What money is fair game for financial aid?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I grew up working class in the 1980s. I was accepted into every Ivy and top school I applied to, and the tuition at my college was about the same as my family's household income. So, I obviously benefitted tremendously from financial aid. Today, I earn a very good salary and my kid isn't going to have to worry about paying for school. But it is freaking ridiculous that the costs are what they are, even for schools that are nowhere near the level of a Stanford or Harvard. Just because I'm able to provide this level of financial resources to my kid doesn't mean that it's right that all parents should have to feel like this is a responsibility, or that they've failed if they don't have $400K set aside. I'm well aware of how rarified it is to be in my financial position. This is NOT NORMAL. These costs are out of this world. We might not be able to change all of the policies that support this insanity anytime soon. But at the very least, we should at least be able to have an honest and open conversation where nobody tries to gaslight others about this f'd up situation we all finds ourselves in.

NO. Having a fully funded pre-paid college plan is not the equivalent of being a responsible parent.

YES. A brilliant student with a ton of potential should be able to go to the school that will best nurture that brilliance. We need more schools and fed dollars that will make up the difference between a family's ability to pay and the cost of attending. This is a societal investment. We need to power out our best and brightest so that we can continue to lead the world in innovation. You don't get excellence by making your best and brightest go to a middle of the road school in a place where mediocrity is considered good enough. There is absolutely no way I'd be making the contributions to society that I can currently am if I'd stayed in my local community doing some 2+2 program. I've never seen a single person from my neighborhood survive the first two years of community college without falling off track. Those programs are completely unworkable for people living in 2-bedroom houses with 6 people and families with lots of drama that is a normal part of life in the working class and the poor. Never mind that in most American cities the public transportation systems are terrible so any student attending community college classes is going to need a car and gas & parking money, in which case they may as well have paid tuition at the good school out of town where they could have thrived. And at almost every one of those "live away" campus schools you don't need a car. Trust me, very few of the undergrads in Cambridge and Palo Alto have cars.

I couldn't agree more. Excellent post, PP.

My brilliant child went to a mediocre state college that we could afford. I wish I'd been able to send this child to a top college, but that was not within our means. We got some FA, and some merit aid at a few private colleges, but the in-state option (with merit aid) was by far the cheapest, even though it wasn't what my child needed. She's in grad school now at the best program in the US (if not the world) for her particular specialty. She graduated at the top of her class in college with every honor the school had to offer. But for the first couple years of grad school, she struggled to rise to the level of her peers, most of whom had attended top universities and colleges. She would not have struggled had she attended a college at her level for undergrad. There must be a better way to apportion education in the US to meet the needs of kids like mine. She's OK, but how much further along in her research would she be now had she attended a more challenging undergrad college? She's doing research that will benefit humanity. I can't do this, most people can't do this, but she can. I think kids like mine should be able to go to the very best undergraduate academic institutions regardless of their parents' income or savings. Why punish brilliant kids like mine for having average parents like me who don't make enough money to save $400K for college?

What was the top undergrad she was accepted into and how much FA did they offer?

From what I know about Ivies and other top schools, they are extremely generous with FA for the true middle class families. However, if your HHI is $200K+ , you aren't middle class.

[Anonymous]

Anonymous wrote:I don't understand the reasoning behind using home value. Is the idea that the parents should remortgage the house to pay for school? For many people living in high COL places, house equity is part of their retirement nest egg. I'd love to have enough money to both pay a ridiculously high mortgage payment AND max out my retirement savings, but I can't. I plan to retire to my hometown where I can easily buy a low cost house there with the equity I'll walk away with after I sell my DC house. If I have to remortgage it, then I won't be able to buy a house when I retire. From what I understand, if that money were tied up in a retirement account, it would be untouchable and schools wouldn't consider it as available for college expenses. Is that right?

And what about savings accounts? Aren't we supposed to have three months of living expenses sitting in a savings account? That's a lot of money for people with high mortgages like many of us in DC or for those of us with medical issues. Is the fact that we squirreled those funds away in case of job loss (single mom here) going to be used against us for need-based financial aid?

I ran the net price calculators on a number of colleges with and without our home equity. Without home equity we were eligible for lots of FA. With home equity, we were eligible for none. No way are we going to use our home equity to pay for our kids' college costs!! But that's what colleges want us to do.

The cost of college is hugely inflated. Only the very wealthy can pay $80k (this year) for 8 months of college.

Applications to public colleges have soared because of this. At my kid's public college, most of the parents we met are upper middle class--doctors, lawyers, college professors, etc. They, like us, said no way to paying $80K for private college, even though the colleges claim that's what we must pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op here.

"We all choose how we spend $$. If you want to put it towards a house (car/trip/whatever) then college choices are limited to what the family can manage. There is nothing special about housing choices. If contributing to college is not a priority, it is totally fine, but don't expect the college to handle it for you."

I have saved for college on my one income, albeit not enough to pay full freight at a private school for all 4 years. I live in a neighborhood you would probably sneer at, so it's not as though I have lots of choices for cheaper housing here. I paid on my own student loans until was in my thirties. You make it sound as if we all have the ability to save $400K per child in 18 years, but that some of us choose to blow the money on trips to Hawaii instead of setting it aside for college.

I don't think anybody meant that you hadn't tried hard or done well. You should be proud of what you can pay for. But private college is not an entitlement.
We are in a similar situation, FYI. We have told our kids that we can pay for in state, if they want something else it will have to be someplace they can get merit aid.

The system of higher education in the US is seriously broken.

The cost of a private college has increased exponentially, particularly after the availability of student loans increased about 20 years ago.

When I went to (an Ivy!) college, private colleges were costly, but accessible to the middle class. This is no longer the case.

If you are middle income (less than $200K per year), you're going to pay dearly for private college, or send your child to a public college in your state because private colleges will expect you to pay close to half your net income for a single year of college. It's impossible for a middle income family to save $320K per child in 18 years solely for college (never mind retirement, emergency savings, etc.)

It would be crazy for someone with a family of four and an under $200K income to pay $80K per year for college, but that's what colleges are asking.

Why would they want a child with a crazy parent is beyond me.

My older kids got accepted at great private colleges, but got no FA, so they went in-state. My younger kids are going next year, so trying for merit aid. We are not hopeful. The system is broken.

BS. I’m an actual MC person who went to a private college in the 80’s, and private colleges have never been affordable to the middle class without scholarships and loans. This is typical DC people who grew up UMC or UC, and didn’t know it. I bet, in your mind, country clubs used to be accessible to the “middle class” too?

The problem is that most of the bitter people on this board thought they were middle class growing up and don’t understand why, if they make more than their parents did, they aren’t living better. Tip — if your parents were making 100k a year in the 80’s, you weren’t middle class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I grew up working class in the 1980s. I was accepted into every Ivy and top school I applied to, and the tuition at my college was about the same as my family's household income. So, I obviously benefitted tremendously from financial aid. Today, I earn a very good salary and my kid isn't going to have to worry about paying for school. But it is freaking ridiculous that the costs are what they are, even for schools that are nowhere near the level of a Stanford or Harvard. Just because I'm able to provide this level of financial resources to my kid doesn't mean that it's right that all parents should have to feel like this is a responsibility, or that they've failed if they don't have $400K set aside. I'm well aware of how rarified it is to be in my financial position. This is NOT NORMAL. These costs are out of this world. We might not be able to change all of the policies that support this insanity anytime soon. But at the very least, we should at least be able to have an honest and open conversation where nobody tries to gaslight others about this f'd up situation we all finds ourselves in.

NO. Having a fully funded pre-paid college plan is not the equivalent of being a responsible parent.

YES. A brilliant student with a ton of potential should be able to go to the school that will best nurture that brilliance. We need more schools and fed dollars that will make up the difference between a family's ability to pay and the cost of attending. This is a societal investment. We need to power out our best and brightest so that we can continue to lead the world in innovation. You don't get excellence by making your best and brightest go to a middle of the road school in a place where mediocrity is considered good enough. There is absolutely no way I'd be making the contributions to society that I can currently am if I'd stayed in my local community doing some 2+2 program. I've never seen a single person from my neighborhood survive the first two years of community college without falling off track. Those programs are completely unworkable for people living in 2-bedroom houses with 6 people and families with lots of drama that is a normal part of life in the working class and the poor. Never mind that in most American cities the public transportation systems are terrible so any student attending community college classes is going to need a car and gas & parking money, in which case they may as well have paid tuition at the good school out of town where they could have thrived. And at almost every one of those "live away" campus schools you don't need a car. Trust me, very few of the undergrads in Cambridge and Palo Alto have cars.

I couldn't agree more. Excellent post, PP.

My brilliant child went to a mediocre state college that we could afford. I wish I'd been able to send this child to a top college, but that was not within our means. We got some FA, and some merit aid at a few private colleges, but the in-state option (with merit aid) was by far the cheapest, even though it wasn't what my child needed. She's in grad school now at the best program in the US (if not the world) for her particular specialty. She graduated at the top of her class in college with every honor the school had to offer. But for the first couple years of grad school, she struggled to rise to the level of her peers, most of whom had attended top universities and colleges. She would not have struggled had she attended a college at her level for undergrad. There must be a better way to apportion education in the US to meet the needs of kids like mine. She's OK, but how much further along in her research would she be now had she attended a more challenging undergrad college? She's doing research that will benefit humanity. I can't do this, most people can't do this, but she can. I think kids like mine should be able to go to the very best undergraduate academic institutions regardless of their parents' income or savings. Why punish brilliant kids like mine for having average parents like me who don't make enough money to save $400K for college?

What was the top undergrad she was accepted into and how much FA did they offer?

From what I know about Ivies and other top schools, they are extremely generous with FA for the true middle class families. However, if your HHI is $200K+ , you aren't middle class.

She got into several "top" colleges, but we got little FA. The in-state option was by far the best option financially.

We are definitely middle income. And we have three other children to put through college.

Ivies and similar school do not offer great FA to donut hole families like us. We got something like $8K in FA from one school, but that's it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I grew up working class in the 1980s. I was accepted into every Ivy and top school I applied to, and the tuition at my college was about the same as my family's household income. So, I obviously benefitted tremendously from financial aid. Today, I earn a very good salary and my kid isn't going to have to worry about paying for school. But it is freaking ridiculous that the costs are what they are, even for schools that are nowhere near the level of a Stanford or Harvard. Just because I'm able to provide this level of financial resources to my kid doesn't mean that it's right that all parents should have to feel like this is a responsibility, or that they've failed if they don't have $400K set aside. I'm well aware of how rarified it is to be in my financial position. This is NOT NORMAL. These costs are out of this world. We might not be able to change all of the policies that support this insanity anytime soon. But at the very least, we should at least be able to have an honest and open conversation where nobody tries to gaslight others about this f'd up situation we all finds ourselves in.

NO. Having a fully funded pre-paid college plan is not the equivalent of being a responsible parent.

YES. A brilliant student with a ton of potential should be able to go to the school that will best nurture that brilliance. We need more schools and fed dollars that will make up the difference between a family's ability to pay and the cost of attending. This is a societal investment. We need to power out our best and brightest so that we can continue to lead the world in innovation. You don't get excellence by making your best and brightest go to a middle of the road school in a place where mediocrity is considered good enough. There is absolutely no way I'd be making the contributions to society that I can currently am if I'd stayed in my local community doing some 2+2 program. I've never seen a single person from my neighborhood survive the first two years of community college without falling off track. Those programs are completely unworkable for people living in 2-bedroom houses with 6 people and families with lots of drama that is a normal part of life in the working class and the poor. Never mind that in most American cities the public transportation systems are terrible so any student attending community college classes is going to need a car and gas & parking money, in which case they may as well have paid tuition at the good school out of town where they could have thrived. And at almost every one of those "live away" campus schools you don't need a car. Trust me, very few of the undergrads in Cambridge and Palo Alto have cars.

I couldn't agree more. Excellent post, PP.

My brilliant child went to a mediocre state college that we could afford. I wish I'd been able to send this child to a top college, but that was not within our means. We got some FA, and some merit aid at a few private colleges, but the in-state option (with merit aid) was by far the cheapest, even though it wasn't what my child needed. She's in grad school now at the best program in the US (if not the world) for her particular specialty. She graduated at the top of her class in college with every honor the school had to offer. But for the first couple years of grad school, she struggled to rise to the level of her peers, most of whom had attended top universities and colleges. She would not have struggled had she attended a college at her level for undergrad. There must be a better way to apportion education in the US to meet the needs of kids like mine. She's OK, but how much further along in her research would she be now had she attended a more challenging undergrad college? She's doing research that will benefit humanity. I can't do this, most people can't do this, but she can. I think kids like mine should be able to go to the very best undergraduate academic institutions regardless of their parents' income or savings. Why punish brilliant kids like mine for having average parents like me who don't make enough money to save $400K for college?

What was the top undergrad she was accepted into and how much FA did they offer?

From what I know about Ivies and other top schools, they are extremely generous with FA for the true middle class families. However, if your HHI is $200K+ , you aren't middle class.

She got into several "top" colleges, but we got little FA. The in-state option was by far the best option financially.

We are definitely middle income. And we have three other children to put through college.

Ivies and similar school do not offer great FA to donut hole families like us. We got something like $8K in FA from one school, but that's it.

Just looked at some that were easy to find. In Princeton, families making $100-120K get an average award of $51K which covers full tuition and 39% of room+ board. UChicago gives free tuition to families earning under $125K with typical assets. Rice does the same for under $130K. Most other top schools are giving money in the same ballpark. If you only got $8K from just one of the schools you are either not middle income, have significant assets or applied to need aware schools, which are not top schools, sorry.

[Anonymous]

We have 2.5million in assets and close to retirement, you can say we have the money but it would be financially irresponsible to spend 40k for each of our 3 kids. However, the tops schools think we can afford to pay without aids based on our assets

[Anonymous]

Anonymous wrote:We have 2.5million in assets and close to retirement, you can say we have the money but it would be financially irresponsible to spend 40k for each of our 3 kids. However, the tops schools think we can afford to pay without aids based on our assets

At a very modest 4% post-tax annual return, your assets will bring you $100K/year. Yeah, you can afford it.

[Anonymous]

"Just looked at some that were easy to find. In Princeton, families making $100-120K get an average award of $51K which covers full tuition and 39% of room+ board. UChicago gives free tuition to families earning under $125K with typical assets. Rice does the same for under $130K. Most other top schools are giving money in the same ballpark. If you only got $8K from just one of the schools you are either not middle income, have significant assets or applied to need aware schools, which are not top schools, sorry."

This is a new thing. It wasn't like this even 10 years ago. Plus, they have more than one kid that they'll need to send to college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have 2.5million in assets and close to retirement, you can say we have the money but it would be financially irresponsible to spend 40k for each of our 3 kids. However, the tops schools think we can afford to pay without aids based on our assets

At a very modest 4% post-tax annual return, your assets will bring you $100K/year. Yeah, you can afford it.

I can afford To spend 80k out of 100k/year for 8 years for colleges??

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have 2.5million in assets and close to retirement, you can say we have the money but it would be financially irresponsible to spend 40k for each of our 3 kids. However, the tops schools think we can afford to pay without aids based on our assets

At a very modest 4% post-tax annual return, your assets will bring you $100K/year. Yeah, you can afford it.

I can afford To spend 80k out of 100k/year for 8 years for colleges??

You have an income from employment, correct?

[Anonymous]

What pisses me off if that the assets assessment doesn't take into account where the family started, like most things in life.

I couldn't start saving for my retirement till I paid off my student loans. And then I needed to save for a house down payment because my family can't help since they're living on a shoestring. And as soon as my kids were born we started saving for their school.

Meanwhile, another family with our same HHI could have been saving for their own kid's school without having to pay student loans, so they saved more for school. They may have been gifted a house down payment. But we're all expected by the schools to contribute about the same amount, based on our incomes. Meanwhile, my retirement account is a fraction of theirs.

[Anonymous]

Anonymous wrote:What pisses me off if that the assets assessment doesn't take into account where the family started, like most things in life.

I couldn't start saving for my retirement till I paid off my student loans. And then I needed to save for a house down payment because my family can't help since they're living on a shoestring. And as soon as my kids were born we started saving for their school.

Meanwhile, another family with our same HHI could have been saving for their own kid's school without having to pay student loans, so they saved more for school. They may have been gifted a house down payment. But we're all expected by the schools to contribute about the same amount, based on our incomes. Meanwhile, my retirement account is a fraction of theirs.

That's why schools use the CSS profile to figure this all out. You realize that FAFSA gives aid only to really low income (PELL grants) and establishes loan awards. Nobody with even a moderate income is getting much other than loans from the FAFSA.

Then schools with the higher price tags use the CSS profile and sometimes specialized institutional forms to work out all these details after that point. These figure in a lot more, including the things you think are unfair.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have 2.5million in assets and close to retirement, you can say we have the money but it would be financially irresponsible to spend 40k for each of our 3 kids. However, the tops schools think we can afford to pay without aids based on our assets

At a very modest 4% post-tax annual return, your assets will bring you $100K/year. Yeah, you can afford it.

I can afford To spend 80k out of 100k/year for 8 years for colleges??

3 kids x $40K/year x 4 year school = $480K, that's 6 years of $80K, not 8.

You won't have social security when you retire? That's another $3K/month for you and your spouse each, so $72K/year. Supposedly your mortgage is paid off by retirement, so yes, I think you can tighten your belt for 6 years as a retired couple and "survive" on $90K income if you don't want to touch the principal or find some side gig. Or, you can postpone retirement for another 2-3 years.

No, you are not entitled to keep your lifestyle and sit on $2.5M while your 3 kids attend pricey schools for free.

[Anonymous]

I think the above math is off, elite colleges are 75/80k per year, not 40k so 3 kids would cost PP $960k right?

[Anonymous]

Anonymous wrote:We have 2.5million in assets and close to retirement, you can say we have the money but it would be financially irresponsible to spend 40k for each of our 3 kids. However, the tops schools think we can afford to pay without aids based on our assets

My understanding is that retirement assets will be off limits. But out of 2.5M (and you apparently have a current income on top of that), you can, theoretically, afford to spend $1M full pay (80k/yr for 3 kids).

Whether that's a responsible use of your money is an entirely different question. My opinion, it would be prudent to plan at least 40k/yr if you want your kids to be able to choose privates ranked beyond top 50 after being awarded merit scholarships. For slightly lower prices, in the 30s, look at your public options in state. For getting down below 20k/yr, you are looking at huge scholarships approaching full tuition, such as U Alabama. Room and board alone will be 15k/yr at most places.