The additional assets ($200k) in your example should only increase EFC by 5.5% (after the protected amount), so I would have expected it to only increase the contribution by at most $11k, not $24k. Are you sure you kept everything else equal? When I tried those same #s, it came up with about $53k in family contribution (including loans).
Great. But that doesnât change the fact that they give less in aid than many other schools. There are also other schools on the same or even higher level which have very large scholarships available based on merit( like Vanderbilt, UVA and Wash U).
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Yep, fat fingered the $30k tax to down to $3k tax.
Adding $200k takes it up to $54,550 or an $11,200 increase. It pays to save!
If I add two more siblings, the cost drops to $49,150.
I believe only one state had a median household income over $90k (Maryland) so a $175k income is far higher than average families.
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You forgot one. Inheritance. With the largest-in-history generational wealth transfer going on right now, a lot of these high college costs are paid with inherited money.
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Yeah, appreciate the reply. We know a few families who had grandparents fund the full 529 plans for them. Have to admit, really turned off by Tufts because itâs clearly either for the elite wealthy, or for those with significant need (whom they probably only allow in to offset the bad optics of catering exclusively to the very wealthy). Understand that as a private business itâs entirely their choice.
not true - Iâm middle class, they matched my EFC and were generous - more than all my other choices
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So hard. I hear you 1000%. We didnât have any grandparent funding. I wish. LOL. The sticker price for all is shocking. And I think whether people are low, medium or high income there are many issues. Low income (just canât do it), medium ( tons of debt upon graduation), high income (you are paying the whole thing).
Although we are able to pay full sticker price ( reluctantly), we took a lot of schools off based on value. One in particular, not Tufts, just couldnât convince us of their value v. others. Raised our kids to think of value, so our '22 actually presented argument against a few that were full priced merit and had high sticker relative to a number of factors.
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But I think that is true of most of the expensive schools that only give need based aid. Upper income families (or those with a lot of savings) can afford the COA. Families under $100k get full COA paid. Itâs those in the middle who probably canât afford to pay even half the COA and they have to go elsewhere.
It is not a new problem, and not unique to Tufts. Whether you think Tufts âworth itâ is up to you.
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It will be interesting to see what happens over the next 12-18 months as the Fed continues to raise interest rates.
Cost of borrowing will increase and thereâs a possibility of a recession. Given those 2 factors, the âupper middle classâ will have some tough decisions to make.
Assuming itâs $80k/year x 4 = $320k. Depending on your tax bracket (Federal and state), you would have to earn $500-$600k in income and allocate that just for college (per child). For some people, that means over 50% of their take home pay will go to pay for college because they donât qualify for âneed basedâ money and very few highly selective schools give merit aid.
It will primarily affect this demographic group because lower income applicants will continue to get need based aid. Schools like Tufts will cover that cost.
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When you say need based aid- do you mean grants? So families under $150K essentially have no loans at Tufts? Tufts was never on our radar, but I am surprised that it doesnât offer merit when other select schools higher ranked do offer scholarships. For us- itâs the question of whether I think itâs worth it as a full pay family. In our case, it would have been a no.
Iâm not certain on Tufts but based on my limited research there are highly selective schools that will pay 100% tuition and/or room and board if youâre family income is under a certain threshold. No loans.
Hereâs an example from Amherst:
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Tufts meets full need (as calculated using their proprietary formula) of all students, doesnât offer much in the way of merit aid (a few NMF scholarships, and ROTC). No loans for families with income less than $60K. One would have to run the NPC to see at how high income/asset levels can be and still receive some need based aid. Types of Aid | Tufts Admissions
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Wouldnât a family earning $500k+ have been saving for college for years or have pretty substantial home equity and savings?
I paid for a chunk of grad school due to a $40k inheritance. My brothers paid off cars, debt or plowed it into day trading (later BK). Iâm thankful for the money but it flowed to us because my mom died while I was in college.
I heard on NPR that the median family income at Prairie View A&M is $40k!
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Yes. Correct. Many families earning $500k do have substantial savings but the threshold for aid/no aid is much lower than $500k.
For some schools itâs probably around $200k. Take home pay on $200k after all the different taxes (Federal/State/Local/FICA) is probably around $130k. You take out $80k that leaves you with $50k to live on which sounds like a lot but youâre basically working 8 months of the year just to pay for college and taxes. You basically go from $200k to $50k for food/rent, everything else. Prior to the Tax Cuts and Jobs Act, it was even worse because many families in this income range had to pay the Alternative Minimum Tax!
And the reality is most people who make $200k probably had to work 60+ hrs/week to climb the corporate ladder, took loans to start a small business, spent money and several years getting a post graduate degree and guess what happens if they lose their jobs when theyâre 55 or their business goes down, do you get that $80k in college tuition back? No.
I think a lot of families in this income bracket are hesitant to apply ED to a highly selective school (or not apply at all) because of the costs and they understand that no (or little aid) will probably be available. Itâs really too bad because we all know ED admit rates are almost universally higher at the most selective schools.
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âWouldnât a family earning $500k+ have been saving for college for years or have pretty substantial home equity and savings?â
Not necessarily. People who had business startups worked for free (actually paying to go to work because you have to find $$$ childcare). Many many years of no pay, min wage pay and no benefits and minimal saving for college and retirement during those early years. I know many people with this experience. Throw in living in CA and itâs very easy to see that. You finally âmade itâ but they now need to recoup these investments.
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$200K in CA and $50K in tax payments plus $200K in investments yields a payment of $53K between parents and student. Itâs a lot to borrow if the parents arenât currently saving much out of the $150K net pay. I assume a significant number of Tufts students come from families making $100K to $250K with decent but not significant savings. [Half under $225K in 2017.]
Quite a few business owners might show minimal income but substantial investments or possibly minimal savings. The owners may not have paid themselves much in W2 wages but build equity.
The median family income of a student from Tufts is $224,800 , and 77% come from the top 20 percent.
The median family income of a student from N.Y.U. is $149,300 , and 62% come from the top 20 percent.
The median family income of a student from Boston College is $194,100 , and 70% come from the top 20 percent.
Thatâs the smart thing to do. My parents say - go to the best school that we can afford.
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Yes andâŠafford is relative and subjective.
Upper income families often live in upper income areas and have multiple kids in school at the same time. So paying 80-160K can be difficult even for them. Someone making 75K in Iowa can have more $ than someone in NYC making 150k due to cost differentials.
Many of these schools also count housing equity against a family though most people arenât going to sell their house to send their kids to college. My SIL was one who did. She makes a low to medium amount enough to qualify for some of the aid offered at some of the T20. But her kids werenât at that level of college. She mortgaged family home to send her kids to college. She didnât see any other way. Fortunately, income rates were low and she took a second job.
My point is, not everyone is going to fit into the school models. A classmate of my '22 got into Princeton, her parents are happy because P does not count housing. K comes from an area with lots of $$ houses. They wouldnât be able to send the kid without this consideration. Kid also got into another Ivy which has a different rule and it came off the list.
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Not necessarily. Anyone at the incomes you mentioned 500K-600 likely have a lot of savings by the time their kids get to college including 401K ( and other retirement vehicles), stocks, bonds, a vacation house (perhaps) and other things.
In addition, basic needs like housing, food and shelter are met even in the most expensive cities like San Fran/NYC at a much lower income.
I donât think someone at that level is going to have difficulty. But there are more two income families 200-300K who might.
I have no issue at all with anyone at all getting aid. What I have an issue with is the bloat at schools including Tufts and others for excessive administrative staff ( who are highly paid). And I do think thereâs a wall somewhere, maybe at 100k/year. Where people will refuse to pay and make other decisions ( like going elsewhere).
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This!
If you live where I live and make 300k, you may have the same amount of disposable income as someone making 100k in Iowa. Gas, groceries, mortgage, insurances, and just about everything else can be substantially more expensive. We live in an area where the cost of living is extremely high, so the high income rates here put people off a bit, until they realize how little is left after bills. the FAFSA and EFC do not care about where you live (which makes zero sense really and mainly benefits those who live in lower Cost of Living areas when it comes to college). CSS does take it into consideration a little.
In the end - itâs still a rough process because it still penalizes the children for the finances of their parents. If your parents grew up with inherited money, you will have better options than those who worked hard and made good money and didnât get that head start. I wish there were a better way
As an upper middle income family, who started off with nothing but college debt (no family help), with 2 kids in school at the same time, we get crushed by an efc number that is absurdly high, because itâs based on a national income scheme and not actual available cash flow.
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