Okay, here's my original post. I just felt silly because it's so darn long.
I used to be a financial aid counselor for a public university until recently. I can tell you that no one understands their family's expected family contribution - if it helps, it's equally unfair to everybody.
Unfortunately, with skyrocketing tuition and slowly increasing federal aid programs, it's very difficult for all but the lowest of incomes and highest of student achievers to finance an education without debt. Unless families have been planning and saving for college since their children were small, loans generally make up the bulk of college financing for those who are quite lower-middle-class and up.
The most important thing you can do to try to help yourself is file as early as possible - you can file in January with estimates, and make updates in February after you've gotten a clearer picture. Make sure your FAFSA is *complete* and has been signed by parent and student; read the notes they give you in your Student Aid Report to see if there is conflicting information or something else needed, because as long as your application is "unofficial" you have not met the school's deadline. If your Student Aid Report does not have an Estimated Family Contribution number, it is still unofficial. Contact FAFSA if you are unsure what's wrong with your application or what else you need to do. It's also important to be honest - many schools have edits in place to detect information that seems "off" and select a family for verification, which is a request for taxes and other information to verify FAFSA reportings. Some schools require this information for every student, no matter what. Also keep in mind that your Estimated Family Contribution is not necessarily what the school expects you to write a check for - it's simply an indicator of need that helps the school determine what kind of aid your student qualifies for. Beyond that, it's a pretty meaningless number for practical purposes.
I can also tell you that we *never* increased someone's aid just because they wrote us a letter and asked. We almost always *over* awarded our funds because we had a very good idea from statistics how many of our students would not accept their offers and would go elsewhere. I recall only one instance when we determined in September that we would have significant-enough extra funding in one program to raise the eligibility requirement and award more students; we did this without them asking us as long as they were newly eligible and had accepted their original aid offer.
In other cases, families requesting more aid needed to have information to provide that was not reflected in the FAFSA, because we had to treat everyone equally by FAFSA's determination of need. Because FAFSA doesn't consider "consumer debt," credit card debt was not something we could factor into aid determination. But a family *could* contact us in writing and request that we review their situation if something had changed or something catastrophic had happened.
As you know, the FAFSA asks for information from the prior year - so if something's significantly changed, it's worth it to write a letter requesting review along with documentation. Depending on what has changed in your circumstances, the financial aid office may be able to make an immediate decision, or ask that you wait until later in the year to get a better picture of your total income for the current year (they may do a "base year change" and consider the current year income rather than the prior year income that FAFSA has considered). If you're asked to wait until later, potential changes may not happen until school has already started or sometimes, if the circumstances are particularly complicated or uncertain, you may even be asked to wait until you've filed your 2008 taxes so they can see exactly what changed from from the 2007 information reported on the FAFSA. If a change results, it would be retroactive to the beginning of the year and any additional aid would disburse at that time, but of course it's not something to count on when selecting a school. If they ask that you wait until later in the year, it's generally a good idea to only go with that school if you can handle the aid package as originally offered and treat any potential changes as nice surprises.
Each financial aid administrator has the power to make a "professional judgment" and the scope of that power is pretty far-reaching if it can be justified within the laws, but consistency in the office is what's most important - so a lot depends on the philosophy within your school's financial aid office, their interpretation of the regulations, and how strictly or loosely they adhere to them. They are not required to make professional judgments, and do face having their decisions audited, so their decisions need documentation and justification and must be consistent with similar cases in the office. Some schools make many professional judgments for things that are IMO questionable within the federal guidelines, and others are much more stringent. However, it can never hurt to talk to the office and at least run your situation by them, and follow it up with written requests and documentation if they believe it will might make a difference in your situation.
I do have to say that frequently, even if a request would have been approvable, it still didn't make a big enough impact in the Estimated Family Contribution to make a difference in the amount of aid at all and make the family grant-eligible. Even more painful, sometimes it would have made a big difference if the family had applied by our priority deadline of March 1 (after which all need-based programs except the Pell Grant and Oregon Opportunity Grant were no longer available), but they didn't, so the only additional aid was perhaps a $400/year Pell Grant when it could have been potentially about four thousand more in grants that go along with pell-grant-eligibility if they'd applied earlier. All states have different priority deadlines, so apply early and ask with your office - they usually need to have *received* the processed, complete application from FAFSA by that date. You might not think you need aid, but circumstances change within families all the time - file by the priority deadline just in case something happens and you need aid. Even if your special-circumstances request doesn't make you grant-eligible, it may change the loan offered to the student from an unsubsidized loan (accruing interest while they are in school) to a subsidized loan (interest will not accrue while they are in school). The parent loan is always unsubsidized. I should also mention that in many cases that a family's circumstances change and they do suddenly become grant-eligible, it often still leaves a gap in need that would have to be covered by parent loan, private loan, or other means of payment.
Work study is also considered a need-based program, and while the limits are generally slightly higher than the Pell-Grant and accompanying possible grant programs, it's generally not a large sum - perhaps $1500-2500 per year. It can also sometimes limit students because some employers cannot allow them to work beyond their work study dollars due to their budgets; sometimes students can earn more money if they work a non-work study job, or at least find one that can afford to keep them on after their work study funding runs out. One benefit to work study is that when filing the FAFSA, students report the income they earn as a work study student, but then report it again later in the FAFSA as work-study earnings so they are "protected" and the student is not punished for having earnings that were made available to them on a need-basis. At least at the school I worked at, work study funding failed to grow but the number of students qualifying for work study did grow, and we had to reduce the eligibility level and the dollar amount in order to still provide a reasonable allotment to students.
If your child is set on attending a four-year university from the start, you will probably have to finance part of their education with a loan outside of the Stafford loan offered in their name, as you've recognized the relatively low loan limits for federal loan soffered to students. As others have mentioned, you can do this in several ways. You can apply for the parent PLUS loan and see if you qualify. It's a fairly lenient credit check - the few denials we saw were generally for being 90 days delinquent on a credit account or having a bankruptcy in the last 7 years. If you are turned down for the loan after applying, contact your school's aid office because they can make more UNsubsidized Stafford loan available to your student. Not a whole lot, but they can provide for them the same level of Stafford loan funding that they could if the student were independent - an additional $4000/year for a freshman or sophomore, or $5000 for juniors or seniors. You must contact your school to pursue this option if you've been denied the PLUS loan, and ask them their procedure. The school cannot make this additional amount available simply because a parent refuses to apply for the loan, and the additional amount is only unsubsidized even if their original Stafford loan was subsidized. Your student also will not qualify for additional grant aid because this has happened; your information stays as part of the FAFSA calculations even though you do not qualify for the loan. Keep in mind each PLUS loan begins repayment 60 days after the final disbursement for the year; they are *not* deferred payment until the end of college or separation from school like the student loans are.
If you choose not to apply, the student can also apply for a private student educational loan. Most lenders like federal banks offer these loans, as well as lenders like Sallie Mae. These are based on credit for the student and they can generally borrow this amount: cost of attendance - all other accepted aid. Often, students need a cosigner. They may be more likely to be approved by someone like Sallie Mae without a cosigner, though they will likely pay for this leniency with higher interest and more fees. These loans should be deferred until they are separated from school. These lenders generally send the funds directly to the school to pay off any remaining charges and then are disbursed to the student for their expenses for the term. There are private lenders out there who do not contact the school to find out what the student is eligible for and simply lend them whatever the student asks for and send it directly to the student, not the school - these loans are generally not federally backed and will have interest and/or fees out the wazoo. In addition, your aid office will *not* want to know about them because a student is legally not supposed to receive more aid than the cost of attendance (though there are exceptions for students fully-funded by scholarships who also qualify for "entitlement" programs like the Pell grant). These loans are sort of murky water. I would highly recommend your student not try to go that route, and try to live within the means of the cost of attendance in their financial aid statement. If for some reason they have higher expenses, they can go to the financial aid office and talk about increasing their cost of attendance and their private loan certification.
One final option I saw a lot of families taking was to take out a home equity loan because it was better interest than the PLUS loan. I'm no financial advisor and am not suggesting this over other options, especially given the current housing and mortgage situation, but do want to make it known that a significant portion of families went this route and you have to determine if this is the best option for your family.
Please also have your student (and yourself) use a repayment estimator with whichever lenders you choose. Have your student estimate the amount of loans they would take over the life of their education and see what kind of monthly payments they would be able to expect. Will they be able to afford them? Would it be better to take a year off and save some money? To go to a community college for a year? To go to a college in a hometown or a town with relatives and live at home or with family? To go instate instead of out of state? Go part time and work while in school? To consider private schools, which may look more expensive but might have more funding available to award your student? Have your student think carefully about the amount of debt they will accrue, and also consider yourself whether you will be able to make payments on four separate, potentially large parent loans by the time the student is finished with a bachelor's degree.
One final note - this is a busy and stressful time of year in financial aid offices. I can pretty much guarantee you that they are doing the best they can to offer your student what's available to them. Certainly make them aware of situations you think might change your circumstances, but also realize that in most cases their hands are tied by federal regulations and numbers, and try to be respectful even if you are unhappy with your aid package (providing whoever you are speaking with is respectful as well, of course). I started out answering phones in the office before I became a counselor, and I cannot tell you the amounts of obscenities that were hurled at me or the accusations that were made. The state of federal financial aid funding is extremely frustrating for financial aid administrators as well, so try to work with them toward any possible changes that can be made, rather than against them.
Hmm...guesss I wrote a book. Guess I miss my job a little bit since we relocated for hubby's career.
It's a tough job, but occasionally someone would tell me that I was helping them realize their dreams of higher education, and that they'd never thought it would be possible. Getting a hug from a stranger suddenly crying happy tears was pretty cool!