family situation that established the initial EFC amount?

Parents have a tendency to underestimate eligibility for need-based aid and overestimate eligibility for merit-based aid.

If you feel that it will be a struggle to afford to pay for the college, it can sometimes help to have a conversation with the college. Sometimes, the family doesn't realize that they have a special circumstance. The financial aid office can also help you explore options for paying for college. 

Please note that appeals are not just based on changes in the family's financial circumstances, but also based on anything that differentiates the family from the typical family.

What's the goal amount for each type of fund and which should you do first? Thank you.

This what I teach:

Emergency fund - Do not touch unless major financial crisis such as a job loss. Or perhaps your kid gets very sick and you run through all your sick leave (This happened to us but fortunately our child started to get well and we could return to work but we didn't have any sick leave left by the time she was released from the hospital. So we never missed a paycheck but it came close).

Life happens fund - Use this revolving fund to pay for things such as an unplanned for car repair. You can even put your vacation money in this account. The purpose of this separate pot is to prevent you from raiding your emergency money.

If you have an extra $200 a month, divide it in half and build up each fund. Once you reach perhaps 3 months of living expenses in the emergency pot stop saving there and put the rest of the money in the life happens pot. If that's got a good amount of money than take extra funds and pay down consumer debt or boost your retirement.

How can we find scholarships that our daughter could apply for. She is a junior now and we need to get the ball rolling so we can be prepared if it's not too late?

The scholarship databases listed in a previous answer will allow younger children to search for scholarships. The main restriction is they will not allow children under age 13 to search for scholarships, since the Children's Online Privacy Protection Act (COPPA) prevents them from doing this. There are, however, lists of scholarships for younger children available on various web sites. 

If $20000 scholarship is obtained, same amount can be withdrawn from 529 for other use without tax or penalty. Am I right?

Correct, so long as the distribution occurs in the same tax year as the scholarship is used to pay for college costs. Only the amount up to the scholarship amount is exempt from the tax penalty. It will still be subject to income taxes on the earnings portion of the distribution, just not the 10% tax penalty. 

When various sources tell you to save 10% or 15% percent or 20% of your income, where does saving for other people (ie 529) fall into that? Should you save 10-15% for retirement and another 5% for children's college? Is saving in a 529 considered a "want" not a need, so you save for it on top of the 20% you save for emergencies and your own 401K? Just trying to figure out how these blanket statements translate to real life.

This is such a GREAT question. The thing is you should try to do it all but at different levels. 

If you only can save say 15% put 10% toward retirement and 5% toward college, which by the way for many is not a "want." Many jobs now require at least a bachelor's degree. And since your kids don't hold down full-time jobs when they are 2, 3 or even 15 where would they get the money to pay for college?

So, as I mentioned earlier my husband and I save for retirement but we didn't do the max because we wanted to save for college. We didn't put a whole lot extra on our mortgage because we wanted to put in enough to our employer plans to get the match. 

As things change and certain financial obligations go away, you boost your savings in other areas. 

The thing is do what you can with what you have. The percentages are guidelines not hard and fast rules. 

Re: prepaying 8 semesters The writer asked for disadvantages, but what are the advantages of doing that? The only thing I can think is that it locks in the tuition amount? Otherwise, why give up that much money early when it can earn, even in a CD, until needed?

The advantages of making a lump sum contribution is that it increases the amount of time during which the money can earn a tax-free return on investment. (With a prepaid tuition plan, it may reduce the cost of the prepaid tuition units as compared with what they would cost if the money were contributed over time instead of a lump sum.) Grandparents sometimes make a lump-sum contribution because they are worried about whether they will still be alive when their grandchildren enroll in college. It can also provide peace of mind, knowing that college costs are paid for. Some families use lump sum contributions to prepaid tuition plans or college savings plans to resolve college support considerations in divorce cases. 

For our 25th wedding anniversary, we held an event but did not tell anyone it was for our anniversary, except out-of-town members of the wedding party. The event was delightful, we were surrounded by our close (and surprised) friends when we toasted one another, and did not add to our "stuff." I also followed Miss Manner's rule. Not possible for a young child, probably. But it work for older folks.

Love, love this idea because it took the gift-giving pressure off. How thoughtful! 

I have always been shocked at how little aid I have gotten. I have been a single mom and have made under $60k for the past 8 years. The first year I had to file a FASFA, I had income of $60k. Now I will have my second child entering college, my child support will go away and the school is still only give us a $2000/year scholarship. This past year I made just over $70k so it appears that is all they look at. How do people do it? The students themselves only qualify for $5500/year for student loans for the first year.

You should appeal to the college for more financial aid, based on the child support ending. Note that the FAFSA is based on income from two-years ago (the prior prior year), so the college doesn't necessarily know about the end of child support. That's why you need to appeal. 

Also, some colleges don't have big financial aid budgets and don't give out a lot of financial aid other than federal and state aid. 

Ask the college why you got so little financial aid. 

I was wondering what your top tips are for appealing financial aid? Do you write a letter, email, phone call, in-person meeting? We are trying to avoid the student loan track for our children.

I have a free one-page tip sheet on appealing for financial aid on my web site. It is based on my book, How to Appeal for More College Financial Aid.

It is best to file an appeal in writing, since the process is driven by documentation. A phone call should be used to ask about the process for appealing for more financial aid. Don't try to make the case by telephone.

Never use an in-person meeting to appeal for more financial aid. It almost always backfires. Whether an appeal is approved has nothing to do with your persuasiveness. 

Great chat today and many thanks to the wonderfully informed Mark Kantrowitz. 

But we have to go. Mark has agreed to answer leftover questions offline and I'll put the answers in an upcoming column. 

Again, thank you for joining me today and see you next week. 

Michelle, just wanted to let you know I followed your advice with my tax return this year. I really didn’t expect anything because the withholding calculator said I would not get much. But my job withholds sales bonuses at a tax rate far higher than my withholding. So I got almost $5000 back. I paid off the credit card that I’ve been working on as I dig out of debt, put some money in my emergency fund as well as my life happens fund and put another $1000 towards additional debt as well as put some money in savings for summer childcare and then I’m going to need to pre-pay. It was such a nice feeling to see the $0 on that credit card once the payment went through. still working towards my plan to get debt-free fast as possible but now that credit card payment will be able to go towards other debt

Okay, had to get this one in. Good for you!

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Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

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Mark Kantrowitz
Mark is the publisher and vice president of research for Savingforcollege.com.
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