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Can a family with a 20 thousand dollar income afford to pay 7000$ a year?

pwang128pwang128 7 replies2 discussions Forum Champion
I live with my mom so the household has a total of two people and her yearly income is about 20 thousand. What's the maximum a family with that income can pay for college per year?
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Replies to: Can a family with a 20 thousand dollar income afford to pay 7000$ a year?

  • njmissy13njmissy13 5 replies0 discussions
    There's no way to answer that for sure without knowing what your rent, food, utilities bills etc are. But in all honesty - I would have to say probably nothing. I wouldn't think that there would be anything left after paying for the basic necessities.
    edited May 2013
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  • swimcatsmomswimcatsmom 25 replies1 discussions Junior Member
    Are you asking how much you can pay? (I would agree with njmissy that there would be little to non left out of that income to pay for college).

    Or are you wondering how much schools will expect you to pay?

    2 very different questions.
    edited May 2013
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  • pwang128pwang128 7 replies2 discussions Forum Champion
    @swimcatsmom I just want to know how much out of that yearly 20 thousand income a family can pay for college. Currently with the financial package I have now, I still have to pay 7000. Is that something I should worry about?
    edited May 2013
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  • swimcatsmomswimcatsmom 25 replies1 discussions Junior Member
    Yes, I would say it is. I don't see how your Mom could come up with $7,000 a year on a $20,000 income. Are student loans included in the packet already? The max loan for a dependent student is $5500 which would probably pretty much cover you if you are frugal with books and living expenses.

    Have you asked your Mom what she can manage?
    edited May 2013
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  • thumper1thumper1 121 replies4 discussions Junior Member
    $7000 seems like a lot for your mom to contribute. Can you earn at least half of that amount working during the summer? Think of it this way...if your mom had to contribute $7000, that would be $700 a month for 10 months of the year. Does she have that amount of money?

    Do you already have the Direct loan of $5500 in your financial aid package?

    What is the total cost of attendance for your college? Is the $7000 you have to come up with part of your billable costs (tuition, fees, room, board)...or does this include costs you have a little control over like personal expenses, travel and books?

    X posted with Swimcatsmom!
    edited May 2013
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  • Erin's DadErin's Dad 48 replies0 discussions Junior Member
    What is the $7K based on? Have they already given you a Direct loan? How about work study? If that is the remaining balance AFTER those then $7K is an awful lot. But if that is based on average transportation costs and new book costs you can get that gap down.

    Xposted wtih Thumper
    edited May 2013
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  • Madison85Madison85 7 replies1 discussions Junior Member
    You should certainly be worried. Where will you get $7,000 from? Can you and/or your mom earn an extra $600 a month or save $600 a month out of her existing earnings? How much does your mom spend each month on rent, utilities, insurance, food, cell phone/internet/cable TV, clothes, gas, car payments, etc? Is there $600 leftover each month that she would willingly and easily give to you on top of the rest of your college costs? Does your financial aid package already include loans and an expected amount to pay?

    You have not given enough details for anyone to help you answer this question, but it seems the answer is likely 'zero', and you should be worried.

    You may need to put off college and work for a few years, saving every penny.
    edited May 2013
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  • renoverchatrenoverchat 4 replies0 discussions
    I think this is a question you should be asking your mom; however, it seems highly unlikely to me that someone with a 20,000 annual salary could afford to pay 7,000 dollars.

    You'll probably have to find some other scholarship options, or work and save money.
    edited May 2013
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  • pwang128pwang128 7 replies2 discussions Forum Champion
    No the 7000$ my mom has to pay did not take into account the loans and the federal work study program in my financial aid package. Work study is 1000$, Subsidized loan is 3500$ and unsubsidized is 2000$(this I'm definitely not going to take due to interest). Whats the best path I should take? Borrow the loans and contribute all my work study money into tuition?
    edited May 2013
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  • cptofthehousecptofthehouse 252 replies0 discussions Junior Member
    I think expecting a family at a $20K a year income,to pay $7K a year for college, or anything in addition to current expenses is too much. I don't see how anyone could do it, unless there are substantial assets involved. The EFC for parents earning a bit more than this is an auto zero. So, I have no problem committing to saying that coming up with $7K is unreasonable.

    However, the vast majority of schools in the US do not meet need. They gap. And some gap big time. I've read some posts were some students were accepted to schools like NYU, BU with a zerio EFC, and the only awards those students got were the federal entitlements, leaving gaps of nearly $50K. I've seen countless posts from those with zero EFCs, who were awarded nothing other than the PELL and Staffords with a pseudo award of PLUS (pseudo since a parent has to apply and qualify). So, that a school has given out an award package leaving a $7K gap is no surprise to me. What the school is saying is that it is not going to meet your need. You have to come up with those funds yourself if you are to go there.

    I've seen, increasingly, schools with larger and larger required student contributions that have concerned me. For those with a zero or low EFC, those amounts are terrible hardships to have to scrape up. And many of those schoos are ones that guarantee to meet full need. It's also possible under a number of scenarios to have larger expected institutianal contributions than what the FAFSA EFC is. You could have a zero EFC, but a college, that guarantees to meet full need, can come up with a whole other expected contributions. With NCP ,family business, home ownership, just as some examples, this can happen and does frequently.

    If the school is one that does guarantee to meet full need, talk to admissions and ask if there is anything the school can do to help you with this expected contribution, if you truly feel that this is a school that is worth the $7K. If you can get a similar education without incurring loans and having to scrape up this amount each year, that may be the way to go. If you can't come up with the money, there is no way around it. You will need as much a couple thousand if the school is any distance away to get there, get situated, buy books, personal effects, etc right off the bat, do keep that in mind.

    Can you give us more information on your situation? I agree that this is a huge load for your family, and unless you, the student can find a good paying job, several jobs this summer, it may not be doable to come up with this kind of money. I certainly would not expect parents making $20K to pay $7K for college for me, that I can guarantee you.
    edited May 2013
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  • thumper1thumper1 121 replies4 discussions Junior Member
    Well....if the only loans you have to take are the direct loans, then you can do this...and you probably should. If you take the full direct loan of $5500 (both subsidized and unsubsidized), and work this summer, you will have your costs covered and can use your work study money for personal expenses.

    Re: the interest...maybe your mom can help by paying the interest on the unsubsidized amount of your direct loan. That will not be a huge amount annually...and will therefore keep the interest accruing amount at $0.

    ETA...if the Direct Loans are all you take out, you would have a total of about $27,000 for all FOUR years total for your college loans. That is a reasonable amount and makes far more sense than expecting your mom with her very limited income to cover the cost.
    edited May 2013
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  • Yankee BelleYankee Belle 6 replies0 discussions New Member
    I think the OP is saying that on top of $5500 Staffords and $1000 work study, there is another $7000 in loans being expected. So, 12500 in loans per year. There's no way the family can afford that, even with going with used books and cheapest dorms. Will mom even qualify for the loans now and in later years?
    edited May 2013
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  • cptofthehousecptofthehouse 252 replies0 discussions Junior Member
    I would start looking for a job now. As I said before, maybe 2,3 jobs. My older kids did that during the summers when they went to college. That would be to get a fund started for the money you need to get to school and get started. The loans are pretty much typical. You will probably have them in increasing amounts each year in your aid package, and the work study as well. The most generous schools would have no loans or just subsidized loans. But this is not an atypical package. You might be able to earn enough money to avoid taking out the full amount of the loans or pay off the interest, Your work study award is small enough that you might be able to squeeze in another job at school as well.

    This is a doable package. Of course, if you have local options available and state and federal grants to pay the tuition, you could get away with no loans. Something to think about.
    edited May 2013
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  • cptofthehousecptofthehouse 252 replies0 discussions Junior Member
    If the school is asking for $7K IN ADDITION to you taking out $5500 in loans (sub and unsub) as well the work study, I don't see how you can afford this school.
    edited May 2013
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  • thumper1thumper1 121 replies4 discussions Junior Member
    OP...could you please clarify what you mean about the loan amounts. Is the $7000 balance without taking those loans?
    edited May 2013
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