Title basically. I don’t buy ANYTHING where I don’t know the actual total cost of the product. My oldest kid is going to school this fall and I know that the aid offered will vary (highly selective school) each year depending on the CSS/FAFSA.
Any comfort or advice for a parent in my position embarking on this for the first time? Is the variability year to year really that bad? Any horror stories? Pro tips?
Obviously I know to try and suppress income the best I can, but this seems like a long term problem as this child is the first of several.
Why would you want to suppress income? More money is good, not bad. Need-based financial aid does not get close to reaching a point where it decreases one dollar for every extra dollar earned. You will always come out ahead if you earn more, even with income tax being factored in.
I agree with @BelknapPoint . It’s most definitely a first world problem to worry about increased income. If you live like you did on the previous lesser income, you likely will have money to fund any cost increases.
The only time this can be an issue is at schools that have a specific income threshold for certain need based aid amounts.
Agree with the above. Is your FA need based only? If so, the only variability will come from changes in the parents’ and student’s income and assets.
Have you run the school’s net price calculator? Most highly selective school NPCs are accurate for most people so you can run some scenarios using your suppressed income strategy (remember this year will drive FA for your incoming first year’s junior year). NPCs may not be accurate in cases where parents are divorced, own real estate beyond a primary home, and/or own a business.
My daughter attended a school that meets full need. We received FA for 3 out of the 4 years (two in school) and we had no surprises.
The semester she spent abroad cost us less than our instate schools. She only took 6 credits her last semester- she could have graduated early but stayed.
All websites have a “Net price calculator”.
If they’re good, they’ll give you a pretty good idea of how much you’ll have to pay.
(They’re bad if there are only 3 questions).
If your income is 125K and under, applying to a “Meet 100%need” college is a good idea.
If your child has excellent grades and has taken the SAT/ACT where they scored in the ~top2%, looking for merit gives you a good idea of costs since that scholarship remains the same each year.
Do you qualify for Pell Grants?
What school is it? Is it a school that meets 100% of demonstrated financial need? If so, your aid won’t vary drastically year to year unless your income varies drastically.
People whose income is mostly something other than W-2 income from one job per person are more likely to have fluctuating income (small business, farm, investment gains and losses, etc.).
I was hunting for a thread that would discuss whether aid will continue beyond the student’s first year. Of course need-based aid will move year-to-year depending on the student’s (& family’s) financial situation. But beyond calculating a student’s “need” based on the FAFSA and/or CSS, a school may be more likely to “pull” aid back from the first year package once the student has matriculated:
Redistribution of need-based aid to loans from institutional need-based grants, and
Pulling back merit aid (aka tuition coupons) once the kid has matriculated and boosted your yield and metrics.
Yes, graduation rate counts for the rankings of course. But the yield and admissions metrics are SO important in that regard, that they’d have to see a pretty substantial number of these students transfer in order to really hurt themselves more by lowering the grad rate (especially compared to the “typical” student). Plus even if they’re going to transfer, getting the rug pulled out in April means they’re still likely to suck it up at your school so they don’t have to take a year off. So you get added revenue, and maybe they’ll stick around and take a slew of loans if they just love it so much and can’t envision themselves anywhere else.
So where is it most difficult to see your gift award, need-based or merit, be renewed in full? I’ve heard stories of a few schools but for at least one the data they present doesn’t appear to support those claims.
It is likely that the issues are different for need versus merit based aid.
For need-based aid:
The college may assume that the student will take the increasing amount of direct loans each year (i.e. $5,500 first year, $6,500 second year, $7,500 third and fourth years).
The college may assume that the student can earn higher amounts of work earnings in later years.
Obviously, if the family financial situation varies, financial aid could vary with it. Perhaps the worst situation is if the student’s parents have a nasty divorce and stop being cooperative on college financial aid while the student attends a college that requires both divorced parents’ finances.
For merit scholarships:
A high college GPA to renew a merit scholarship could result in a high percentage of recipients losing the scholarship.
Many scholarships are fixed amounts renewable for four years, but if costs increase, the net price after the fixed amount of scholarship still increases.
A student who needs more than four years to graduate will face whatever cost there will be without the scholarship after the first four years.
Was it @taverngirl who mentioned University of Rochester financial aid getting worse after frosh year, making it unaffordable for some to continue?