Newbie, tuition costs?

[abby2]

I too have been lurking here for many weeks, have learned quite a bit of useful information and thanks to all for that! We will be filing Chapter 13 on September 16th, and believe me I am scared to death!!! Many of my questions have been answered in other posts, but one that continually keeps me awake at nights is:

We have twins that are seniors in a private school. We have listed their tuition on our current expenditures ($626.00 monthly). After graduation it's on to college for both. IF the trustee allows that expense will we be able to justify that same expense for college costs next summer??

Also, how difficult will it be to apply for students loans with parents who have filed BK??

Thanks

[rrockinggramma]

because your twins are seniors the trustee would have to be heartless to disallow that expense now. But one you are filed and confirmed, unless you are audited by the trustee's office and the overall trustee, your expenses probably won't be changed unless you request it (modify your plan) so hopefully that 626 a month can be used towards the college expenses as well. But your own attorney would know what the trustee is ok with and not ok with.

AS to financial aid, make sure both girls file a FAFSA. Even though you are in chapter 13, it won't matter. The FAFSA will go only by income etc but the fact that you will have 2 at the same time will help your EFC (expected family contribution) because that amount will be divided by 2 instead of one. And it will increase your twin's chances of qualifying for some aid.

Now most aid is in the form of Stafford Loans. There are 2 kinds. Subsidized and Unsubsidized. The subsidized stafford is when the expected cost of the college (this figure is provided to the federal student loan office by the college and can be found at the financial aid office of the college) minus the expected family contribution and this loan is subsidized by the federal government and it means that the student or parent doesn't have to pay it back until the student is no longer in college. And it simply means that the student has demonstrated a need for college aid. The unsubsidized is used when the EFC and the total cost of college shows no aid needed but the family can't come up with the EFC to send the student to school. Then the student can borrow the unsubsidized staffard to help defray the costs. The interest is the same but the difference is that the interest on the unsubsidized will ACCRUE while the student is in school while the subsidized one doesn't (because the government takes care of it)

If there is still a difference, then the parent can apply for the PLUS loan through the federal government (Parent loan)


Now because you are in chapter 13, you will be DENIED for this loan automatically. But it is important that you still apply because the minute the denial comes in, the financial aid officer at your twin's school can simply borrow that same amount of money in the STUDENT'S name.

So chapter 13 will complicate but not STOP your twin's from receiving financial aid.

The key is the EFC (expected family contribution) All aid will hinge on that number and the difference between the total cost of the college minus that number. If the EFC is high, then no aid will be given out by the college. But because you have 2 at the same time, that EFC is divided by 2.

So good luck with this. Just be sure that FAFSA is turned in and list the MOST EXPENSIVE school your twins are applying to on line 1 (all aid is determined only by the school listed on line 1 and then adjusted for where they actually go later by the financial aid officer at the college)

Also be sure you don't miss deadlines.

[dyrstr8s]

While I'm no expert, I will share my experience.
This has been the most painful part of Chapter 13 for us. Because we make good money, the FAFSA determines there is no need for financial aid. So our children are not eligible for need based scholarships or grants. But because our disposable income goes to the Chapter 13 plan we cannot help our children much with paying for school. I asked our lawyer if tuition payments or other school expenses could be considered when determining disposable income, she said they cannot.
We have a daughter who was a sophomore at a state university last year. We were approaching the point of filing chapter 13 when school started and I asked our lawyer if we could apply for a Parent Plus Loan. She said we could, so we did, and were denied. That denial, however, made my daughter eligible for more Stafford Loans in her name, which got her by.
This year the school financial aid office told us that we should apply for the Parent Plus Loan again, be denied, and then she would qualify for the additional loans again. However, lo and behold, we were approved! Bad credit, filed bankruptcy (included Dept. of Education in the bk) and they still approved the loan. What morons! I've contacted the university to cancel the loan, but now because we were approved my daughter does not qualify for the additional loans in her name.
Not sure how she's going to get by this year. The loan she did get pays for tuition, but her summer job savings and part time income won't cover her living expenses.

[rrockinggramma]

wow I am surprised. Your loan must have slipped through the cracks. LOL but since they aren't dischargeable they have nothing to lose anyway.

So is there an issue with you taking out the parent loan (asking trustee permission of course and delaying the payments until after she graduates?) The interest accrues of course but that might help her get through her junior year.

In addition if she goes to the financial aid office and begs for help, they may have some unadvertised help to give her.

I left my son in the lurch his junior and senior year. We scraped by the junior year but his senior year there wasn't anything he could do. He was at his limit for how much stafford he could borrow (capped) and did not qualify for any more aid. The school financial aid office allowed him to go to school to finish up and then pay them off after his graduation (NO JOKE) They held his diploma of course until he was paid up and he was on their internship program so they had means to take his check, leaving him enough to pay rent and buy food. But that was how he made it through his senior year. This was Lawrence Tech University in Michigan.

So sometimes there is unadvertised aid out there and with really hardship cases, the university will do what it can. I just was in no position to help him out.