I just want to put this idea out there because I keep seeing assertions/assumptions like “if you’re full pay at an ivy your income is above $300,000”. Well, every net price calculator we ran showed us as full pay with an income just under $150,000. I’m guessing it was because our assets were considered above “typical assets” (even though colleges generally won’t tell you what they consider “typical assets”). We have roughly $300,000 in home equity and less than that amount in non-retirement assets. We considered that “typical” (maybe even a little low for our area) but it didn’t play out that way for financial aid.
I just want to put this out there as a reality check for people starting the process. Financial aid is based on a number of factors–not just income. You don’t have to have income of $300,000, or honestly even $200,000 to be considered full pay.
The next time someone mentions being full pay but is still looking for scholarships or aid, let’s not make assumptions about their family’s income–it can get really discouraging and make you feel like you’re doing something wrong if you’re full pay but your income just isn’t at that level.
As always, it depends on the family’s specific financial situation and the school being considered.
Just as the general statement “if you’re full pay at an ivy your income is above $300,000” is misleading so to would be a general statement that “you will be full pay at every school if your income is just under $150,000.”
CC posters generally say that to be full pay, families have a high income, high assets, or both. I think income is the main driver of EFC, but assets count. An income of ~$150k plus $300k in home equity and over $200k in non-retirement assets may be typical where you live, but they’re really not typical of the average American family. I don’t think colleges take the cost of living in a particular area into account anyway. What is typical is looking for merit aid. If you tell us your child’s stats, your state, and how much you can pay we can offer suggestions that might be affordable.
No one ever said that colleges were supposed to be free. You have to assume full-pay, firstly. People try to have college savings, 529 accounts, etc., but sometimes that doesn’t happen. Financial aid is a support system and each college has their own method of calculating what they can afford for certain students’ scholarships.
Each college has a Cost of Attendance page listed on their websites.
I don’t know why people make assumptions that they are owed something.
OP; yes, non-retirement assets are assessed at ~6% in the calculation of need, but some of the tippy tops ignore or cap the amount of home equity used in the need formula. For example, Harvard clearly states on its website that home equity and retirement assets are not counted. Stanford, Yale and P’ton also exclude home equity. Cornell and Dartmouth cap the home equity at a factor of income.
I think the point that @BelknapPoint made that “As always, it depends on the family’s specific financial situation and the school being considered” is spot on, and I just wish we saw more of that in response to questions, rather than the generalizations.
We’ve finished the process for DS19, who chose a school with a full-ride/near full-ride for NMF once we saw how the NPCs were turning out, and he’s happy with that decision. Fortunately, we knew enough to run the NPCs early so that he had some good, affordable choices.
@aunt bea People expect its possible because aid, loans and merit are available to majority of other applicants. COA for colleges is too high to pay for high EFC families. What I don’t understand is why people paying little or nothing get upset when full pay families show frustration.
Considering that the overwhelming majority of schools do not meet 100% demonstrated need, one can easily be full pay if the take not eligible for state, federal or merit aid at their local in-state university.
@Riversider as a family whose daughter is lucky enough to get full coa covered at a needs-only school we are grateful and aware of how much it hurts for the families with more than us, but not enough to afford to send their kids to an expensive school like my daughter will get to attend. I completely get the frustration- to a point. We have known in real life a couple of families who are incredibly well-to-do (top 5% at least), with the lifestyle that earns, who have expressed actual anger at my daughter’s financial aid (expressed directly to me). The cars, vacations, and remodels they’ve done would easily have funded their kids (who are still years from college) at an expensive school, but that isn’t how they’ve chosen to spend their income. That’s totally fine and good, but they have to know that the schools will expect them to contribute significantly. That is different from many families expressing frustration here, of course. Obviously we didn’t expect my daughter to be so lucky. She had a backup plan of getting her AA in high school and then going to a public college to finish her BA with half of her dad’s GI Bill.
@sybbie719 is correct. I used to work in financial aid at an urban state U. It was amazing how low the income was when full pay kicked in. And @Riversider, no one was going for little or nothing. Only a very, very few students are fortunate enough for that to be the case. Your typical high achieving young person is more likely to have to pay more than they can afford.
Our family income is less than yours with a household of 6 and we are full pay at our local state colleges. I only expected aid from Ivies after doing NPCs at the different schools we were looking at while college shopping.
I don’t think this is true. Most colleges don’t meet need. And I doubt most kids earn enough merit to make a difference. Federal student loans are available to US citizens, but they aren’t enough to make much of a dent in tuition at most schools.
Where are you seeing people with free rides complaining about high EFC families? On CC it seems like it’s almost always the upper income families who complain about how good the poor have it.
I suspect people get frustrated because high EFC families generally have choices. They complain they can’t afford the $60k/year dream school so their kid has to settle for a 4-year residential experience at some other (usually perfectly fine) university. Most students don’t get that experience.
When we started our process, I knew we’d be full pay at the state schools, but didn’t expect to be full pay at the Ivies/T20. I was surprised when the NPCs showed us full pay everywhere. But fortunately we had time to adjust the application strategy. I just want to make sure other people have the opportunity to adjust rather than get caught without affordable options in April and May.
That’s good advice, @Colorado19and22. We encourage people to build their lists from their safeties up. That means to find an affordable school they’re sure to get into and would be happy to attend. I’m glad it worked out for your family.
This. If you have regular income from a job, are not self employed, are not divorced…and don’t own real estate in addition to your primary residence…the net price calculators will at least give you a ball park of what your family contribution could be.
What frustrates me is families with similar income (and not new to this income level) who complain that they will have to sacrifice to come up with a portion of the COA for their kids, and still expect significant loans, because they’ve built a lifestyle that’s only sustainable by not saving for college, and not paying their share. I don’t resent the low-EFC families, because I understand the lifestyle they live based on their income. Now I just have to learn to not resent the fact that I will lose 6% of the inheritance my parents left me every year. Somehow it felt different when it was going to ensure my mother was in a great nursing home. If I can invest at a 6% return, and keep the base amount, perhaps I will feel better about it.
I think, outside of the CC folks, most parents have no idea how much college cost now a days, and most have saved little for it. Everyone thinks their kid will get FA aid, will get merit, can work and pay for it. School counselors don’t like to talk about finances and parents don’t know enough to ask. Many do not know about the NPC. They think the HS is guiding their kid to appropriate schools. Unfortunately, in many cases they are not. We have had one really bright kid get full tuition and the second get nothing. Second is an athlete at a D3 who I think would have gotten merit if she applied RD, except she had to apply ED1 to get coach support and play on team, and school knew she was attending it she got in. It is a game. We chased merit for S, but was unable to do so for D.
@Riversider, We’re a full pay family; one of my kids won National Merit but chose not to attend a national merit campus-so it was $2500 per year of merit. Not much to cover for a $65K cost per year of school. Fortunately, we saved monies through 529 accounts, and scrimped for each of our kids. We are not wealthy, and don’t live to excess: we drive used cars, take lunches to work, do our own car and house repairs and take budget vacations, if any. Our kids worked summers for their spending money and took some jobs during the year.
Showing frustration? Please let me know how it is that I am paying nothing. I don’t think so. Just wondering why some full pay families dont have a little savings for their children; it is possible.
“School counselors don’t like to talk about finances and parents don’t know enough to ask.”
You aren’t kidding! At College Night, the speakers spent all of two minutes covering finances, and most of it was just reading the page on the handout aloud to the audience. They spent 5 more minutes covering local scholarships, which is nice, but at $500-$2,000 each, they’re, relatively speaking, “a drop in the bucket”. Yes, every bit helps, but for most kids, that can’t be the only plan.
I suppose there is potentially a liability issue there. If advice is followed faithfully, but the results don’t end up as represented, there could be a lot of upset parents. However, glossing over it contributes to the “my kid will get merit aid and everything will be fine” mentality.
In a conversation yesterday, a parent of a high school jr kept saying “But these schools are need blind and don’t make the students take loans.” Well, need blind is an admissions term, and while a few ‘meets full need’ schools do not include loans in the financial aid package, that doesn’t mean they are going to award the full COA to every student, nor does it mean you can’t take the loans to help you with the EFC.