Which private colleges have the best financial aid for donut hole families?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:or-I think it is great that people save for college via 529s, or family money, or however. But it's a cold hard fact that many families can not save a lot. Private colleges want to fill their classes too. And they do that by making the cost similar or slightly higher than the state schools (for the people who are not wealthy), so the wealthy will pay "ticket" but most will not. My advice is to apply your kid to state schools AND private, I think you will be pleasantly surprised to see that privates are a lot closer in cost to state schools than you ever thought. Many state schools are not a bargain anymore btw.

For all you savers out there, be happy that you figured out a way to save, please don't crap on the non-savers and deem them and their kid's destiny as "state schools bc you didn't save" it is not the case. Non savers have great outcomes too, non-savers make calculated decisions based on the set of issues they have at the time and many of them have incredible outcomes. Cast a wide net, private/public, and make your decisions after the acceptances but DO NOT be discouraged from applying to "financial reaches."

If you are making $200K there is no excuse not to save. People are acting like an income of $200K is like $50K, which its not. Life is about choices so if someone is living in an $800K house on a $200K income while the rest of us live in a house under $500K, then, I don't have much empathy as that extra money could have been saved for college. Its one thing if you cannot due to income or other reasons (SN child, family support, etc) but if you can and choose not to, you are selfish. Yes, you should apply to both but we are clear that our kids will not take out loans and we will pay fully for a state school and if we can do more, great but we'd rather use that money to graduate school or help with a house. Plenty of people have great outcomes NOT saving but its not a chance I want to take. My parents paid for college and it made life easier. My spouse didn't and had to do military and didn't get his degree till much later and life was much harder. We want to set up ours well in life and give them the best start we possibly can. Part of parenting is teaching kids about money and money choices.

Again, live and let live. Your parents paid for your education. Congrats. You make your choices and I'll make mine. No one is looking for your empathy. If I decide to not save, take vacations, decide to quit my job and SAHM, decide to take my kids on Euro vacations to teach them history or just eat creme brûlée...it's really not your business. Just don't be bitter if I make 200k, have no savings and COMPLAIN that my kid gets into a selective college for 25K all in. It's not your kid and not your money. Or as I like to say, "not your monkey, not your circus" You live your life and save like your parents did and send your kid to the best school he gets into. I'll be fine.

I don't care what choices you make but I don't want to hear how you cannot afford the college you want for your kids or they want as you were too stingy to save. And, you can save with a SAHP or even if you choose to travel. You'll be fine as you can choose not to pay and leave your kids with huge amounts of loans to pay back.

Just curious about the amount you think a family earning $200k for the last 10 years should have saved for college.

How much was saved prior to that?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Out of curiosity, I typed my numbers into Rice's NPC ($180k HHI, $425k home equity, $80k cash, $170k nonretirement investments including $65k in a 529). Student and Parent Contribution: $65,700.

I noticed that they don't ask separately for 529 and non-529 accounts. Apparently, they don't care since they want all my money anyway over 4 years. But at least they wouldn't make me take out a home equity loan. Here's something!

My question is, once you exhaust the 529 and cash, will you get aid? Does anyone know how this works?

Generally, they will end up qualifying for subsidized loans, nut little else.

[Anonymous]

"I just ran Harvard's NPC with our HHI of 200k. I was pretty hopeful given this post above. But because we've scrimped and saved significantly for our 3 kids' college, we'd get no financial aid, according to the calculator. (Without the savings, it wasn't $23k, but the cost did jump significantly when I added the 529 funding in the assets)."

One "tip" is that just because you don't get FA from Harvard the first year doesn't mean you won't get some when you have 2 or even 3 in college.

That is where we stand our HHI is almost 50% higher than yours and we could easily pay for Harvard out of our savings but they believe that our family contribution is $75k per year.

Harvard's NPC says the years we have one in school, we pay it all. The years we have a second in school, Harvard gives us aid that is pretty much equal to the 2nd college's COA.

Now DC only needs to get into a school with a huge endowment. Another "tip" is that while Harvard's endowment is the largest, other HYPSMC schools are similar.

[Anonymous]

Anonymous wrote:Why wouldn’t it go up if you have savings? That is literally what 529s are for.

They don’t expect you to deplete your retirement or sell you home, but any other savings and part of current income, in their view, is available for college.

Consider family A and family B. Let's say both make $200k HHI for 10 years. Family A takes their kids on Euro vacations every year. Family B does not and saves the money in a 529 instead. Both apply to Harvard and are accepted. Family A has no saved assets. They pay $23k/year. Family B has assets, so they are asked to pay all the money in their 529 and then $23k/year on top.

That's how I read PP at least.

[Anonymous]

There's another insight here with respect to EFC that I just realized. It is dumb to contribute to a 529 unless your 401k is maxed out.

[Anonymous]

Anonymous wrote:My question is, once you exhaust the 529 and cash, will you get aid? Does anyone know how this works?

They ask for home equity and nonretirement investments as well and take them into account. So if you were hoping to move your cash into 10y T-Bills to qualify for FA, or quickly pay down your mortgage to deplete your cash savings, that won't work. Buying a new car or other non-investment asset seems fair game.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Out of curiosity, I typed my numbers into Rice's NPC ($180k HHI, $425k home equity, $80k cash, $170k nonretirement investments including $65k in a 529). Student and Parent Contribution: $65,700.

I noticed that they don't ask separately for 529 and non-529 accounts. Apparently, they don't care since they want all my money anyway over 4 years. But at least they wouldn't make me take out a home equity loan. Here's something!

My question is, once you exhaust the 529 and cash, will you get aid? Does anyone know how this works?

Not really. As much as people like to say they're being penalized for having saved, the formulas are not that harsh. Rule of thumb, at donut hole level, every extra dollar of savings raises tuition by 5%, every extra dollar of income raises tuition by 50%. So if you spend down 65K in savings to pay for freshman year, possibly next year's calculation will go down by $3250. But that's assuming income is level. If that same year your income increases by $6500, it's a wash.

[Anonymous]

Anonymous wrote:Not really. As much as people like to say they're being penalized for having saved, the formulas are not that harsh. Rule of thumb, at donut hole level, every extra dollar of savings raises tuition by 5%, every extra dollar of income raises tuition by 50%. So if you spend down 65K in savings to pay for freshman year, possibly next year's calculation will go down by $3250. But that's assuming income is level. If that same year your income increases by $6500, it's a wash.

Interesting. What is the source of your knowledge if I may ask? The NPC seem to be web applications that provide output to an input. They could probably be easily reverse-engineered, and I'd be surprised if no one has done that, but are the formulas published anywhere?

Second, are you saying that there's a cumulative/compounding effect from spending down savings over the 4 years, i.e., in year 1 you enter $65K in saving, then you spend that in year 1, and then you're considered to have saved $0 for year 2? That would create perverse incentives, wouldn't it?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Out of curiosity, I typed my numbers into Rice's NPC ($180k HHI, $425k home equity, $80k cash, $170k nonretirement investments including $65k in a 529). Student and Parent Contribution: $65,700.

I noticed that they don't ask separately for 529 and non-529 accounts. Apparently, they don't care since they want all my money anyway over 4 years. But at least they wouldn't make me take out a home equity loan. Here's something!

My question is, once you exhaust the 529 and cash, will you get aid? Does anyone know how this works?

Generally, they will end up qualifying for subsidized loans, nut little else.

To the pp - how do you know this to be the case? How can they expect a family that spent down all its savings to pay?

[Anonymous]

Anonymous wrote:There's another insight here with respect to EFC that I just realized. It is dumb to contribute to a 529 unless your 401k is maxed out.

This is what the professionals advise, yet if you do this and earn $200k, they will also expect you to be full pay everywhere except the most well endowed schools. Those schools are hard to get into. So then you are stuck having to tell your kid about the financial limits.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Out of curiosity, I typed my numbers into Rice's NPC ($180k HHI, $425k home equity, $80k cash, $170k nonretirement investments including $65k in a 529). Student and Parent Contribution: $65,700.

I noticed that they don't ask separately for 529 and non-529 accounts. Apparently, they don't care since they want all my money anyway over 4 years. But at least they wouldn't make me take out a home equity loan. Here's something!

My question is, once you exhaust the 529 and cash, will you get aid? Does anyone know how this works?

Generally, they will end up qualifying for subsidized loans, nut little else.

To the pp - how do you know this to be the case? How can they expect a family that spent down all its savings to pay?

This is why merit aid > FA even if it means attending a “lower ranked” school. The uncertainty is ... problematic.

[Anonymous]

University of Rochester gives big merit scholarships to attract high quality students. My H went for free basically.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Look up schools that meet 100% of demonstrated need. If your EFC according to FAFSA is $35K or whatever, then you will pay $35K at a school that meets 100% of demonstrated need.

We've been through this many times on this forum -- "demonstrated need" is what the school says your need is and bears little, if any, relationship to reality.

+10000
They have many accounting tricks they use. They have exceptions to lots and lots of things that you would never think of. Many schools offer a low freshman rate followed by increasing amounts you pay. Our private calls that “paying your share”

[Anonymous]

Harvard PP please STFU. Everyone knows Harvard will pay 100% for any MC student. We get it. Your DC got into Harvard. Practice saying Boston. You’ll fit in better

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:or-I think it is great that people save for college via 529s, or family money, or however. But it's a cold hard fact that many families can not save a lot. Private colleges want to fill their classes too. And they do that by making the cost similar or slightly higher than the state schools (for the people who are not wealthy), so the wealthy will pay "ticket" but most will not. My advice is to apply your kid to state schools AND private, I think you will be pleasantly surprised to see that privates are a lot closer in cost to state schools than you ever thought. Many state schools are not a bargain anymore btw.

For all you savers out there, be happy that you figured out a way to save, please don't crap on the non-savers and deem them and their kid's destiny as "state schools bc you didn't save" it is not the case. Non savers have great outcomes too, non-savers make calculated decisions based on the set of issues they have at the time and many of them have incredible outcomes. Cast a wide net, private/public, and make your decisions after the acceptances but DO NOT be discouraged from applying to "financial reaches."

If you are making $200K there is no excuse not to save. People are acting like an income of $200K is like $50K, which its not. Life is about choices so if someone is living in an $800K house on a $200K income while the rest of us live in a house under $500K, then, I don't have much empathy as that extra money could have been saved for college. Its one thing if you cannot due to income or other reasons (SN child, family support, etc) but if you can and choose not to, you are selfish. Yes, you should apply to both but we are clear that our kids will not take out loans and we will pay fully for a state school and if we can do more, great but we'd rather use that money to graduate school or help with a house. Plenty of people have great outcomes NOT saving but its not a chance I want to take. My parents paid for college and it made life easier. My spouse didn't and had to do military and didn't get his degree till much later and life was much harder. We want to set up ours well in life and give them the best start we possibly can. Part of parenting is teaching kids about money and money choices.

Again, live and let live. Your parents paid for your education. Congrats. You make your choices and I'll make mine. No one is looking for your empathy. If I decide to not save, take vacations, decide to quit my job and SAHM, decide to take my kids on Euro vacations to teach them history or just eat creme brûlée...it's really not your business. Just don't be bitter if I make 200k, have no savings and COMPLAIN that my kid gets into a selective college for 25K all in. It's not your kid and not your money. Or as I like to say, "not your monkey, not your circus" You live your life and save like your parents did and send your kid to the best school he gets into. I'll be fine.

I don't care what choices you make but I don't want to hear how you cannot afford the college you want for your kids or they want as you were too stingy to save. And, you can save with a SAHP or even if you choose to travel. You'll be fine as you can choose not to pay and leave your kids with huge amounts of loans to pay back.

Just curious about the amount you think a family earning $200k for the last 10 years should have saved for college.

How much was saved prior to that?

Let’s say $40k for the first 8 years while their income level was more modest and they also saved for a home and paid off student loans. Last 10 years HHI of $200k. Would they be easily able to save enough to afford a $75k per year college?