<p>Sorry calmom, I posted from about page 2-3, then I found your post AFTER posting my question....with my 4o-something short term memory loss I was afraid to wait to post until I got to the end, I would have forgotten the question by then ;) If you were not so darned efficient, I could have edited it away!</p>
<p>"In America we believe in merit."</p>
<p>A very needy student who has managed despite circumstances to achieve academically on the same level as students of great privilege, is the very definition of merit.</p>
<p>Seems pretty rational and straightforward to me.</p>
<p>But then, maybe I'm just a fool and a whacko.</p>
<p>Amherst takes in about 420 students a year. What Marx wants to do will not make a dent in the class divide. What we really need is to make our large flagship universities better places for learning to narrow the widening gap between flagship state u and elite colleges.</p>
<p>I am not sure that there is that much of an educational gap between the flagship publics and the elite colleges, in terms of overall quality -- though I realize that funding limitations are causing the publics to deteriorate in some of the amenities that go along with providing the education. My daughter took a class at Columbia her first semester that was very challenging, and was taught by a Berkeley professor who "commutes" to New York -- apparently he regularly teaches at Columbia in the fall , Berkeley in the spring. I doubt that the quality of teaching varies depending on which coast the man happens to be on. The Columbia class was a fairly large lecture - perhaps 150 students -- with a TA who held regular office hours for recitation, which my daughter quickly discovered were essential for keeping up in the course. So what is the qualitative difference between the schools? She had the option last year to choose between Berkeley, Chicago, and Barnard.... and while there are major differences in campus ambiance and environment, I don't think there's much difference in terms of any measurable or objective educational standard. Certainly not $27,000 worth of difference annually. </p>
<p>I think some of the class difference comes from a subjective <em>perception</em> that the elite school is better, precisely because of the class difference. That is, my guess is that if the Amherst demographics changed to more closely reflect those of its partner institution, U.Mass, then the upper crust families would start wailing about how much Amherst had "deteriorated" in quality, and start to opt for other elites. </p>
<p>A good deal of the justification people offer for choosing an elite over public is the notion of "networking" for future jobs, and I don't think the parents mean that they want their kids to "network" with kids from blue collar families. </p>
<p>The reality, I think, is that especially for the elite LACs (Amherst, Swarthmore, Williams), a good part of the allure for the lower class families is the fact that those are the schools where the sons and daughters of the wealthy go. I mean, I think you would simply see a collegiate, class-based version of "white flight" in the end. </p>
<p>I certainly commend Marx for his efforts -- but I think that it will take more than a demographic realignment to address the class-based differences. </p>
<p>I'm 100% in favor of efforts to improve public education -- and I would like to see it improved at all levels, not just the flagships. But I would want to see that for the sake of the education itself -- so that we have a better educated populace. I just don't think that doing so will eradicate the class differences. No matter how good the flagships become, the wall street bankers will still favor the elite privates in their hiring -- it's got nothing to do with educational quality and everything to do with exclusivity. I think that really is going to take a shakeup of a different sort to make a difference in the class-based polarization that the NPR series explored.</p>
<p>Higherlead.... my state u espouses sports over academics and basketball over all else. I guess I should assume, therefore, that we will expect our educated workforce to come from out of state, since our own middle class values are clearly inadequate to the task of preparing our young people to compete in a global economy.... unless they happen to be very tall and very coordinated.</p>
<p>Calmon, Your example underscores the gap. How much time do you think the Berkeley prof spends his/her time at Berkeley? Furthermore, it is not entirely valid to think Berkeley is your average flagship state u. There are always prof's at state u that can be anywhere else. Look at U Mass, they just got themselves a Nobel this year. He wasn't even a surprise as we all expected it. What I was referring to was the overall learning and teaching environment. Flagship state u's have a long way to go. I teach at one and would rather send my kid to Amherst despite the difference of paying nothing at a state U versus paying full cost at Amherst.</p>
<p>"What I was referring to was the overall learning and teaching environment."</p>
<p>True. And the point is, when it comes to college selection, the 2 are interrelated. I don't agree with calmom's point that "a good part of the allure for lower-class families" is rubbing elbows with The Wealthy, but rather rubbing elbows with those quite well-educated. Unfortunately, in our society wealth & educational excellence are too often interdependent, but that doesn't mean that the wealth aspect is necessarily the draw.</p>
<p>One gets tired of being a star in a classroom. It gets old having no one or few students on your level, and not having that peer level affects one's own intellectual progress. The teaching is more efficient in a class of well-prepared students. The permutations/combinations of learning product are also magnified.</p>
<p>There should be an "Elite" (high standard, drawing from the best) Public U in every state in this nation. The branches of that U should be better than glorified community colleges, and at least serve the middle-level learner not entering college on a remedial level.</p>
<p>Here’s my issue being a 40K-92K parent, but it could apply to those outside that range as well. The oldest of 3 children is a HS junior. If all go to college for 4 years I will be filling out FAFSA’s for the next 9 years, three of which will be for two kids attending in the same year. My assets could easily put one child through college but not 3, or even 2. If I stretch to send the first child to Amherst or a similar school, will I be shorting the other two? My ability to pay for the 2nd and 3rd child is largely dependent upon how quickly my assets are depleted. I don’t see where FAFSA takes that into account. Under FAFSA, the number of people in the family makes a difference in how much INCOME is available in coming up with EFC, but the number does not have any impact on the ASSETS deemed available. In other words, FAFSA makes an allowance for how much my other kids will cost me to provide food, shelter, and clothing for, but makes no allowance for the fact that they may go to college in the future. I understand that FAFSA cannot assume that my other kids will go to college, but that is what the younger kids and I expect. FAFSA does take into account the impact of two in college at the same time, and I’m at least thankful for that.</p>
<p>So does my oldest even bother applying to Amherst or its financial equal? I really don’t want to limit his choice of schools due to money concerns. Neither do I want my other children to be limited because there’s no more cash in the cookie jar when it’s their turn. Or should my oldest apply at a less selective school where he can get a merit scholarship? These are the issues I’m pondering. I’m not complaining about the college admission & financial aid system, but it does present difficult choices and tests the commitment of parents and students to secure a good education.</p>
<p>Dear standrews,</p>
<p>Some of the Elites take into account the family debt level & current financial commitments. My experience is that the privates do this better than the publics. Also (and although you didn't address this specifically, but it's apropos to others who've asked), not every form or every college fails to understand the reality of needing shelter as a basic. Some colleges may expect someone sitting on gobs of equity & with no housing debts or nonhousing debts to borrow against an asset, but many of the Elites do not expect modest equity to be savaged for the sake of tuition. It's pretty irresponsible to leave a family homeless or virtually so, & would also jeopardize the retention of that student, possibly.</p>
<p>If one has a certain debt ratio (to assets), and a certain financial commitment level, the more "enlightened" U's understand this, in my experience. I do not know how Amherst in particular calculates some of the necessities and contingencies you mention. But if a student is interested in a college, it's worth the investigation to determine that, I would think. (Such as with any "financial aid calculator" possibly available on the college's web page.</p>
<p>standrews.... I don't know how many times I am going to have to keep repeating this before people get it. The FAFSA EFC only takes into a account a tiny fraction parental assets. The exact formula is 5.6% of assets, AFTER an exclusion which varies somewhat depending on age of older parent and whether it is a single or 2-parent household. This percentage is about the same or less than the amount of return that most people can get on assets that are well invested. </p>
<p>So the vast bulk of your EFC number is drawn from your income and from assets in the child's name.</p>
<p>Yes it is hard for you to plan for 3 kids, but the problem isn't that you need to preserve more than 94.4% of your assets for the sake of sending #3 off to college. The problem is that that the percentage of income the EFC expects is probably higher than you can meet out of current income, so you are likely to draw off more than 5.6% of your assets to meet the current obligation. And that problem would not be solved by weighting assets differently -- on the contrary, it probably would make more sense to reduce the percentage of income and balance that by increasing the level of assets looked at. The current system strongly favors high asset families, but at the same time is set up to discourage students and families from taking measures to increase their earnings. </p>
<p>In other words, if I had the opportunity to sell a family heirloom for $50,000 -- I'd know that the extra $50K in my bank account would only increases my EFC by $2800 -- that's $11,200 over 4 years, but obviously a system that allows me to keep $39K is not going to discourage me from accepting the cash. On the other hand, if I have am earning $50K annually and am offered a new job that will pay $70K, my EFC will probably go up by $9200 a year if I take that job. If that job also means more hours of work for me, or a longer commute, or a few thousand annually of increased expenses related to the job.... well there is not much incentive to take the job.</p>
<p>What I don't quite understand is the attitude here that financial aid should be a given, and we should take every opportunity to exploit it to the maximum. What happens to self-reliance? Certainly I don't want handout regarding food and shelter for my kid. Why should I think college should be different?</p>
<p>"The current system strongly favors high asset families, but at the same time is set up to discourage students and families from taking measures to increase their earnings."</p>
<p>Quite true. I've done the math. My wife currently has no income. If she were to take a part-time job (20hrs/week) earning $15,000/year, taxes/fica would claim almost 40% and EFC would claim another $4000 leaving only $5000 to go toward paying for college. That's a lot of effort for little gain. If my son manages to get enough scholarship money that the cost of college is less than EFC, then it would make sense for my wife to work this year and next year, before student #2 enters college. However, I can't know that now. By the time I can know for sure if that's the case, a year of earnings have gone by. My wife's time would be more productive helping the kids find scholarship money from outside sources. 100 hours spent gaining a $1000 renewable scholarship would be worth $40/hr, if the school reduced the amount of loan money rather than grant money. That's a pretty good return. Repeat that a couple more times and the savings become quite meaningful.</p>
<p>I understand that EFC only expects 5.6% of assets to be used. That's not unrealistic. What's unrealistic is the % of income that's expected. For instance, FAFSA does not exclude money contributed toward 401K in determining EFC. I guess I'd could stop making contributions to my 401K, but I'd be foregoing a sizable matching contribution by my employer. I'd be nuts to give up 'free' retirement money. The alternative is to draw upon assets.</p>
<p>It has taken me quite a while to learn the rules of the game. The fundamental unfairness of the system is not knowing the rules. I wish I'd have learned them sooner. If I had, I would have converted some gains on paper to hard assets before FAFSA would look at those gains as income. Still, my understanding of the rules are incomplete. They vary from school to school. Need determination varies by FAFSA, Profile, and supplemental forms. Aid packages vary in terms of % need met and the breakdown of grant, loan, work/study. And then there's the unpredictability of increasing cost of attendance. The 'bargain' school one enrolls at may have a hefty hike in tuition just around the corner.</p>
<p>I'm like most people in that I like a degree of certainty in my life. That's why I buy insurance. I want to make certain that a financial catastrophe doesn't result from something going terrible wrong for my family, like my death. Financing a college education, or two or three, is fraught with uncertainty. While knowing the rules mitigates uncertainty and eliminates rude surprises, there's still a lot of uncertainty. CC has contributed greatly to my ability get a grip on sending kids off to college, and I thank the many posters with valuable experience and insight.</p>
<p>" I don't agree with calmom's point that "a good part of the allure for lower-class families" is rubbing elbows with The Wealthy, but rather rubbing elbows with those quite well-educated."</p>
<p>I'm not sure I understood the allure at all back in the dark ages when I was in high school (I wasn't particularly self-aware), and am sure my parents didn't (they were simply confused.) I am also clear that the students at my high school were, generally speaking, smarter than those I met at my alma mater (LAC #1), and most of them attended New York City Colleges.</p>
<p>However, looking back at it, by far the most important thing I got out of my undergraduate education was rubbing elbows with the wealthy (some of whom were indeed, to put it charitably, less than stellar when it came to the intracranial characteristics.) It was uncomfortable, sometimes very much so, but I learned other ways of being in the world, of seeing the world, and of acting in the world that I could only have learned from being around members of "high asset" families. And it changed me, and I am forever grateful for the opportunity.</p>
<p>"I don't suppose it has occured to anyone that the reason the middle classes aren't flocking to Amherst but heading off to State U might have something to do with the fact that Amherst doesn't seem to be in sync with their middle class values."</p>
<p>The reason they aren't flocking there is simply that, statistically, (with the usual number of wonderful exceptions), they simply aren't getting in. You have to remember, this group includes the vast plurality of vals and sals in the country.</p>
<p>RE: Home equity</p>
<p>If a Profile school asks your home equity value and does not limit it to a % of income, you could have the following scenario:</p>
<p>Buy a home for $150k in the early 1980s in a high appreciation coastal area...stay in the home or move to another home at the same price, never take $ out of your equity, only pay down your mortgage amount. That same home would now be worth $600k-$800k and more and your mortgage would be paid off. So, your budget does not allow you to refi, but even if only 6% of assets is expected to be contributed, meaning you now have an EFC of $36k-$48k based on your home equity, yet your home is no better than when it was $150-$200k and your income does not support the HELOC payment. In that case, choose 568 schools or FAFSA schools!</p>
<p>Standrews, yes it is about the rules and the schools and choosing the right schools for your financial situatation. The unfairness is that it may be too late for you to know what's going on to do the best job for your first child.</p>
<p>"What I don't quite understand is the attitude here that financial aid should be a given..."</p>
<p>I don't think that's just the attitude found here. Don't the colleges themselves consider FA a given as well? If a school provides $10,000 on average to the students enrolled, why don't they just lower the cost of tuition by $10,000 and do away with financial aid? Wouldn't that be more efficient than the whole FA process, perhaps they could even reduce tuition by $11,000 as a result ridding themselves of the FA overhead. But instead, the financial aid system allows schools to offer an education to students across a greater range of incomes. As such, they expect students to take advantage of the financial aid they offer. Likewise, the federal government expects people to take advantage of the tax breaks they provide toward college. That's why I don't consider college FA a handout.</p>
<p>I agree with #115. While I occasionally run across those with a "handout" attitude, they're the exception in my own experience. I don't know about others' experiences. Most f.a. applicants I know are either grateful for whatever aid they have rec'd, or they reject the aid amount and seek an even cheaper solution. And remember that even those getting a "full ride" at the best endowed colleges, are generally required to work a minimum amt. on campus. Pell Grantees take work/study jobs. Gapped middle-income students at publics & privates are similarly expected to work at other kinds of employment that are not W/S, or certainly offered that opportunity to reduce any ultimate debt burden. Often there's a quid-pro-quo as part of the "package" offered: We'll grant you this, while you work for that.</p>
<p>I also think that it's in a somewhat different category than asking for food & shelter, as we do recognize higher education as an investment in the mind for the future productivity of society and for the overall favorable adjustment of the individual to an economy in which work is expected.</p>
<p>somemom, your post describes my situation pretty accurately--House rich, income poor, remortgaging the house messes up retirement.</p>
<p>Unfortunately, the 528 group is a lot of high-flying colleges for which my son would barely, if at all, qualify. </p>
<p>People in my financial situation seem to have choices (plenty, mind you) of:</p>
<p>A. Public colleges using the FAFSA
B. Mid-tier LAC's that give significant merit aid.
C. the 528 group which caps home equity as a percent of income</p>
<p>what we are left out of, it seems, is the 40-45K LAC's that are more selective. i.e. (in my area) Bucknell, Lafayette, Gettysburg, F&M, and others of that type which appear to use the Profile as written.</p>
<p>standrews - if it is any consolation -- you will come out ahead if your wife works and if you keep putting money into your 401K (even without considering employer matching) -- it's just that the margin can be quite low. </p>
<p>Your 401K contribution raises your EFC in the year that you contribute (because it is counted as untaxed income rather than taxed income), but your tax savings are greater -- so you simply end up paying a little more to the college and a lot less to IRS. So for a high-asset family the IRA/401K contributions help, because it also shifts assets from savings (where they are counted for purposes of EFC), to a sheltered account (where the assets themselves will not be counted). This is especially true where parents are nearing the age when they can begin withdrawing the 401K funds without penalty. </p>
<p>This doesn't work for the low asset family simply because they don't have the money to put into the 401K. </p>
<p>Similarly, as you found out with the math -- you do come out ahead when your wife is earning more money... it's just that you don't come out ahead by much. So if a parent wants to take a job or a promotion for reasons extraneous to paying for college: for the opportunity the job affords, long-term career benefits, etc. -- then there is no reason not to. I am self employed and I raised my contract rates this past year -- I know that if I make more money my EFC will increase next year - but since I'm simply charging more for the exact same worth, the marginal increase is worthwhile to me. I don't get rich, but it makes paying the bills a little easier. But the current aid system certainly gives me no incentive to put in extra effort to make more money, such as through working longer hours.</p>
<p>The biggest disincentive is to young adults under age 23 who would like to work and make a significant contribution on their own to educational costs. The worst thing a young person can do in terms of financial aid is to take a year off of school (such as a gap year) to work at a full time job. They end up with their income and whatever they can save from income counted twice - so a kid who earns $20K while living on his own and manages to save $12K will see EFC go up by more than the amount he has managed to save -- for example, the EFC might increase to by $13K. It is a losing proposition. </p>
<p>I personally believe that the current structure of the financial aid system and definition of "dependency" is specifically designed to delay the entry of young people into the work force -- while at the same time providing fodder for our armed forces, as military service is the single avenue (other than marriage) by which a young person can become classified as independent and avoid the negative impact of work on the overall ability to finance college.</p>
<p>Jaybee, it's interesting that the list you give ( bucknell, F and M etc) is where a lot of the fairly academically strong, middle class kids in my town go--they seem to do well with merit at them, or else they must be getting pretty good aid.</p>
<p>One difference is that no one here has that kind of home equity; I can see it would make a difference, but OTOH, it's a nice thing to have, I would guess (dunno, as I will be lucky to get 250K for mine :( )</p>
<p>Warning: Naive student opinion ahead. :)</p>
<p>I guess I sort of see FA as an investment on the college's part. If I am able to attend a private college thanks to a generous financial aid package, and then go on to make a comfortable living, I can (and fully plan to) donate money to my college to express my gratitude, which then contributes to its ability to subsidize another generation of needy college students (and so on)... Maybe I'm just rationalizing to protect my pride or vanity, but I like to think that when I'm old enough to manage my own money, and when all other needs are met--including my own kids' education (assuming that I find a man who's fool enough to marry me ;))--I'll pay back as much as I can afford. Judging by the number of wealthy, famous graduates of these "elite" colleges, many of whom must have benefited from financial aid at some point, who go on to donate ridiculous amounts of money, I can't help but think that the "investment" pays off. So it's really not really a question of "taking" or "exploiting," in my mind. </p>
<p>And it does sort of flatter me on a personal level to think that a college would have enough faith in me to subsidize part of my education with the assumption that what I take away from it (and what I then contribute to the world as a result) would make it "worth it"... which I know is very idealistic and not really how it works, but it makes me feel better about the whole thing, and as analogies go, it's close enough.</p>
<p>I'll let you know in April if any of this actually works in practice. :D</p>