How much does college cost?

[JanetC]

According to this article, a private college costs about 20 percent of your income after financial aid. If you have savings, add about a third more.

These people didn't consider merit aid or low-cost in-state schools, so basically a worst case scenario for costs.  They also tried to fund college solely through income, then through savings, then through home equity rather than through a balance of funding sources. 

Despite the flaws, I think it's a good overview for families to understand how financial aid works if you're not trying to work the system for your best price 

https://qz.com/1254737/the-actual-costs-of-us-college-financial-aid/

[RootAnn]

This analysis show that savers are punished (by being expected to contribute more) than spenders. Some people insist this is not the case, but I had never seen data that showed either way.

[Frances]

It seems to be focusing primarily on very selective schools that likely promise to meet full need, so probably not very realistic for most families. It was interesting to read about the % of home equity. My husband had finished professional school only a few years before our son started college, so our savings, except retirement, were pretty low. But we did have considerable equity in our home. Although we were willing to pay the full boat at some of the highly selective LACs where they offer no merit aid, it would have been a stretch, but we would not have borrowed against our home to do it. I guess that’s why it would have taken considerably more than 20% of our income per year. In the end, he chose a cheaper option for reasons unrelated to finances.

[JanetC]

Savings are double-edged sword.

Income is assessed at a much higher percentage than savings year-by-year, so high savings doesn't increase the EFC as quickly as high income would. 

Savers pay a higher out of pocket price (not counting merit awards and/or low-tuition options outside the financial aid formulas), but they are also less likely to borrow.

Money gives you options. But, yes, they expect you to spend it. 

[Farrar]

Our home value has nearly tripled since we bought, so we have a huge amount of equity we didn't put in. We don't really want to move. We wanted to live here, so we basically staked a claim in a 'hood we felt would get better. And college will punish us for that. Or, punish is too harsh a word but it sure feels like it. I mean, 70% of the equity of our house is a heck of a lot of money.

[RootAnn]

41 minutes ago, JanetC said:

Savers pay a higher out of pocket price...

Money gives you options. But, yes, they expect you to spend it. 

Yes, this shows that people who have been able to save will be expected to pay more than someone else with the same income. So, if we had spent instead of saved (like our neighbors who are always going out of country for vacations, own a boat, buy new cars every few years, and have the newest 'toys'), we would be expected to pay less now. (For the record, neighbors have a much higher income as they are two income w/one being a doctor.) 

5 minutes ago, Farrar said:

Or, punish is too harsh a word but it sure feels like it. 

It does feel like this.

[catz]

I only wish our EFC were close to 20% of our income.  Yes, feel like we're hurt because DH is upper 50's and we have a good nest egg for retirement and our home is almost paid for.  I think EFC should really be no more than 10-15% of anyone's income.  Full pay schools won't do anything for us  in most cases.  We're right on the cusp.  And I'm not complaining.  I understand it is harder for low income families.  We live a comfortable life.  But we live in a modest 3 bedroom home.  We drive our very basic vehicles into the ground.  Our family vacations are modest.   My kitchen has flooring coming up and was last done in the early 80's.  I scrub my own toilets and floors.  I use coupons and price shop and my kids wear thrift store finds regularly. It is not lifestyles of the rich and famous over here by any stretch.  So 60-70K a year times 2 kids is not at all realistic for us despite being full pay on paper.  

For some perspective, here's the average family profile of students at Yale (a meets need school).  

https://www.nytimes.com/interactive/projects/college-mobility/yale-university

Note that 69% of students have FOO earning in the top 20% (> $110,000), and 19% have income in the top 1% (> $630,000).   The average income is $192,000.  These schools can call themselves need blind and meets need until the cows come home but these schools are still playgrounds of the elite.  

[Pawz4me]

My mother passed away the year that DS22 was a junior in high school. We'd already done the research, we'd run the EFC and NPC numbers. They were high but not shockingly so to us. DH made a good income and we'd saved. But when the nitty gritty time came and we had to report the inheritance as more savings  . . . what it did to our EFC was absolutely mind boggling. We would have been over the top happy with only twenty percent of income! Although it's a bit of a pet peeve of mine that people compare their EFC to their income. The PTB assume you're saving along the way, not paying out of current income.

[JanetC]

@Farrar Only private schools that ask for the CSS Profile know your home equity. Even a few Profile schools ignore home equity. The FAFSA does not ask about your primary residence.

If most of your net worth is in your home, be choosy about where your kids apply. 

[catz]

5 minutes ago, Pawz4me said:

Although it's a bit of a pet peeve of mine that people compare their EFC to their income. The PTB assume you're saving along the way, not paying out of current income.

Well that's true, but it also doesn't seem that weird to me that the calculation be based on your current income.  We do have some in savings for each of our kids for colleges.  But part of our plan was also having our mortgage gone when our oldest went to college.  So there are different ways to finance college without loans.  We will literally have no debt by the time our junior starts college.   We can comfortably afford the state flagship.  Which is nice - many cannot and financial aid and merit is lame for that. 

[JanetC]

@FuzzyCatz Assets in IRS approved retirement accounts (IRA, 401k, etc) are not reported on the FAFSA, but other parts of your nest egg are definitely assessed. 

Assets can only be sheltered that way accordingly to maximum annual contributions, so you have to move the money over time. For example, one way to move assets out of consideration for financial aid is by maxing out 401k at work even if you now have to tap your taxable-account nest egg to meet expenses. 

[Farrar]

6 minutes ago, JanetC said:

@Farrar Only private schools that ask for the CSS Profile know your home equity. Even a few Profile schools ignore home equity. The FAFSA does not ask about your primary residence.

If most of your net worth is in your home, be choosy about where your kids apply. 

We don't have any (real) public universities in our not-a-state, so my kids would need to get into them as out of state students, which is limiting, though they would get a discount for being DC residents. Then again, the discount doesn't bring the cost down to in state levels in most places and obviously they'd be going out of state, which would mean room and board unless they somehow got into College Park, which honestly isn't where they'd want to be, I think. In the end, I'm almost positive that we'll be full pay for both kids.

[catz]

19 minutes ago, JanetC said:

@FuzzyCatz Assets in IRS approved retirement accounts (IRA, 401k, etc) are not reported on the FAFSA, but other parts of your nest egg are definitely assessed. 

Assets can only be sheltered that way accordingly to maximum annual contributions, so you have to move the money over time. For example, one way to move assets out of consideration for financial aid is by maxing out 401k at work even if you now have to tap your taxable-account nest egg to meet expenses. 

I know, but it's probably not financially sound to put 100% of savings into an IRA either.  Our financial advisers we've had over the years always recommend a diversified portfolio.   We have always maximized opportunities like 401K though.  

 

ETA - for example, we've always had that 6 month salary invested and available that is often recommended in case of loss of employment for whatever reason.  My husband's company has laid off a bunch of people and he could be next at any time.  That hurts us.  I would think calculations would take smart saving and investing into account.  We are going to have a bunch of struggling retirees the way things are going.  

[JanetC]

Diversified portfolio is separate from IRA's versus other types of accounts. Your IRA can be in a diversified mix of high and low risk investments.

You should also have money in 529 plans for your kids. These funds aren't hidden from the FAFSA, but do have federal and often state income tax benefits. When you sell a taxable investment, the capital gains are taxable and also become a line on your tax return which further increases your EFC (if you are not already full pay), while the 529 is capital gains tax free when used for college.

Finally, fix your floor! If your assets are high enough to be full pay, you shouldn't neglect home maintenance. 

[JanetC]

23 minutes ago, Farrar said:

I think. In the end, I'm almost positive that we'll be full pay for both kids.

Don't give up! There are ways besides in-state tuition to avoid full pay private school costs. The primary one is merit aid, but even those tuition discount programs are usually less than full pay private school.

[catz]

5 minutes ago, JanetC said:

Diversified portfolio is separate from IRA's versus other types of accounts. Your IRA can be in a diversified mix of high and low risk investments.

You should also have money in 529 plans for your kids. These funds aren't hidden from the FAFSA, but do have federal and often state income tax benefits. When you sell a taxable investment, the capital gains are taxable and also become a line on your tax return which further increases your EFC (if you are not already full pay), while the 529 is capital gains tax free when used for college.

Finally, fix your floor! If your assets are high enough to be full pay, you shouldn't neglect home maintenance. 

LOL.  Well we do have 529 plans.  And we do have a diversified IRA.  And a diversified nest egg/savings/investments.  We are in the process of moving money around a little bit right now to clean things up.  We're working with a financial adviser.  Who thinks every kid should go to a state school and live at home.    Well, that's not realistic at least for our oldest at least.  I'm grateful we can swing the state flagship for sure.  I know we are in a better position than many.

And fixing the floor sounds easier than it is.  It doesn't make sense to do JUST the floor.  Our house was built 100+ years ago.  We have five layers of flooring, along with cheap cabinetry, etc.  We are in the process of getting bids but doing our kitchen without structural house changes is going to be 70-80K and do we want to commit to that the year before we make a college decision or do we want to sit on it for a year or two and see what happens and what our final price tag for kid #1 will be?  Still thinking on that.  May get some other bids.  We do some home updates and maintenance every year.  In the past five  years we've done landscaping, central AC, new roofing, paint, etc.  We aren't living in a hovel either.  

Anyway - none of that makes 60K+ a year more realistic for us for 2 with maybe 10 years to retirement age for my husband.   Luckily my oldest should be high stat so we will be chasing around for merit for him.  

[regentrude]

3 hours ago, JanetC said:

According to this article, a private college costs about 20 percent of your income after financial aid. If you have savings, add about a third more.

I think this statement is misleading. Parents are expected to contribute 20% of their income (as per FAFSA formula). That does not mean that is the actual cost; the college may NOT bridge the gap between the EFC and their cost and let the family figure out where to find the money.

Also, this quoted statement about home equity makes no sense, sinceColleges have no information about home equity, unless they require the CSS profile, which few schools do.

Quote

Finally, we wanted to understand how much of the equity in your house colleges expect you to use. For this analysis, we simply looked at the cost expectations for a family earning $100,000 per year who has $150,000 in home equity but no other savings.

The result? Colleges expect you to use 69% of your home equity for a full four-year degree if you’re going to use only the equity in the house. 

[regentrude]

2 hours ago, Farrar said:

Our home value has nearly tripled since we bought, so we have a huge amount of equity we didn't put in. We don't really want to move. We wanted to live here, so we basically staked a claim in a 'hood we felt would get better. And college will punish us for that. Or, punish is too harsh a word but it sure feels like it. I mean, 70% of the equity of our house is a heck of a lot of money.

But the information in the article is incorrect. Unless it is a college that requires the CSS profile, the college will have absolutely no information on your home value. The FAFSA does not ask for your home value and the equity in it, and that's the info most colleges use to base their financial aid calculations on.

[frogger]

2 hours ago, Pawz4me said:

My mother passed away the year that DS22 was a junior in high school. We'd already done the research, we'd run the EFC and NPC numbers. They were high but not shockingly so to us. DH made a good income and we'd saved. But when the nitty gritty time came and we had to report the inheritance as more savings  . . . what it did to our EFC was absolutely mind boggling. We would have been over the top happy with only twenty percent of income! Although it's a bit of a pet peeve of mine that people compare their EFC to their income. The PTB assume you're saving along the way, not paying out of current income.

 

Maybe, but it doesn't ask for past income so the first 5 years of my son's life we lived in official poverty and couldn't save a dime. The next ten years we were lower middle class and started saving for retirement because we could continue living like we were in poverty.  Three years ago our ship finally came in and hard work paid off and DH moved to a position where he got a 40% raise and then another big raise the year after. We still live extremely frugal. I feed my family on $4 a day for example and I can't complain. I'm thankful but it pushed all need based funding completely out of reach. Even if we saved 20% while living under the poverty line it wouldn't make a dent in the current situation even with interest. 

 

Life isn't fair and we are blessed and can afford in state but no formula will be able to account for the variety of life circumstances is my main point. 

[JanetC]

The article was looking at 32 private universities, using the MyIntuition net price calculator, so yes it was using the Profile and yes they were net prices atmthisem32 schools, not EFCs.

[Frances]

17 minutes ago, frogger said:

 

Maybe, but it doesn't ask for past income so the first 5 years of my son's life we lived in official poverty and couldn't save a dime. The next ten years we were lower middle class and started saving for retirement because we could continue living like we were in poverty.  Three years ago our ship finally came in and hard work paid off and DH moved to a position where he got a 40% raise and then another big raise the year after. We still live extremely frugal. I feed my family on $4 a day for example and I can't complain. I'm thankful but it pushed all need based funding completely out of reach. Even if we saved 20% while living under the poverty line it wouldn't make a dent in the current situation even with interest. 

 

Life isn't fair and we are blessed and can afford in state but no formula will be able to account for the variety of life circumstances is my main point. 

We were in a very similar situation with my husband getting two doctorates, not consecutively, after our son was born and me only working part-time when I did work. Ultimately, I think we were only able to keep all options open with no financial aid because we only had one child, my husband’s new career paid much better than his old one, and I had gone back to work full-time to put my husband through a professional doctorate program. I wasn’t planning to make it a career, but with college looming for our son and the position being somewhat flexible, it seemed prudent to keep the job after he finished.

And we also still live frugally. Our current splurge, if you can call it that, is finally putting some time and money into our 100 year old house. Fortunately, my husband can do almost all of the work himself, so the biggest cost is supplies.

[Farrar]

1 hour ago, regentrude said:

But the information in the article is incorrect. Unless it is a college that requires the CSS profile, the college will have absolutely no information on your home value. The FAFSA does not ask for your home value and the equity in it, and that's the info most colleges use to base their financial aid calculations on.

I understand that. However, we don't have public universities in our not-a-state, which is limiting. Our "university" is basically a community college that doesn't even allow dual enrollment (bah). So all couple hundred or so CSS requiring schools, which is a lot of places, are off the list? Still feels like a punishment. It's especially hard knowing that it's a lot of schools that my kids, who - we're really just starting out, so who knows what the future will bring - but two kids who are interesting and hard working and pretty smart, but who are simply not naturals at standardized tests for a whole host of reasons. And there are a number of smaller colleges that are willing to look at the whole student that are on that list (as well as a lot of schools that will be out of reach, of course). Obviously there are others. Everyone has limitations to their college search. And I don't mean to overstate. We're very lucky that dh earns a decent income. We're hardly one percenters, but we're solidly middle class. We're lucky to have a home in our neighborhood, even if part of how we afforded it was living through some gang war years here. I do recognize that we have a lot of privilege. But it's hard to realize that for many schools, we'd be better off if we were renting. Like, my kids could apply to Hampshire (dh's alma mater) and potentially pay much less than they'd pay if they went since we own this house that's worth so much more because we bought at the right time.

Who knows what will happen. My kids could miraculously get better at multiple choice questions, BalletBoy could miraculously join a young company instead of college (his dream anyway), Mushroom could decide to go into the trades, we could win the lottery, Congress could take away our out of state discount, college loans and calculations could change, and regardless, a way will open... It's four years away for us. Who the heck knows. But in the meantime, this makes me pout.

[mjbucks1]

Frances pointed this out, but I think it is very important to note that most schools are not 'meets need', and the ones that do are usually very selective. We chose to save for retirement, so we have very little saved for college. While my ds did apply to some 'meets full need' (very selective schools), he did not get into them. We did have schools he applied to that we could afford (thankfully). The selective school he did get into gave him over a $25,000/year scholarship, but it would have still cost $40,000/year. We did not get anything extra because we did not save for college. I should add that the plan was for me to go back to work full time once our kids were in college (I am a PT and have a company I work for on Saturdays and switching to full time would have been easy). But we had another child who is only nine, so things have changed.  I am not complaining at all. We have made choices, and so far everything has worked out, but it has also meant that our kids have not/will not go to their first choice schools. But, they will still graduate debt free which is HUGE!  

[catz]

Running the NPCs on different schools in our case, it is not like schools that don’t use the CSS or home equity are really more generous than those that do.  They often are not meets need.   State schools are just cheaper in general.  I just think there are many good reasons why your EFC which can vary widely by school may not at all be a realistic number to meet for people who even are full pay on paper   Our state flagship is about 20% of our income   A little more actually.   That is a realistic figure for us.   There is a reason that 19% of students at Yale are fr9m families that earn over 630K    That would make 60-70k seem pretty reasonable at 10% of income   

My oldest kid got much better at timed multiple choice tests as he got older FWIW.  Lol.  I have no regrets that our state requires standardized testing.  

[regentrude]

1 hour ago, Farrar said:

I understand that. However, we don't have public universities in our not-a-state, which is limiting. Our "university" is basically a community college that doesn't even allow dual enrollment (bah). So all couple hundred or so CSS requiring schools, which is a lot of places, are off the list? Still feels like a punishment.

No, not every school that uses the CSS profile asks about your house in the first place, and not every school expects you to put that much equity into paying for college.

And there are plenty of private colleges who do not require the profile.

[regentrude]

2 hours ago, JanetC said:

The article was looking at 32 private universities, using the MyIntuition net price calculator, so yes it was using the Profile and yes they were net prices atmthisem32 schools, not EFCs.

So phrasing their statements as "colleges expect you...." is misleading, because they are speaking for a very small number of very specific colleges, not "colleges" in general.

[Momto6inIN]

Too much 

[8filltheheart]

This gives info on home equity http://www.thecollegesolution.com/will-your-home-equity-hurt-financial-aid-chances/

[freesia]

5 hours ago, FuzzyCatz said:

I only wish our EFC were close to 20% of our income.  Yes, feel like we're hurt because DH is upper 50's and we have a good nest egg for retirement and our home is almost paid for.  I think EFC should really be no more than 10-15% of anyone's income.  Full pay schools won't do anything for us  in most cases.  We're right on the cusp.  And I'm not complaining.  I understand it is harder for low income families.  We live a comfortable life.  But we live in a modest 3 bedroom home.  We drive our very basic vehicles into the ground.  Our family vacations are modest.   My kitchen has flooring coming up and was last done in the early 80's.  I scrub my own toilets and floors.  I use coupons and price shop and my kids wear thrift store finds regularly. It is not lifestyles of the rich and famous over here by any stretch.  So 60-70K a year times 2 kids is not at all realistic for us despite being full pay on paper.  

For some perspective, here's the average family profile of students at Yale (a meets need school).  

https://www.nytimes.com/interactive/projects/college-mobility/yale-university

Note that 69% of students have FOO earning in the top 20% (> $110,000), and 19% have income in the top 1% (> $630,000).   The average income is $192,000.  These schools can call themselves need blind and meets need until the cows come home but these schools are still playgrounds of the elite.  

I think there was a small window in the 80s when these schools were reachable for the middles among us.  That is when my brothers and I were going.  It was a stretch, but doable.  Our expected contribution at a needs met school was actually 50% of my dh's salary (not we have a complicated housing situation that makes that the not quite whole story--house provided by job, credited as income, actual owned property rented in low rent area--but the fact of the matter is, the actual money we could lay our hands on to pay yearly, they thought we could give them half).  So, yeah, I get the message--you actually don't want my son there.  When my grandfather went to Princeton and my grandmother went to Bryn Mwar it was clear--come if you have money. Now, it's like some game--everyone can come!  But it is just not true.  So, my son is going to a school that has a base price almost half of the other school and gave him a load of financial aid.  Somehow they manage to provide a good education for a lot less and make it reachable. 

[freesia]

2 hours ago, Farrar said:

I understand that. However, we don't have public universities in our not-a-state, which is limiting. Our "university" is basically a community college that doesn't even allow dual enrollment (bah). So all couple hundred or so CSS requiring schools, which is a lot of places, are off the list? Still feels like a punishment. It's especially hard knowing that it's a lot of schools that my kids, who - we're really just starting out, so who knows what the future will bring - but two kids who are interesting and hard working and pretty smart, but who are simply not naturals at standardized tests for a whole host of reasons. And there are a number of smaller colleges that are willing to look at the whole student that are on that list (as well as a lot of schools that will be out of reach, of course). Obviously there are others. Everyone has limitations to their college search. And I don't mean to overstate. We're very lucky that dh earns a decent income. We're hardly one percenters, but we're solidly middle class. We're lucky to have a home in our neighborhood, even if part of how we afforded it was living through some gang war years here. I do recognize that we have a lot of privilege. But it's hard to realize that for many schools, we'd be better off if we were renting. Like, my kids could apply to Hampshire (dh's alma mater) and potentially pay much less than they'd pay if they went since we own this house that's worth so much more because we bought at the right time.

Who knows what will happen. My kids could miraculously get better at multiple choice questions, BalletBoy could miraculously join a young company instead of college (his dream anyway), Mushroom could decide to go into the trades, we could win the lottery, Congress could take away our out of state discount, college loans and calculations could change, and regardless, a way will open... It's four years away for us. Who the heck knows. But in the meantime, this makes me pout.

My Dad used to say, "they want us to sell our house and live in a chicken coop in Rockville (back when Rockville was far out lol)."  The house we lived in had quadrupled in price from 1974-1985.

[JanetC]

1 hour ago, regentrude said:

So phrasing their statements as "colleges expect you...." is misleading, because they are speaking for a very small number of very specific colleges, not "colleges" in general.

 

I tried to highlight the limitations of their data as in my original post.

[Farrar]

2 hours ago, freesia said:

My Dad used to say, "they want us to sell our house and live in a chicken coop in Rockville (back when Rockville was far out lol)."  The house we lived in had quadrupled in price from 1974-1985.

If A2 comes here, one of the sites will be walking distance. Dh was like, our home value will go up like 100k... we should cash out and buy a cheaper rowhouse... like in Baltimore. Heh. No chicken coops!

[catz]

5 minutes ago, HeighHo said:

 

I hope you aren't defining elite as top 20%.  A household income of $110k is blue collar in the NYC metro area...its one older parent or two older parents in a skilled job. Its also a HCOL area. 

No that’s not what I’m saying at all.  I’m saying you can have a high income and EFC on paper and live a pretty modest lifestyle and not actually be able to afford your EFC.  We are one of those families.  We live urban.   

On the other hand, the average family income at Yale is 192,000 with 19% over 630k.  The average family income in the us is about 72K.   In no way do these elite schools reflect the average american family or are reasonably affordable for most American families.  What’s affordable for a rural family at 110k that owns their own business with tax shelters and deductions might be vastly different than an urban family scrapping together the same income.  But schools do not care about those distinctions. 

[JanetC]

You guys are giving way too much credit to the amount of thought that goes into the EFC. They aren't making an effort to understand the economic and financial realities of families today.

The FAFSA formula is based on the typical family expenses as recorded by the 1960 census, patched up over the years using statistics the government was already collecting for other purposes, most notably the social security cost of living adjustment. 

When the FAFSA returns something generally affordable, it's almost by accident. 

[Lori D.]

You can get an idea of what your EFC will be without even filling out the FAFSA:

Tony Onink's 2017-18 EFC Quick Reference Chart -- for an instant, very rough idea of your EFC: scroll down on the webpage to the chart, find your AGI (Adjusted Gross Income) figure, read across to the column of how many dependent children (chart allows you to calculate for up to 4 children)

EFC Estimator: Federal Student Aid website FAFSA4caster, or, College Confidential's EFC Calculator, or, College Board's Big College EFC Calculator -- rough calculation of your EFC number, and potential federal financial aid eligibility

FAFSA's 2017-18 EFC formula worksheet -- allows you to calculate out what your FAFSA results would have been for the 2017-18 year

If your head is spinning with all of this, you might check out the videos at Taming the High Cost of College website. While this is a college consulting/financial services website, the free explanations on college costs, financial aid, and the FAFSA/EFC can be helpful. Some of the info videos are immediately accessible, and a few you need to register (for free) on the website to watch. I am NOT affliated with this company, nor have I used them -- just passing on the info, as sometimes videos are helpful in understanding all the ins and outs of financial aid and scholarships. :)

[JanetC]

Another good website for college financial planning videos is

 https://www.capstonewealthpartners.com/resources/college-funding-learning-center/

[Lori D.]

On 4/26/2018 at 9:35 AM, Farrar said:

We don't have any (real) public universities in our not-a-state, so my kids would need to get into them as out of state students, which is limiting, though they would get a discount for being DC residents. Then again, the discount doesn't bring the cost down to in state levels in most places and obviously they'd be going out of state, which would mean room and board unless they somehow got into College Park, which honestly isn't where they'd want to be, I think. In the end, I'm almost positive that we'll be full pay for both kids.

As D.C. residents, it looks like you would be eligible for the DC Tuition Assistance Grant that can be used at: all public institutions -- more than 2500 colleges and universities in the nation and is equal to the difference between the in-state and out-of-state tuition, up to $10,000  per year, with a lifetime maximum of $50,000. (The grant can also be used at participating private non-profit schools in the Washington Metropolitan area, and historically black colleges & universities.)

Other ideas for reducing college costs:

• reduce overall time at college (which reduces cost) through:
•       "2x2" option -- 2 years at local community college to knock out all the gen. ed. credits, then transfer and complete last 2 years at the 4-year school
•       credit by exam (AP; CLEP; DANTES)
•       dual enrollment during high school of credits that count towards high school AND will transfer and count toward a degree
• if the student has high test scores, match up with an automatic scholarship school
• cut room & board costs by looking for a school that partners with an assisted living elder facility -- student gets free room & board at the facility in exchange for spending hours each week with the elderly residents
• apply for a dorm RA position (freshmen are not eligible), which reduces dorm costs or provides $$ towards tuition
• student works for a company that contributes to college tuition (Starbucks, Chipotle, Walgreens, UPS, etc...)
• attend a tuition-free/work-for-tuition college
• earn a college degree at home -- use Lumerit (formerly College Plus) or other consulting company, or go "DIY" by lining up the CLEPs and distance courses that combine to make a degree at a participating college
• consider a cheaper overseas college
• work for several years out of high school and save (consider a good-paying trade job, or earn an AAS health/medical degree, or goes into a vo-tech field); return to college when age 24 and no longer need parent financial info on the FAFSA (which helps student get more federal aid) and use savings to fund college

More ideas on alternatives for funding college in these past threads:

• "s/o Cautionary Tale: High College Costs -- a brainstorm $$ ideas thread!"
• "How are YOU managing to pay for college?"
• "College financing -- two things I learned and our story"
• "College as cheap as possible: need advice"
• "Unexpected ways to save a little money in college?"

[catz]

4 hours ago, JanetC said:

You guys are giving way too much credit to the amount of thought that goes into the EFC. They aren't making an effort to understand the economic and financial realities of families today.

The FAFSA formula is based on the typical family expenses as recorded by the 1960 census, patched up over the years using statistics the government was already collecting for other purposes, most notably the social security cost of living adjustment. 

When the FAFSA returns something generally affordable, it's almost by accident. 

I'm definitely not giving too much credit.  It's obvious that the numbers are just punched.  The fact that one school can say you can afford more than another makes that clear.  I'm musing about why it's not actually affordable at all even if you appear rich on paper.  

Even with an average family income of 192K at Yale, I suspect it is still a struggle for many families that have kids at elite schools that earn at that level.  Especially if they have expensive health care, live in a HCOL area, are approaching retirement, have multiple kids, may be paying for private high school (or homeschooling) because their public schools aren't good, etc.  

I think it is totally a marketing gimmick that private schools say their schools are need blind and meets need when they can filter kids by activities and schools and get to decide what your "need" is.  

[katilac]

On 4/28/2018 at 7:15 AM, HeighHo said:

 That looks at it from the point of view of not stressing the family, but it doesn't look at it from the point of view of not stressing the college and the professor's familes.  

1

 

Can you expand on what you mean by this? I don't get it. 

[Lanny]

At the school fair (Duke, Georgetown, Harvard and Penn had Admissions Reps there) we attended on May 3rd in Bogotá, I remember a slide they showed. I can't remember if that was for one or all of the 4 schools, but I assume it was typical of the 4 schools.  A family with income of $65K or less would contribute nothing.  Full Ride.  A family with income up to approximately $150K would be subsidized. The AVERAGE family contribution is $12K. 

ETA: My understanding is those 4 schools offer little, if anything, in the way of Merit Aid. They have huge Endowments and provide huge amounts of Need  based aid.

Edited May 7, 2018 by Lanny
ETA

[catz]

55 minutes ago, Lanny said:

At the school fair (Duke, Georgetown, Harvard and Penn had Admissions Reps there) we attended on May 3rd in Bogotá, I remember a slide they showed. I can't remember if that was for one or all of the 4 schools, but I assume it was typical of the 4 schools.  A family with income of $65K or less would contribute nothing.  Full Ride.  A family with income up to approximately $150K would be subsidized. The AVERAGE family contribution is $12K. 

ETA: My understanding is those 4 schools offer little, if anything, in the way of Merit Aid. They have huge Endowments and provide huge amounts of Need  based aid.

Well, I think that data is fairly misleading for these schools but it makes for good marketing and encourages people to apply.  For example, here is the income data for UPenn

 https://www.nytimes.com/interactive/projects/college-mobility/university-of-pennsylvania

Note that the average family income of a student at UPenn is $195,000.  19% of students are from the top 1% of earners and earn greater than $630,000.  71% are from the top 20% of income earners.  

It seems likely to me that those high financial aid spots are definitely lottery spots and though they call themselves need blind, they can see the schools and activities that students are into in admissions.  

Actually, I happened upon an interesting 4 minute video about a former student of Yale who went back and dug through her admissions files after graduating.   

https://www.youtube.com/watch?v=fQ1ajpiy09E

ETA - the gist of this video is that she was selected by admissions as a representative of a diverse urban public school system where the majority is in poverty and/or a minority.  She is the white daughter of affluent ivy league educated parents.   This video really struck home for me because I know kids personally like this selected from urban public schools.   I know a kid this year that got into an ivy - ivy educated parents, wealthy grandparents, full pay.  Attended urban public school.  

[catz]

Ha - just learned today about another Midwestern, Caucasian, urban public school kid (21% Caucasian, 70% free lunch) who will be attending an elite east coast school.  Also has highly educated parents and is full pay or very close.  This kid has good, but not amazing stats/extra curricular activities.  But definitely had an app that showed privilege.  Kid has never had a  job for example and participates in things that obviously cost money.

I think it is just good to go into the process eyes wide open.  My kid will probably apply to some competitive schools but I think financially it isn't likely to work for us despite how "generous" these schools are.  Meets need and need blind are marketing ploys to get lots of apps through the door.   They are filling "buckets" when they build their class.  They want diversity in terms of ethnicity, geographic area, interest areas, extracurriculars, public vs. private school, urban vs. rural.  And they want SOME socio-economic diversity, but not enough to throw their overall budget.  Which is understandable - these schools at the end of the day need to run.  I just wish schools were forced to make the whole process more transparent.  When 20% of a class is from a FOO earning over 630K a year, these really are schools of the rich.  But that is the economic group that can likely easily afford 60-70K a year.   I also think the ED is a bit of a scam as well, because those applying are committed to paying their EFC and forgo comparing price points and options.  They have no incentive to make it more affordable when they can populate their classes with significant numbers in the ED round.  

[catz]

Well I think the info is out there about how these schools actually operate as is required, but unless you know what you're looking for it can be easily perceived that schools are more generous than they actually are and some are very aggressive with their marketing.  University of Chicago for example has sent more e-mails and brochures and personal letters than I can count.  In Lanny's example above, saying that the average family contribution is 12K is really unclear in a slide at a presentation.  Maybe for a very small number under a certain income level.  We are full pay almost everywhere, but we are right on the edge.  Their goal is to see lots and lots of apps.  So their stats look more competitive.  So next year even more kids will want to apply.

I don't think it should be held against someone to be second gen at all.  My kids are second gen.  I DO  think it is interesting that representatives to gain admissions at elite schools out of urban public school systems often basically look almost exactly like their rich suburban/private school counterpart.  Our school district is 70% free lunch and a majority of those students would be first gen.   Some of those students are working their tails off in the IB program right along side these kids.  If the system were truly need blind, 70% of the time it would be a free lunch kid getting into an elite school.  I suspect many of these kids getting in would have much stiffer competition if they were coming out of one of the expensive privates or a rich suburban district.   Also, the free lunch kids doing IB are often working in a family business or need to help with siblings much more and aren't taking music lessons or doing theater or traveling sports.  They might just have 1 or 2 extracurriculars.  I know some of those kind of kids too and they are every bit as hard working if not more so.  My kid does DE at an urban public community college that is 70% minority.  Some of the first gen kids there are real fire crackers.   My kid who I think has a reasonable chance at competitive schools is down right lazy compared to some of them.

I have mixed feelings about private schools operating solely like a private business because they are considered non-profits and as such receive pretty generous tax breaks, etc.  I do think it's unfortunate right now that our higher education system is so reliant on private schools to keep the wheels turning.  I'd love for public colleges to be much more affordable and better programming in place for higher stat kids.  I'd love to see more reciprocity between states/programs.  I don't think our society values education enough in general.  After spending hours reading and researching, I personally care less about the prestige level of the school my kid goes to, it's clear it's not worth a heavy debt load for us, and I'm glad he's getting to experience at an urban community college.  I think there are high flying peer groups at many great colleges out there.  But in general, I'm not really wild about the ways things operate at the moment.  

ETA - and for the record my junior has never had a paying job and has a bunch of "rich" looking extra curriculars.  I'm not cutting down that demographic at all.  I like all these kids and I'm happy for them.  

[chiguirre]

On ‎5‎/‎7‎/‎2018 at 7:20 AM, FuzzyCatz said:

ETA - the gist of this video is that she was selected by admissions as a representative of a diverse urban public school system where the majority is in poverty and/or a minority.  She is the white daughter of affluent ivy league educated parents.   This video really struck home for me because I know kids personally like this selected from urban public schools.   I know a kid this year that got into an ivy - ivy educated parents, wealthy grandparents, full pay.  Attended urban public school.  

 

Penn also has a program to recruit students from small communities in Pennsylvania. The idea was to recruit kids from old mining or mill towns who grew up in poverty and isolation. Oddly enough, my former coal mining town turned suburb of Pittsburgh counted for this program. When I got to Penn I thought it was very weird that I was being invited to this small town group because I'm actually from the Pittsburgh burbs not "Pennsyltucky". This kind of gaming has been going on for years and years. And, of course, you guessed it, I had good stats and was full pay. It was the same game as picking the one full pay applicant from the pool of an urban school district.

[Hoggirl]

On 5/7/2018 at 1:50 PM, FuzzyCatz said:

  My kid will probably apply to some competitive schools but I think financially it isn't likely to work for us despite how "generous" these schools are.  

Then my unsolicited advice is not to allow him/her to apply.  

Many posts indicate there is clearly a lot of dissatisfaction with how the current system operates.  So, how should it work?  If you could design the aid system from the ground up, how would you do it?

[DawnM]

I have two in college next year.  We have now gotten the financial info from both schools.  My kids have some merit scholarships but no needs based scholarships or grants.  We thought we may get a some, but nope. 

[catz]

1 hour ago, Hoggirl said:

Then my unsolicited advice is not to allow him/her to apply.  

Many posts indicate there is clearly a lot of dissatisfaction with how the current system operates.  So, how should it work?  If you could design the aid system from the ground up, how would you do it?

Oh well, the places he is considering applying do have some lottery style merit and/or music scholarships and he does have high stats.  He definitely has a clear picture of the situation and will be applying at state schools and understands there is a good chance he will end up at one of those or possibly a mid range private that has good merit.  We're lucky to have 2 very good flagship options (we have reciprocity with a neighboring state), but a private may come in cheaper for him.  I haven't run EFC's for every school of interest yet, it is possible we may get some small amount at some certain schools.

I have a lot of random thoughts about how to change the system.  I'd like it if state schools were more uniformly and well funded and had options for lower and higher flyers.  I'd like to see more state exchange/recoprocity to share programs.  I'd prefer EFC to be one number for every school and it to be just a realistic percentage of current income (12-15%?  Less for lower income).   And if schools don't meet that, at least it's transparent.  The state flagships are still unaffordable for MANY people which is sad.  We have a great program in our city where low income kids out of certain schools can do 2 years free of CC.  But then the 4 year transfer schools are so unaffordable those kids get stuck.   Since our higher education system is pretty reliant on private schools, maybe we should incentivize private schools to be more affordable.   I know all of that requires consenus and financing, so I'm not holding my breath, but I do think it's pretty broken and nuts.

Anyway -  totally random thoughts!  ?  We  still have good options and I'm not particularly worried about it in our case.  I think the system is probably more equitable than it used to be actually but more convoluted and less transparent.