 Q. My son will graduate this year from the IB program. He applied to Duke as his number one choice but we just found out that he has been “waitlisted”. He is very upset after all the hard work he has put into high school, to find out that he may not be allowed to attend his first choice. What should we do?
A. Unfortunately, we are seeing this more and more. The first thing you need to do is to contact the admissions office to determine the reason behind your son being waitlisted. What were the perceived weaknesses in his application? If they tell you that an ACT or SAT were too low, you can have your son complete prep and take those tests again. If the scores improve, send them to the school. If the issue was GPA, ask if you can forward his mid-term transcripts (if his GPA will increase). If they do not give you a specific reason, forward additional reference letters, volunteer hours, and even an additional essay or letter from your son detailing why Duke is his first choice. Make sure to contact admissions again after forwarding any new information to make sure it was received and to determine if that has bolstered his application. They might not be able to give you an answer immediately and might even ask your son to apply again in the spring. Whatever the case, make sure to keep in contact with admissions. Contact signifies interest, and this alone may help your son’s case.
Q. My son will graduate from a high school this month and has been awarded $14,000 in scholarships, but this isn't enough money to pay for his college. His total cost of attending the out-of-state college is about $23,400. My ex-husband refuses to help financially. Is there any other money available to help pay the additional costs?
A. Many divorced families have this predicament. However, you do have a few more options. First, your son can qualify for a Stafford Loan for $3,500. In addition, you are probably paying approximately $4,000 in living expenses (food, school activity fees/lunches, etc.). Most of this cost can now be shifted to cover the miscellaneous cost of the education, which is part of the Total Cost Of Attending ($23,400). So subtract this cost off the total bill. By deducting the scholarship, student loan, and living expenses, you will have left over about $1,900 more per year than you will need.
Also, since you will pay at least $2,200 in tuition from the Stafford Loan that your son will receive, you may qualify for the Hope Tax Credit of $1,650, as long as your income (AGI) is below $96,000. If your income is above $116,000 but no more than $130,000 your can take the Educational Tax Deduction of $4,000 which could save you $1,045 in Federal taxes. Q. My son is going to college this year and he received 2 grants. Then when he was offered a baseball scholarship, the college took away his two grants. His baseball money and the 2 grants would have given him enough money to cover 100% of his educational costs. Could you please tell me why his grants were taken away. Now we have to take out a Stafford Loan to make up the rest.
A. Welcome to the world of understanding Colleges and Universities! In answering your question, I will assume that you completed the Free Application for Student Aid (FAFSA). I am also assuming that when he received his financial aid award letter from the college, the college was unaware of the baseball scholarship. So they calculated his NEED for aid and gave him the two grants. After receiving the two grants, the Bright Futures money and the other financial awards, this left you with paying the remaining cost.
Now, when your son received the baseball scholarship along with the other financial aid awards, it was enough to cover 100% of your son's college cost without borrowing any money. However, the college replaced the two grants with the baseball scholarship leaving you short of paying the full cost. Since the college took away the two grants and replaced them with the baseball scholarship the baseball scholarship did not benefit your son in the least.
Any athletic scholarship is looked upon as MERIT based aid that has nothing to do with financial NEED. However, the college that your son is attending is looking at it a different way, they are considering the athletic scholarship as NEED BASED AID. Now, they can do anything they want when it comes to giving monies to students. You are right, they should not have taken the grants away that were based on NEED, but they are looking at the MERIT based baseball scholarship as an additional resource to cover the total financial NEED of your son.
It may not be too late to appeal the reduction of the two grants. I would talk to your son's baseball coach and ask for his help. If the college will not give you the two grants back plus the baseball scholarship, I would turn down the baseball scholarship and accept the two grants (providing the grants add up to more money). Now the baseball scholarship can be redirected to one of the other baseball players that may need the help. This will benefit the baseball coach and the team. Lastly, if your son gets hurt or stops playing baseball he would still have the grants based on NEED. Q. I'm a bit unclear how "work study" works. The college offered this to our daughter and they are paying a rate of $9.65 per hour.
A. The student works for $9.65/hr. and the college gives the student a paycheck for the work, less tax. The student can use the money to pay for whatever they wish. Your college should issue a W-2 at the end of the year for the amount, which is shown as student income on the 1040-EZ, and is then listed on the FAFSA as a deduction on Worksheet C (negating the student's work-study income for financial aid purposes). Hope this clears things up a bit.
Q. I realize that scholarships that are not applied to qualified college expenses are taxable to the student, but what about college grants? Is this taxable income or is this simply considered a tuition discount?
A. According to the IRS, scholarships, grants and tuition discounts are all the same, which is to say they are tax free when applied to tuition and fees and taxable if used for other expenses.
Q. My brother told me that my 529 money is not tax free if my son receives a scholarship. Is that true?
A. It all depends. If he has a full scholarship then he is right, because there are no qualified educational expenses left to use the 529 for. Now, if your son has a partial scholarship, he may be wrong. The scholarship will be deducted from the qualified educational costs (cost of college). The balance of the cost can be paid with 529 monies tax-free. However, if you use the 529 money for any reason other than qualified educational costs, such as personal expenses, the 529 is taxable at ordinary income rates plus a 10% penalty.
Q. I am a high school guidance counselor that has a student who stated she was a ward of the court on the FAFSA. The Financial Aid Officer at the college asked for documentation to support her situation. The court order says “custody” was granted to the grandmother. The financial aid officer wants to use Professional Judgment to use the grandparents’ financial information in place of parents, which seems unreasonable to me.
A. I would have to disagree with the financial aid officer. From the language you quoted in the court order, I would take the interpretation to be that the court has removed the parents’ rights and the grandparents are now the child's custodians. I believe that the issue is the custodianship, and it appears that the court did not relinquish its overall control of the child as it would in the case of an adoption; therefore the student is "a ward of the court". My recommendation is to get back with the court officials and request that they provide the necessary clarification. Then submit it to the college. If the college does not except this clarification I would have the student apply to another college.
Q. My son has signed a National Letter of Intent with a college here in Florida. Now he has changed his mind and wants to attend a college in Indiana. Can we get out of the National Letter of Intent with the college here in Kentucky?
A. When signing the National Letter of Intent with the college in Kentucky your son is committed to attend this college for his initial year of enrollment. If he does not attend this college or attends this college for less than one academic year, and enrolls at the college in Indiana, which participates in the National Letter of Intent program, there may be eligibility ramifications. The penalty may preclude him from representing the college in Indiana until he has completed two academic years at this college. He may also lose two seasons of competition in all sports. My suggestion is for him to attend the college in Kentucky. He made a commitment to this university in good faith and he should honor that commitment.
Q. I am a divorced mother of a high school senior. When I remarried in December of 2000 my new husband and I signed an agreement that he will not be responsible to pay any of my son's college expenses, because he has three children from his other marriage that he will have to pay for.
Our CPA completed our FAFSA out for us and did not include my new husband's financial information. The Federal Government sent us a notice that the FAFSA could not be completed as submitted. Now it is almost the first of May and no offers of financial assistance have come from the college my son wants to attend. What do we do now? Is there any way around this problem?
A. I am not sure, but the reason you received the FAFSA back is because your CPA indicated that you were married on the FAFSA, but you showed no financial information or social security number for your new husband. The Federal Government's need analysis process ignores written or verbal agreements, when it comes to applying for Federal Financial Aid for college. The Government position is that individuals (parent and step-parent) cannot make an agreement between them that is binding on a third party (the Federal Government). The Federal Government considers your new husband as a source of support for you and your son, regardless of any written or verbal agreements you and he have made.
I would recommend revising the FAFSA (include your new husbands’ financial information and social security number) as soon as possible and send it in for processing. If he will not give his information to you, I would contact the Financial Aid Officer at the college your son will be attending and discuss this problem with him/her.
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