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[quote]
Some of the nation's most elite colleges, trying to ward off perceptions that they've become unaffordable to even high-income families, are bolstering their financial aid packages by offering grants to students whose parents earn as much as $180,000 a year.</p>
<p>Officials at these colleges, where costs can run $50,000 annually, say they are putting more money into aid because the price is deterring good students from applying. In the past three years, the schools have heavily promoted news that they will essentially give free rides for students from families making $50,000 to $60,000 or less, but they have been less vocal about what they can offer for families earning $100,000 or more.</p>
<p>"The misconception is you get financial aid only if you're poor," William R. Fitzsimmons, dean of admissions and financial aid at Harvard, told about 160 parents and their college-bound children last week at a recruitment event at a Worcester hotel also attended by admissions officers from Duke, Stanford, Georgetown, and Penn.
<p>I would take these things with a grain of salt, especially when you understand how these schools compute need.</p>
<p>For example, even with the old institutional formulas, it was entirely possible for a family with 180K income to receive aid: Oldest already in college; middle applying; youngest in an expensive prep school. Yes, prep school tuition is deductible from family contribution. But this family had better be from a low cost part of the country where there was not much home equity buildup, as the same formula is used everywhere (with small adjustment for differing state tax burdens.)</p>
<p>So, IMHO, this is just another smart marketing move aimed at increasing the number of applicants. I have no doubt they saw upper middle income applications dropping, leading to all sorts of negative consequences such as decreased apparent selectivity leading to dropping rankings, so they saw the need to crank up the PR machine.</p>
<p>Thank you Marite for posting this! I think the mantra on CC that I have observed for over five years is that the middle class can't get aid and so if a school looks unaffordable, don't apply. That thinking never gelled with my personal experience. We let our kids apply wherever they wanted. We are middle class. My kids do get financial aid and we are pleased with the package they receive. True, the packages got much better with two in college. But the point is, like the article says, elite schools or schools that try to meet 100% need, do give financial aid to the middle class. So, I would encourage families to apply and see what happens and not ASSUME a school is out of reach financially. Sometimes, a pricier school that meets 100% of need, may not cost more than the cheaper school. We are not paying full fare at our kids' pricey schools.</p>
<p>All I know is that while clearly not middle class (which is about $50,000/year income) but in no way able to swing $45,000/yr for 4 years, our EFC was $65,000/yr (!) for our first child. So it wouldn't have much mattered what kind of financial aid the elites were giving out, he wasn't applying.</p>
<p>That is not the definition of middle class that these schools are using if you read the article. They were discussing FA for those who make over $100,000. Also, being able to "afford" tuition doesn't mean having that money out of pocket to pay the EFC. We SURELY don't have the EFC either. However, some, like ourselves, are willing or able to take out Parent Plus Loans to pay it off over many years, and thus pay a reasonable amount of money per year out of income, after the FA grants.</p>
<p>"At Harvard, the average need-based grant for families in the $100,000-$140,000 income range last school year was $21,693, up from $17,910 in 2004-05.At Stanford, a family with an income of more than $100,000 with one child in college would get about $30,000 this academic year"</p>
<p>-- these are impressive & comforting statistics, which, if true, put both of these elite institutions within the price of many publics.</p>
<p>The forum mentioned was the Exploring College Options roadshow the cited colleges are giving throughout the country. If you get a chance to attend you can hear the statements directly. The link above doesn't include a graph in the paper globe article, showing the number of students in different income ranges. This graph was also shown at the event. Not just Harvard, but several of the colleges at this event and at a similar event put a lot of emphasis on the increase in "middle class aid" and mentioned huge recent gifts directed at financial aid.</p>
<p>I don't know about other parts of the country, but in the metro area a family of 3 earning $100K (w/ 2 wage earners) is just barely middle-class. Teachers on Long Island earn $70k. A NYC public sch guidance counselor earns $80K. A house in the three boros will cost you at least $300k - - but more likely over $500K (and why bother even discussing Manhattan housing). </p>
<p>Two public interest lawyers w/ 4 kids (one applying to college) rec'd no aid from Emory. Two public sch teacher w/ 2 kids (one applying to college) rec'd no aid from Williams. In each case, being homeowners was the kiss of death.</p>
<p>The new formula is certainly good news for some, but since NY and CA are the largest candidate pools for most of the elites, probab not as much relief for as many families as the article suggests.</p>
<p>Okay, does this mean I have to start filling out all the financial aid forms? I thought that was one up side to earning too much for financial aid, fewer forms. I've gone to the school websites and run their aid calculations and always come up with zilch.</p>
<p>A good friend of mine lives in a nice neighborhood in a large house with a large mortgage payment. Her husband works for a big company, and they are paying full freight for their D to attend BC. They have a 2nd friend who is a self-employed contractor. The 2nd friend lives in a virtually identical house to theirs with NO mortgage, and takes a winter vacation to Italy every year. Being self-employed he can write off most of his income, so the 2nd friend's daughter got $20k/year in aid from BC. So "middle class" is a very wide definition. Self-employed people can write everything off and get aid, but those of us on salary are out of luck.</p>
<p>Chedva, my husband has his own professional practice and my kids did all right with FA, just commenting.</p>
<p>However, we most certainly DO have a mortgage, unlike Momneedsadvice's friend.</p>
<p>Also, momneedsadvice...there are pros and cons to everything. When you mention write offs if you are self employed, there are also drawbacks like having to fully fund our own health insurance as there are no employee benefits.</p>
<p>My d didn't get any FA (only merit). The schools apparently valued his practice as having significant assets, which it really doesn't. And there is very little that he can write off.</p>
<ol>
<li><p>This is hype. The reason that higher income families are getting financial aid is that the costs of attending colleges have risen so dramatically. The EFC formulas have not changes. When my son applied to college in 2001, a family with an EFC of $35K would not have qualified for need-based grant aid at Harvard or anywhere else -- now that number falls far short of the total COA, so naturally the family will get a grant. </p></li>
<li><p>
This may be somewhat true at a FAFSA-only school, because the formula is based on reported income on tax returns; but it would not be true at CSS Profile schools, including the elite private colleges like Harvard. As part of the financial aid process these schools do ask to see tax returns and they will add back in expensed items from a schedule C, including travel & entertainment, business deductions for use of a home, vehicle expenses, depreciation, etc. </p></li>
<li><p>
At upper ranges, income is assessed for financial aid at 9 times the rate of assets -- $10,000 of increased income will result in about $4500 in increased EFC, whereas $10K of increased assets will only impact EFC by about $500. Obviously someone who has paid off a house has a lot more than $10K in assets -- even a fairly modest house is probably worth at least $250K & therefore is going to impact the EFC by almost $13K -- but someone sitting on $250K of assets is a whole lot better off than someone without the home equity. Since financial aid formulas are developed with the assumption that families have a monthly cost for housing, it is hardly unfair for the financial aid system to take into account a paid-off home -- the family not only has a large asset, but they also have more discretionary income because they don't have to a monthly bill for rent or a mortgage.</p></li>
</ol>
<p>I hope you're right, calmom, but my d's schools did require the business supplement to the Profile. It'd be nice if d actually gets some need-based aid next year!</p>
<p>My husband is the one who deals with the financial aid forms and I have been the one who helped with the admissions stuff or anything else. I did not know there was a change this year but until now, he has had to fill in that supplement as he owns a private practice. And at least one of my kids' schools uses the CSS Profile as well. </p>
<p>I agree with you that someone who has a fully paid for home and no mortgage has more assets and also not nearly the monthly payments to be made. </p>
<p>I don't agree that it is hype though. Yes, colleges cost more and so now a family in a certain income level will get a grant. But in the end, that helps because if the cost of college has gone up, their cost is not going up. Thus they are getting help.</p>