529/Prepaid tuition plans and Ivy League finaid

Paying for College
1

<p>Hello, all --</p>

<p>I'm a newbie, so please redirect me if this is an inappropriate spot for this topic.</p>

<p>With the Ivy League schools now pledging to pay for a student's costs if he is admitted, how does a 529 plan figure into the EFC?</p>

<p>For instance, when I run the Net Price calculator on Columbia's website, our EFC is about $10,000. The calculator specifically says to ignore any 529 monies.</p>

<p>We have a prepaid college tuition plan in VA (about $20K total) and about $25K in 529 money. Can we use that for our EFC? Or does that go into Columbia's coffers and reduce their contribution?</p>

<p>Thanks for any guidance!</p>

2

<p>

Wow, that’s a new one on me. Where did you hear that one?</p>

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<p>Sounds like you will have to pay about $10,000. The Ivies et al. still require families to pay what it is decided for them that they can afford. The school then picks up any remaining. BTW this is why many wealthy families are not choosing Ivies.</p>

4

<p>Kdog, </p>

<p>Sorry, sloppy writing on my part. The Ivies now are pledging to pay up to 100% of a student’s costs if need-based. </p>

<p>From Columbia’s website:</p>

<p>Financial aid awards at Columbia are based on meeting 100% of your demonstrated financial need (except for Transfer and Combined Plan students.) Columbia is committed to meeting 100% of your demonstrated financial need for all four years of undergraduate study.</p>

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<p>mamabear2, just because a school meets 100% of need doesn’t mean you have no contribution. At my son’s school all students have an expected contribution and depending on parent income (each school has their own minimum for contribution) there is a parent EFC as well. The way it works is you start with COA (Cost of attendance) and the school subtracts the parent EFC (what it expects you to pay). What is left is met with scholarships/grants and student contribution. They only guarantee that loans are not a part of the need met, not that you or the student is not expected to pay anything.</p>

<p>From Columbia’s website:</p>

<p>Determining Your Financial Need</p>

<p>We evaluate your family’s ability to pay based on the information you provide us. We use this information to calculate your family contribution. Please refer to the How to Apply pages to learn more about the information we ask for.</p>

<p>Once we determine your family contribution, we are able to determine your eligibility for financial aid by using a simple methodology. Every year, we establish a standard cost of education, which includes tuition, mandatory fees, and estimated room and board. The formula for determining how much financial aid you are eligible for is:</p>

<p>Cost of Attendance - Family Contribution = Financial Aid Eligibility</p>

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<p>Hello, Kdog – </p>

<p>I’m aware of the EFC. My question is how does 529 money get used in the equation.</p>

<p>Let’s say my EFC at Columbia is $17K.
We have a prepaid VA tuition plan worth about $18K.
We also have a VA 529 account with about $20K. </p>

<p>Can I use the 529 money to lessen my EFC load? Or does that money go into Columbia’s coffers, and I still have to pay the EFC of $17K?</p>

<p>Someone get me straight on this, because it sure seems as though I was a chump all these years saving my money in 529 accounts. I have a daughter who’s a high performer and has a shot at an Ivy League. If the 529 money is used to lessen Columbia’s contribution – and why wouldn’t it? – then I still have the $17K to pay.</p>

<p>Had I <em>not</em> forgone vacations and 15-year-old cars, contributing to the 529 accounts for 12 years, my EFC would still be the same. </p>

<p>Someone slap some semse into me. Paying 20% of my net income to a college, with another kid also in a state university, me at age 57 with no pension and a federally-mandated retirement in 8 years, leaves me kind of cold.</p>

<p>OTOH, there’s nothing that says she <em>has</em> to attend an Ivy, especially with a 100% prepaid VA tuition. Hell, I’d love to drive a Lincoln navigator, but I can only afford a Toyota minivan, LOL.</p>

<p>When I read my own post, I sound pretty whiney – I realize that. LOL </p>

<p>Anyway, no flames, please, thanks for letting me vent. This is all new to me, and I appreciate those of you who’ve been down this path before me.</p>

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<p>

</p>

<p>The key here is “shot”. The vast majority of students, even very strong students, who apply to the Ivy league will not be accepted.</p>

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<p>Nobody can answer that question except someone who attends there or the university themselves. For FAFSA, the money is treated as an asset and will affect your EFC. How the university interprets that varies by institution. In theory, if it is included to determine your EFC it should not be used to lower the school’s need they meet.</p>

<p>P.S. As stated by the previous poster, the hard part is getting in. Last year, Columbia had the second lowest overall acceptance rate (6.93%) behind Harvard and the lowest RD acceptance rate (5.64%).</p>

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<p>Kdog,</p>

<p>Thanks for your input!</p>

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<p>mamabear,
Yes, your college savings are counted as assets for FAFSA and more importantly the Profile for privates like Columbia. However, they are not going to dollar for dollar increase your EFC; and income is a bigger factor in determining financial need than assets. I’m not familiar with Columbia, but many of the more generous colleges only count assets over a certain amount that are considered ‘typical’, for instance, see S:</p>

<p>[FAQ</a> : Stanford University](<a href=“Financial Aid : Stanford University”>Financial Aid : Stanford University)</p>

<p>I did the same thing you did, save because as a upper middle income family, I wasn’t sure how much FA we would qualify for. In the end, even though it did raise my EFC somewhat, I’m happy to have those funds available to pay the EFC, because just based on salary, we would definitely be paying at most colleges.</p>

<p>The college savings money is yours, you can use it towards your EFC.</p>

<p>Just want to add that 529 (and the prepaid tuition??) are parental assets rather than student assets, so it is advantaged for FA calculations.</p>

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<p>Yes - my understanding is that it is up to the 529 account owner (me) to decide how and when to allocate the account funds. For example, I might allocate it toward EFC across all four years or decide to use more in the first few years to reduce the debt load. I don’t believe you have been a chump at all! :wink: (But do let us know if you learn otherwise!!!)</p>