FAFSA EFC of $47K

Paying for College
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<p>Hey dumbparent, kinda hurts to be getting ‘smart’…:slight_smile: Join the club, we’ve all seen the light. It’s just amazing seeing how many don’t until it’s too late. I’ve been on CC for 7 years & I’ve NEVER seen it like this, not even so much last year. And for so many, decisions have to be made & quickly.</p>

<p>That $58K figure for NU HAS to be out-the-door, not just tuition, right? And William & Mary didn’t offer anything? I really wanted D1 to apply there, couldn’t even get her to visit. Had a thing about W&M ever since it was a lyric in Steely Dan’s ‘My Old School’! (BTW…both Donald Fagen & Walter Becker attended Bard College in upstate NY…but I digress!)</p>

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<p>“if someone pays less then their portion (due to FA) then someone else is paying more”</p>

<p>Right, students pay differing amounts, but full list payers still don’t subsidize those receiving financial aid (at least at privates; publics and taxes are a different issue).</p>

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<p>I could have written the OP’s post a couple of years ago.</p>

<p>Looking back, the financial aid process is very similar to the 7 stages of grief:</p>

<p>1) Shock and disbelief: “They expect me to pay half of my after tax income?!?! WHAAAATTTT!”</p>

<p>2) Denial: “No way, that can’t be right, college can’t cost that much, my kid worked so hard, they deserve to go to that school, they said it would be affordable.”</p>

<p>3) Anger: “It’s just WRONG that they expect me to give them everything I own. I have other kids and a mortgage! This is so unfair, those damn low income kids are getting a free ride.”</p>

<p>4) Bargaining: “How do I appeal my kid’s FA award?”</p>

<p>5) Guilt: “I should have saved more, I should have paid more attention to how expensive schools were getting, I should have made him apply to some financial safeties, I should have gotten a career that paid better.”</p>

<p>6) Depression: “All my kid’s hard work wasted, I can’t even think about this right now.”</p>

<p>7) Acceptance and hope: “State school here we come! And I’m much better prepared for kid no. 2.”</p>

<p>:cool:</p>

<p>

At current rates of college inflation, 4 years of private college will cost a newborn $400,000-$500,000. $50/month isn’t going to get it done. This will require on the order of $1000/month (after tax) for your kid’s entire life. Times 2 or 3 if you have 2 or 3 kids. How many young parents can afford that?</p>

<p>The “good” news (if you can call it that) is that a job that pays 3x what a year of private college costs will probably only pay about 1.5x (or less) the cost in 20 years. So maybe our kids will qualify for FA when they are parents. :)</p>

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<p>

You can believe that if you like. But if you have a school that AFTER money from endowment requires an average tuition payment (average for ALL students) of say $30K to meet it’s yearly budget. If some students are paying $10K, then some are going to have to pay $50K. Now you can say the full-pay is “not subsidizing” the lower pay, but the reality is the full-pay person is paying more because the school has to make up the lack of payment from the zero or low paying students. If there were no FA at all, then every student would be paying 30K. Since that’s not the case, I call it a “subsidy”. If you want to call it something else, fine, but the end result is the same.</p>

<p>Think there’s any school that could have 100% student body of EFC=0? don’t think so (well other than a very few like Harvard which have a huge endowment). Even need-blind schools know statistically that a good percentage of admits will be full pay. Colleges are a business, not a charity.</p>

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<p>

</p>

<p>This makes no sense in a non-profit scenario.</p>

<p>The cost for each kid is the same. If I pay more, that lets you pay less; it doesn’t matter that both of us are also getting subsidized by the school.</p>

<p>You could say, well, the school is subsidizing the poor kid more, but they can only do this because I am paying more. It’s the same thing.</p>

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<p>Notrichenough, i was just making a point of saving ‘whatever’ one can afford at a very young age…clearly 50 bucks a month won’t provide much at college-time,but something is better then nothing…</p>

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<p>Another way of looking at it is that ALL students receive financial aid, with full-list payers receiving less than those with “lower” family incomes.</p>

<p>There is no transfer of money from full-list payers to those officially on “financial aid.” Both groups (except the very poorest) pay something to the school, and both groups receive something from the school. It’s just a matter of degree.</p>

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<p>

And because I am paying more, it makes it possible for the school to allow someone else to pay less. IOW, I am subsidizing them, the fact that I am not directly cutting a check to the poor family doesn’t make it less so.</p>

<p>To the best of my knowledge, schools budget a certain amount for financial aid. Which makes it a zero-sum game. Maybe there are a few schools that just offer everyone whatever aid the formulas say they should get, without regard to how that depletes the endowment, but I doubt there are many,</p>

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<p>

Yeah, I was just trying to make the point that it really isn’t possible any more for upper-middle class families (and forget about middle class) to save enough to actually fund a private college education, unless you are the Warren Buffett of the 529. But it is better to have something as opposed to nothing.</p>

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<p>Well, then those receiving $10k in “financial aid” subsidize those receiving $50k, if we want to think of it that way. That’s okay! :)</p>

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<p>“There is no transfer of money from full-list payers to those officially on FA”</p>

<p>Well technically the school will say that because otherwise there would be an uproar by full-pay parents. Regardless of whatever accounting leger entries you call it, the effect is the same. Now the way the schools current presents it is effective because even here on CC someone who’s been around for quite a while (you, and many others) don’t see it as a subsidy.</p>

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<p>Notrichenough, I love your 7 stages of grief. It does feel like grief to be moving backwards. My parents were able to pay completely out of pocket for my education at an excellent LAC. My husband and I have benefited hugely from our excellent educations…they’ve resulted in high paying jobs and a great network. Sadly, we can not provide the same for our kids, despite working hard and saving religiously. When you come from a family where education and advanced degrees have been highly prized for generations, it feels like failure to move backwards and not be able to provide options beyond the state system.</p>

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<p>OP - you may want to think about using your savings up first before coming up with other funds. Then in subsequent years, you will have less savings and your EFC will be lower. Your son may then qualify for financial aid, especially after your second child is in college.</p>

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<p>qdogpa - friendship is essential to the soul. we need to take out a small loan for our D (we’re squeezing out as much $ as we can). do you think the federal PLUS loan is a better option than an adjustable rate loan??</p>

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<p>dumbparent, my son, like yours, was in a GT program and at one point was very interested in U. Chicago and Northwestern. He is now at a state flagship school (University of Michigan, instate) in a small program and is very very happy. He was fortunate to also receive full tuition in merit. I cannot describe how relieved we all are that this is how it all went (because now he’s talking grad school ;)</p>

<p>For parents earlier in the process than the original poster, here’s a tip how to create that outcome in your child (it was HIS first choice) – Drive him by a house that is selling for $200,000 and get out of the car and walk around. Explain that some family will pay 30 years to pay off that mortgage and show him what that payment will be. Ask him if his four year undergraduate at a private is WORTH THAT HOUSE. Then tell him you’ll help him buy that house one day if he manages his college process without breaking the bank :wink: (I sound like I jest, but I actually had that convo, especially over NYU Tisch! And we’re all good now!)</p>

<p>OP, You are fortunate like us to live in a state with a world-class university such as UIUC.</p>

<p>That said, if you are feeling closed in by your narrowed options, an additional option might be for your son to either take a gap year (and do something fun and educational for far less money :wink: to try a different tact at schools that might give merit OR:</p>

<p>Look at some of the stronger programs at Canadian universities – some which in terms of world rank, are even stronger than NU (though not smaller or more intimate per se, but there are a few.) Comparatively, the Canadian programs even at international rates are less expensive that UIUC IN STATE.
McGill is an especially well priced and well-regarded option.</p>

<p>Just a thought. Now enjoy a stiff drink and repeat: We love our safety school. We love our safety school.</p>

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<p>Sorry I’m not smart enough to know how to quote in these threads, but W&M gives out very few merit awards. They give out four (Yes. Four.) Murray Scholarships of around $19K a year (basically equivalent to in-state tuition), a grant called William and Mary Scholars for students who have overcome difficulties of some type (financial, home life, ect.) and then an honor called Monroe Scholars to about 7% of the class that, unfortunately, does not include merit money (but does have a research stipend). I was lucky enough to receive a small grant to bring the cost in the 36k range because my parents are divorced and my custodial-parent EFC on the FAFSA was far lower than my CSS Profile EFC. It’s a great school and I’m so excited to join the Class of 2015, but a lot of money for an out-of-state public nevertheless.</p>

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</p>

<p>The school budget assumes a total income of $x from tuition, along with the FA budget. Different schools slice and dice this in different ways, which means that different schools have different aid formulas. There are a few handfuls of schools that have both need-blind admissions and meets-full-need FA, but the awards will differ wildly among schools. Someone with a household income of $150k may get very little from Northwestern, but then will get a lot more from Harvard. Yet even the most generous schools (Harvard, Yale, Princeton and Stanford) might tweak their formulas, depending on how their endowment is doing. There was one long thread last fall where a family’s early read on FA from one of those four super-generous schools was far, far worse than expected, because the family owns a small business. </p>

<p>When FA budgets shrink, then the school can either have need-aware admissions (and try to meet full need as defined by the school), or they can have need-blind admissions (and not award aid to everyone). One way of doing need-blind admissions would be to use whatever FA is available and just dole it out to those with household incomes under, say, $30k. Or you could dole out smaller smidgeons to everyone with household incomes up to, say, $100k, or $150k. I’m guessing that the enrollment models don’t work on this, otherwise we’d see schools offering this kind of plan. Which makes sense: someone from a very-low-income household isn’t going to be able to pay for an expensive school unless the school offers them tons of aid. And someone from a donut hole household probably isn’t going to be able to manage if they’re only getting a few thousand off the bill.</p>

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<p>* OP - you may want to think about using your savings up first before coming up with other funds. Then in subsequent years, you will have less savings and your EFC will be lower. Your son may then qualify for financial aid, especially after your second child is in college. *</p>

<p>Mema, interesting idea to spend down the savings and see what kind of FA shows up for No. 2 son in the future. Actually, if we spend down No. 1 Son’s half of our $180K college savings first, it might have an impact. However, I’m reading everywhere that my EFC is all about my AGI of $150K, and not my assets on hand or home equity.</p>

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<p>Love it, Notrichenough. Gonna use it --did you make that all up?</p>

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<p>*Hey dumbparent, kinda hurts to be getting ‘smart’… Join the club, we’ve all seen the light. It’s just amazing seeing how many don’t until it’s too late. I’ve been on CC for 7 years & I’ve NEVER seen it like this, not even so much last year. And for so many, decisions have to be made & quickly.</p>

<p>That $58K figure for NU HAS to be out-the-door, not just tuition, right? And William & Mary didn’t offer anything? I really wanted D1 to apply there, couldn’t even get her to visit. Had a thing about W&M ever since it was a lyric in Steely Dan’s ‘My Old School’! (BTW…both Donald Fagen & Walter Becker attended Bard College in upstate NY…but I digress!) *</p>

<p>Jnm, yes, this has been quite the education. Every parent should be force-fed the FAFSA calculator when their child is a freshman in high school, at the latest. The HS counseling department, the college folks, the workshops and brochures…all WORTHLESS without that. While I’d agree that $48K EFC is an altogether more desirable situation than $0 EFC, there’s plenty of angst to go around.</p>

<p>Yes, the NU figure is “out the door.” No aid from W&M, but I wasn’t expecting any as it’s a public school with a relatively small enrollment. Still, it’s about $16K less per year than NU.</p>