^^ Unlike Harvard, Yale DOES count home equity on a family’s primary residence for the purposes of calculating financial aid.
Stand corrected. I wonder how many schools do. We didn’t run into this at all with three kids.
Will the “what is middle class” war never end?
You are asking the wealthy to get out more, but are dismissive of their experiences or the disparity of what $175k buys a family around the country. Personally, I don’t think you want to hear it at all. But it doesn’t mean it does not exist.
I don’t think the definition of middle class is that difficult to determine. If your income is in the top 5% of US incomes, you aren’t middle class. But if you don’t qualify for much/any need based aid at colleges with generous financial aid, the definition of middle class doesn’t matter. You’re faced with the same choice that many lower income families encounter at a lot of schools.
When financial aid packages stretch the family budget, they have to decide whether or not the school is affordable or too much of a financial reach. It’s unfortunate when a favorite school has to be declined for financial reasons, but I suspect it happens a lot. I think the only alternatives are cosigned loans, which I don’t think is a good option, or an appeal to the school. Unless there are medical bills or a change in family circumstances I’m not sure an appeal stands much chance of approval, but it can’t hurt to try.
The definition of middle class as it pertains to FA is a national definition, since FA is not adjusted for cost of living. $200k is 3 to 5 times the median income depending on which state you’re in, so to me, it’d be hard to claim anything above that is still middle class.
A private college education is pretty much a luxury good, so a family making $200k isn’t middle class just because they can’t comfortably pay $260k out of pocket for it.
$175K is not “solidly middle class”. Sorry, you are dreaming. And unless you have major expenses, you won’t receive much aid. Financial aid is just that–it is intended to help people you cannot afford to attend, not those who do not want to pay.
What I find puzzling is that in 2008 our income was higher than it is today and our expenses and debt were lower, yet they offered our oldest D twice as much then than they are offering our other D now. It makes no sense unless they’ve changed their financial aid formula.
@martinezrulez I wouldn’t consider <65K to be “very” disadvantaged. That’s a pretty large range, and there are plenty of people that live comfortably towards the higher end of that designation
@Sunflower219: Harvard changed their Financial Aid policies in 2012. So, yes if your family income was at the high-end of how Harvard defines “Middle Class”, your older daughter admitted in 2008 received better aid than her sister was given in 2016. See: http://harvardmagazine.com/2011/11/financial-aid-refigured
I think part of what is lost here is that college costs don’t exist in a vacuum. If you live in California and make $175 per year, your take home is about $112k. Most families with this income level own homes, and California is expensive. If parents bought a home when their child was 10 years old and assumed a mortgage + taxes of $3500k per month (which is easy to do with a modest California home where taxes can be well over a thousand a month) that’s $112K minus $42K in mortgage leaving $70k for other expenses, which will just about the cost of a private school per year. Our family has saved diligently for 15 years, but amassing $260,000 in savings which can be spent on undergrad for one child is unrealistic given a salary like $175,000. So yes, $175,00 seems like a lot. But it goes VERY quickly and families that miss the cutoff for financial aid are in a tough situation and have to make difficult choices. I have a sister who has purposefully saved NOTHING for college for her four kids, because she knows she’ll get more aid that way. Risky? Probably. But I fully believe that even though I saved and scrimped to afford college for my kids, she and I will both be in the same spot when we are done paying for college. Broke.
Excellent post @NJFL123 and @gibby nailed it as well. You both pretty much described us to a T and we were lucky that D applied before Harvard and Dartmouth changed their rules. We still ended up paying a good chunk of change, but I could never have paid full freight on top of mortgage and property taxes [now about $1300 a month].
@excanuck99 : Please read.