<p>Joneses probably will have to pay for the wonderful LAC just like the Smiths. </p>
<p>The difference is that the Joneses will pay for it through loans, get deeper into debt and risk loosing the McMansion & fancy pants cars, while the Smiths will be debt free when their child graduates and will live happily ever after in their paid-off home.</p>
<p>Agreed. If they have the income to pay for that mortgage and all those cars, they have too much to get aid. FA offices don't care what you owe on your cars, credit cards, etc. Little Jones may just have to change her college plans.</p>
<p>katliamom and garland, thank you for your responses. As you might have imagined, we resemble the Smiths more than the Joneses, and do not qualify for aid. We've been saving since day 1. I was beginning to feel a little resentment, until receiving your responses.</p>
<p>And now back to our regularly scheduled programming. Sorry for hijacking the thread.</p>
<p>heyalb, good for you for being a Smith. Until very recently it was quite unfashionable :)</p>
<p>I have a feeling that it is not always as clear as we would like to see it , heyalb.
After all it was on CC that I have read that it is better to give a kid $20,000 car upon his HS graduation than put the same amount of money into his bank account :)</p>
<p>I still believe that it is those of us that saved for ur kids education are being somehow penalized by the current system. The Smith and Jones examples you gave is a little over the top. What about the Smiths living in a million dollar home that is totally paid for as a result of not taking expensive vacations over the last 20 years. And let's say the Joneses still own half a million on theirs since they have been spenders. Both families drive similar cars, the kids are equally smart and have been accepted to the same college. Which family will have larger EFC?</p>
<p>There are SOME Jones' who will make out more than the Smiths. However, most of the Jones' will not do as well as most of the Smiths. </p>
<p>Since most financial aid formulas are heavily based on income, that is the leading indicator of what aid will be. We know a lot of folks who have gotten financial aid because they make a low income that is subsidized by family. You never really know how a family operates financially, other than your own. </p>
<p>Another thing to note is that you don't know what sort of a student and what kind of school your child is going to be. I have a wonderful son who is not a great test taker and though a good student, is not a super one. He is very unlikely to get merit money. The schools that are most generous with financial aid are going to be reaches for him. He would likely fall into the category of a big maybe at schools that are not need blind. For him, we are likely to have to pay full freight for college.</p>
<p>^ Agreed. Financial aid is mostly based on income. If the income of both hypothetical families is the same, the one with no savings will NOT get more financial aid. It is always better to have saved.</p>
<p>another issue is -- what kind of financial aid? there is a difference between a grant and a loan.</p>
<p>I know that in most cases, neither Smith nor Jones gets any financial aid unless their incomes are very small.</p>
<p>
[quote]
If the income of both hypothetical families is the same, the one with no savings will NOT get more financial aid.
[/quote]
</p>
<p>Not necesarily true; they indeed could get some (more) finaid. While "net income" is ~48% of efc, parental assets are 5.6% after the (small) protection allowance. Thus, a family with $200k of assets in parent's name will, by definition, have an efc that is $11,200 higher than the same family with zero assets, all other things being equal (ignoring asset protection allowance for ease of computation).</p>
<p>
[quote]
It is always better to have saved.
[/quote]
</p>
<p>Definitely true.</p>
<p>
[quote]
I know that in most cases, neither Smith nor Jones gets any financial aid unless their incomes are very small.
[/quote]
</p>
<p>Harvard (and Yale?) give aid to families with incomes up to $180k.....which is the antithesis of "very small." :)</p>
<p>Okay, to clarify my resentment....um.....to clarify the dichotomy between these two families:</p>
<p>Income is the same between the two hypothetical families. Basically what I'm resenting.....um.....looking at, is one family who chose to save their income for their child's education, and another family who chose to squander their income on the parents high-living lifestyle. Did the parents who squandered get rewarded with free money for their children's education?</p>
<p>I've been thinking, since joining CC, that I was stupid to save for my kids' schooling....I should have bought the cars, the McMansions, the vacations. Then my kids would get a free ride. Or whatever it's called.</p>
<p>Keep in mind: I'm not talking loans here. Loans are not a free ride; you have to pay them back. I'm talking grants.....free money....black gold.....Texas tea.</p>
<p>We don't qualify for grants.....we don't qualify for free money. *Because we saved ahead of time. *Hence the resentment. Unless you tell me I'm off base. And apparently I'm off base, thank you. Now I don't feel so bad driving my 10-year old Honda.</p>
<p>Oh man, these kids had better take care of me and my high-living lifestyle when I'm 80.</p>
<p>Here's the long story on how financial aid is awarded, for those of you who are interested: </p>
<p>Here are some proposals for reform: </p>
<p>
[quote]
Does anyone's child receive scholarship money from an Ivy League school unrelated to financial need?
[/quote]
</p>
<p>Every school, Ivy or not, has monetary prizes that are awarded without consideration of financial need, and those prizes often include money or the near equivalent (travelling fellowships, postgraduate scholarships, admission to programs that include paid work opportunities).</p>
<p>If you mean awards that depend only on what an applicant did prior to enrollment, then most or all Ivy League schools:</p>
<p>(a) have honorary designations with names like National Scholar, Trustee Scholar, or University Scholar offered to the academically strongest few percent of incoming students. Those designations can have implications for financial aid ranging from reduced term-time "expected student work contribution" to eligibility for very plum jobs or other opportunities that would otherwise be unavailable. </p>
<p>(b) treat outside scholarship awards in ways that can lead to some sharing of the money with the student rather than taking 100 percent to the university, even when the award is smaller than the discount the university claims to give as part of its financial aid package. This can function the same economically as the university giving the student a monetary bonus for earning the scholarship. </p>
<p>The more interesting question about situation (b) is whether the student with an outside scholarship is better or worse off in financial aid compared to receiving the same amount of money as ordinary income (from off-campus work or a lottery ticket) and declaring it to the financial aid office.</p>
<p>For those who are not entitled to free money via financial aid because they saved, a few thoughts from me. First of all congratulations! Great job, and deserve a lot of respect. It was not easy to do, I know, and you have my utmost respect. As one whose kids are NOT entitled to financial aid, but not because we saved, and we did not save enough anyways, you do have my envy and adulation. </p>
<p>Your kids can still get free money. Merit money and outside scholarships are available. What you did get for savings is something that few people have, and even fewer as the economy plummets. Your child has the flexibility to make choices without being harnessed to what schools offer in financial aid. It is a very, very rare student who gets 100% of need met through grants or scholarships. Whatever the parent can provide offers so many more choices, covers so many more contingencies. Even fewer kids have families who can meet the costs as the system say they should. So you are in a rare group.<br>
There is a very simple solution for any family who feels he is worse off for having saved for college. Get rid of the money. It can always be spent or donated. Then you would be in the same boat as the person with your same income who did not save. The problem, of course, is that you don't know until the process is near over, whether your money is what stands in the way of getting free aid from colleges. THat is the risk thing that your saving mitigated. But anyways, for those who have the money in income or assets, you can divest yourself of those dollars. For those who don't have it, there are few and rare ways to get it.</p>
<p>My D (valedictorian) did not apply to any elite schools because of common knowledge, that they do not offer Merit $$ (she received post card inviting her to apply to Harvard and Prinston, which she just ignored).</p>
<p><a href="a">quote</a> have honorary designations with names like National Scholar, Trustee Scholar, or University Scholar offered to the academically strongest few percent of incoming students. Those designations can have implications for financial aid ranging from reduced term-time "expected student work contribution" to eligibility for very plum jobs or other opportunities that would otherwise be unavailable.
[/quote]
This is interesting ... and runs counter to what I understand of the IVYies policy on non-need-based scholarships ... any pointers to info on the actual scholarships at a school would be appreciated.</p>
<p>In my day I know at Cornell there were private scholarships that the school administered ... for example, in the Engineering school a student would receive word they received a McMullen (I think) scholarship and their tuition bill was reduced by the scholarship amount ... the scholarship was actually given by a private ogranization set-up to provide scholarships to Cornell students ... technically Cornell was not giving the scholarships although the net effect was selected Cornell students paid less due to academic performance. </p>
<p>I wonder if the scholarships referenced above are similar or if the funding comes from the school itself.</p>
<p>Sometimes the funding comes fromes from the school, sometimes it comes from outside groups. It's really difficult to come up with a list of such grants available even when you are attending that school. It is not money anyone can count on getting, and they are not large amounts of money from what I have seen. In fact, my oldest son got a $100 grant for filling out some contributing student scholarship form. Occaisionally, I have heard of kids getting grants or other monies as they continue through school from contributions or awards that come down the school pipeline. I heard that someone in the performing arts dept at my son's college got a nice grant that way.</p>
<p>heyalb, just be satisfied with your ability to pay for your child attending a great school. Why do you care what others do? I am sure there are a lot more "unfairness" in this world, tax and retirements just comes to mind. </p>
<p>I was thinking the same way as you do about a year ago. However, Jones could get more aid only jones' D could get into a need blind top notch school. For anyone who knew for 100% sure their kids could get into HPYSM, it is probably not necessary to save if their income is below certain number. On the other hand, how many people could say their D or S will get into one of them for sure?</p>
<p>So, at the end, while some lucky spenders get their cake and eat it too, majority of the savers will enjoy the freedom to send their children to their dreams schools. I truely wish we had the income and the luck to save enough to fully fund our kids to any school they want to. </p>
<p>What about those low income families who endure a life time of low standard of living and get the benefit of the full grant money? I have seen one person on CC accuses parents delibrately not making more money in order to get FA. </p>
<p>As an old Chinese saying, - something to the line of "when people start to compare them with others, they will be upset to death".</p>
<p>siserune:</p>
<p>please link a source to your part a at Dartmouth, for example.</p>
<p>
[quote]
What you did get for savings is something that few people have, and even fewer as the economy plummets. Your child has the flexibility to make choices without being harnessed to what schools offer in financial aid.
[/quote]
</p>
<p>This couldn't be any truer. D goes to her first choice school. we have no money for ourselves, driving old cars and H and I make a decent living. Our EFC is very high, BUT we were able to put away money so that federal loans and savings is what is paying for her education. We are paying more than our EFC, because her school does not meet 100% of need.
Had we not saved, she would be at her local state college.
BTW, her first choice school gave her less of a scholarship/grant than any of her other choices. So yes she did have a choice.</p>