Using $180k instead of $150k parental wages/salary in the Harvard NPC with other parameters as in reply #47 gives a net price of $46,800 instead of $24,600. Still not full pay… but it does show a rather heavy FA penalty in that range of income.
For someone sending one kid to Harvard, the extra $30k income from $150k to $180k would pay an extra $8.5k income taxes and and extra $22.2k to Harvard (total $30.7k). Testing the Harvard NPC further*, it looks like a big part of the added cost comes between $175k and $180k income, where the extra $5k moves the net price from $36,725 to $46,800, a $10,075 increase.
*Harvard’s NPC is particularly easy to do “what if” tests on, or reverse-engineering its FA formula.
Interesting calculator. I put our info in and came up with a little over 6K with my income being only 25K. But if I up the income to 100K the net price only goes up about another 5K to 11K.
“No college would cost this much if a fortune wasn’t being spend on financial aid, athletics, administration and marketing.”
@Riversider:
If you think that’s the ideal, why not go to uni in Germany? None of them spend any money on athletics, fin aid, or marketing, and much less on administration than US colleges do. And they are all tuition-free.
For that matter, why not consider the CUNYs? Not much money spent on athletics and they don’t have much money to spend on fin aid, marketing, or their administration either. Much cheaper than privates even if you are OOS.
Besides the amenities, we also see students and parents posting here extolling the virtues of small, highly interactive classes taught by tenured or tenure-track faculty at all levels of undergraduate study. But that costs more than if those tenured or tenure-track faculty taught larger classes, possibly with the assistance of TAs to run labs and such, a more economy-class format.
@PurpleTitan Why not? We don’t want to. I prefer freedom of complaining and whining here in my own country about colleges my kids want to apply to and can get accepted at but thank you for your suggestions.
This isn’t uncommon for CC and I don’t understand it. Why do people think they can just set aside large portions of their income and expect colleges to use the lower figure to calculate aid? Do some colleges actually do that?
The median US income is about $56k. A $30k/year retirement savings is more than half of that. If families can put that kind of money away every year for retirement I can see why colleges think they can divert it for a few years to pay for school. Why does it surprise people that colleges expect them to pay the stated cost of attendance?
If it’s discouraging to not get aid when you have a $180k income, $300k in home equity, ~$250k in non-retirement assets, and the ability to sock away more than half of the median US income for retirement every year imagine how the people who actually earn the median income feel. Most aren’t getting acceptances to schools that meet need, and a $20k merit award isn’t going to make a $60k/year school possible when the net cost is more than 70% of your gross income.
Lower cost schools aren’t necessarily more affordable. Our state schools’ COA is ~$25k/year. The net cost (after federal and state aid) for a family who earns ~$60k would be about $20k/year. And most probably don’t have thousands in retirement contributions that they can divert for a few years. If they can commute it’s probably closer to $10k, but that requires getting one of the limited spots available to commuters. That means the local university is a reach, and their safety is a community college.
I guess I just don’t understand why upper income families are so upset at not getting enough aid to make their top choice schools affordable. Many seem to have multiple options that aren’t quite as expensive. Most lower income families have only one, and some not even that.
You realize getting a full ride anywhere is pretty rare, right?
Retirement assets in a “qualified retirement plan” aren’t part of the aid formula. But having the income and diverting it, pre tax or post tax, is seen as funds that would/could be available for college costs.
@austinmshauri. OP here. I think you’re misunderstanding me. I am not upset (I haven’t been complaining, just explaining how it worked for us) and I’m thankful with how things have worked and am glad my son is happy with his choice. It will be a blessing for him to start out life without a lot of loans. We are very fortunate to have figured out the financial aid/how to pay for college landscape before my son did a lot of applications to schools that wouldn’t be affordable, but based on what I’ve read here on CC, some families/students weren’t able to do that.
We’re in a major metropolitan area and we have a lot of colleges visit and do presentations, and the message we heard from the colleges that meet full need was (I’m paraphrasing here) don’t worry about the cost, we make it affordable for everyone. The message we took away from those presentations was that families with income under $200,000 would be eligible for aid. What we didn’t know at the time, and the whole point of my starting this thread, was that the generalization on income doesn’t always hold true. Since that wasn’t how it worked for us, I wanted to share so some family in the same boat might see this as heads-up and not be stuck with unaffordable choices at the end of their process.
As far as retirement savings go, before running the NPCs that had us add the retirement savings back into income we did think they’d be excluded, because the message we had heard from colleges was that retirement savings weren’t considered in determining financial aid. We didn’t distinguish between current savings and savings in the past, because we didn’t know colleges treated them differently (obviously we were naive). We know now, and I totally get why they would be considered available to pay for school-- we just didn’t know then.
I think the discussions in this thread about why college costs so much and some of the tensions between full pay vs. receiving aid are interesting, but only tangential to my initial point.
It depends. If you can get it down to the point where you hit the Auto Zero amount (less than 26K AGI), then the formula just skips all income questions including adding back in pre-tax contributions.
Also, HSA contributions never get added back in no matter what, so they’re completely invisible.
I think this thread points out an important detail - that it’s not just income that is considered. I hear that a lot. Colleges and parents all talk about the highest income that still gets need-based aid. Our income is usually below $200k but the reason we are full pay is because of savings. In our minds, much of this savings is for retirement even though a lot of it is not in retirement accounts. One can only save so much in a retirement account. Any other savings is considered even if you feel like it’s earmarked for something else be it retirement or a larger than allowed safety net.
@cshell2 would those assets be in any way typical for a family with an income of 25k? I would be fairly shocked if they were. I would imagine most are closer to us, with little to no assets at all.
@milgymfam - No idea what’s typical, but that’s what my numbers are. The 30K in DS’s name is money his grandparents saved for him in an UTMA, the 75K is mostly college savings for both kids. Income is AGI. Gross is more like 45K.
I would imagine every case is unique but Yale offered substantially more than Harvard to my kid. We have about 40% equity in our home. NPCs are useful but a truer picture comes out with the FASA and CSS.
@cshell2 you have my admiration. I can’t imagine being able to save $75k on a $25k salary for a whole family. We have no savings at all at approximately double that. How do you end up with your AGI close to half your actual income, though? Thats a rhetorical question as I know it’s none of my business. That’s a new one to me too. I’m learning a lot on this thread!
“I guess I just don’t understand why upper income families are so upset at not getting enough aid to make their top choice schools affordable.”
I was intrigued by the analysis of the Harvard aid calculator above in post #60. I would get pretty irate if I was close to the zone where my contribution was increasing faster than my after tax income, so if I earned $30K more gross, I had to pay out $35K-$40K in taxes and increased college tuition/R&B costs. You would have thought these colleges would be more careful about the consequences when making promises like “earn under X and you’ll only pay 10% of your income”. It’s analogous to complaints that loss of benefits makes it not worth working for poor families/individuals.
@milgymfam - I have over 10K/year coming out of my check pre-tax for health insurance and dependent care FSA for childcare for my 8 year old. The rest is 401K. I get child support for the kids or it wouldn’t be possible. Savings has been just $100/month/kid since birth, and I was married with more income until about 7 years ago (although I think I’m doing better financially without him despite less income).