Harvard is basically free for not-well-off kids?

Colleges & Universities A-Z Harvard University
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<p>“But it would be a financial burden on my family to pay nearly $60,000 out of pocket for me to go to Harvard”</p>

<p>It’s also a financial burden for our family to pay 32k per year! We’ve had to make sacrifices to make it all work. We haven’t taken a family vacation in four years, we are driving a 10 year old car, we don’t go out to dinner often and I constantly say to my spouse “I don’t think we can afford it this month.” None of that makes our family happy . . . but as the total cost of our state college is 21K per child/per year, we are giving our kids an “Ivy League” education for less than the cost of our state school.</p>

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<p>Harvard’s financial aid program aims to make it so no student turns down Harvard because of inability to pay. The difference between a family that makes under 60k and a family that makes 250k is that the former almost never has the ability to pay, and the latter almost always does. The key word is “ability” and makes no claim on the comfort or ease of doing so. Because 60k minus the cost of living is far less than 250k minus the cost of living, a family that makes 60k cannot readily pay 21% of its income without taking away essential funds – a place to live, food, transportation. A family that makes 250k can pay by readjusting its expenditure and decreasing its standard of living. Now I know this isn’t an exact science because of the variance in cost of living, but the reason a 250k family doesn’t have “need” is not because they’re expected to drop 60k like it’s nothing, but because they will almost never have to trade education for food or clothing. Someone at Harvard decided that such a trade shouldn’t be expected of families.</p>

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<p>gibby, out of curiosity does Harvard/Yale take into account home equity, savings, any retirement accounts etc… in your case? I guess colleges really don’t take into account retirement accounts. The reason I’m asking is that most private colleges make you complete the CSS- a much more detailed account of a family’s finances that savings/home equity may negate them giving any/little financial aid. Every family is different and what one family may be able to swing financially, another family may not be able to (helping supplement grandparents’ income, medical expenses, parents close to retirement age and needing to save for retirement). Even making sacrifices may just not be sufficient to warrant high college costs up front.</p>

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<p>Your family earns more than 98.5% of all households in the United States. How is that anywhere near middle class?</p>

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<p>How would you even define merit for scholarship purposes, when such a high percentage of the students have near perfect GPA and standardized test scores and significant achievements in vastly different areas? Is someone who published books at 16 more deserving of “merit” than someone who’s nationally ranked in math or science? Is founding your own non-profit organization more deserving of merit than founding your own business? Than speaking many different language? Than performing professionally?</p>

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<p>@goingnutsmom: Both Harvard and Yale require the CSS Profile. Each college ignores the value of a retirement account, but both look at yearly retirement contributions and add-back contributions to your overall AGI for financial aid purposes. Both H and Y want to know the exact value of your cash-on-hand, as well as the curent value of your stocks, bonds and annuities. Neither school asks about home equity on your primary residence, but they do so for secondary homes.</p>

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<p>If OstPrusssen think’s he’s middle class, then this discussion is moot. I’m worried that his analytical skill are so poor he won’t make it past the first read.</p>

<p>OstPrussen: You should make a goal for yourself to tutor/read at a disadvantaged school. Give you some perspective. My large nearby urban school district has ~22% graduation rate for 9th graders in four years. Among those, maybe 10% even enroll in a 4 year college. Among those half graduate in 4-5 years. That means approx 1 out of 100 ninth graders will have a college diploma in 8 or 9 years.</p>

<p>How about some perspective and gratefulness for all the factors that have gone into allowing your academic gifts to come out? How should those 99% of kids in that city look at your “plight?”</p>

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<p>T26E4, I do these things that you speak of. I am not ungrateful in the least. Just so you know, I am where I am today because my grandfather had to defect from his home country of East Germany because he was a conscious objector. He didn’t really want to leave the country, but there really was no other option for him. He made a successful career as an engineer in the US because he had a degree from back in the GDR. So needless to say, my family knows hardships too. First the Nazis and then the Soviets. But rather than hoard the fruits of our labor, we do give back to those less fortunate in this country through volunteer work and donations. Finally, I am not your angry white male who is unsympathetic to the hardships of others. My girlfriend is actually first generation from Sierra Leone and like my grandfather, her parents left because of political hardships and I understand what her family and people have gone through. That’s all I have to say.</p>

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<p>“I’m not unsympathetic because I know a girl who’s had troubles.”</p>

<p>You do realize that’s like saying you’re not racist because you have a black friend, right?</p>

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<p>Ost: Let me step back and apologize for being too preachy with you. Your question is legitimate. However, Harvard and a handful of other schools are in the enviable situation to drop massive amounts of Fin Aid to those they accept. If you find H’s formula to be objectionable, then you’d be downright furious with those of say, NYU or WashU.</p>

<p>Harvard and the other super rich schools have enormously generous EFC requirements of “middle class” families. If your father’s income is somehow entrepreneur related (i.e. reportable income is not equiv to actual liquid cash) then he’s welcome to request a revisit. But in general, H is not out of line to ask a family earning $250K to be almost full freight.</p>

51

<p>I do not find it hard to believe that a family with an annual income of $250,000 would struggle to shake loose $60,000 per year to pay retail for Harvard.</p>

<p>But unless your father just recently came into a high-paying job, your family should have been saving for college expenses for years. Colleges do expect–not unfairly, I think–that families with means will pay their contribution from a combination of savings, current income and (often) loans. If your family has been saving, then there should be money to pay for college. Even then, they still won’t pay it painlessly. If they haven’t been saving, I’m sorry about that, but I don’t understand why a private college or university should have to make up the difference when your family elected to spend its money elsewhere. (Exception: I would understand if the money went to expensive care for a disabled family member, extraordinary medical expenses or something like that. And so, I think, would Harvard. On the other hand, if the money went for a fancy house, vacations, private-school tuition, etc., those were consumer choices.)</p>

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<p>My impression is that Harvard makes pretty generous allowances for things like houses and private school tuition. Houses are especially tough, because values differ so much place to place. The cost of a mansion in Cedar Rapids might get you a broom closet in much of Southern California.</p>

53

<p>Sikorsky,</p>

<p>Actually, except for families who won’t qualify for financial aid anyway, saving specifically for college is a bad idea, in my view, especially if one uses a tax-preferenced college savings account.</p>

<p>With stagnating and declining household income for middle class families, saving money at all is difficult. Saving for college should be the lowest priority. For families, once a family has a modest amount of emergency savings (ideally, six months worth of bills), tax-preferenced retirement accounts should be the most important form of savings, especially for those of us with little or no opportunity for defined benefit pension plans from where we work. After making the maximum retirement account contributions, if a family can still afford to save anything, it should go into unspecified, general savings and investments.</p>

<p>The reason for prioritizing retirement savings and for avoiding savings that are clearly earmarked for college is that the colleges take whatever they can get, and then come back and take more.</p>

<p>If you have college savings accounts, most schools will figure out what they want from your current income, and then will add in a large portion of what’s available in the college savings accounts. All things being equal, they’ll add roughly 25% of the college savings account to what they expect the family to pay. So, if the college wants $15K from your regular income, and you have $100K in a college savings account (the ones where you can save tax-deferred for college), they’ll want $40K per year from your family. Having the college savings account doesn’t help.</p>

<p>Similarly, most colleges will tack on about 5% or thereabouts for every dollar of savings that you have beyond a certain threshold. So, if the school wanted $15K from your regular income and you have $100K in savings above the limit that they provide (which limit, from what I could see, varied from school to school), they’d want $20K per year.</p>

<p>The only savings type where you don’t get penalized is with retirement accounts. The schools don’t look at retirement accounts when determining EFC (unless, from what I’ve read, you have a really outsized retirement account).</p>

<p>So, by the way schools treat family savings and investments, families are encouraged to focus heavily on saving in retirement accounts, and not for college. People with college-specific savings are heavily penalized, and people with a lot of non-specific savings who have stinted on their retirement accounts are also penalized somewhat.</p>

<p>As for your list of “consumer choices,” in that many folks assist their children in enhancing their chances to get into top schools through the use of private primary and secondary education, it seems that there is a little bit of an inherent contradiction in the implicit criticism of folks who choose to provide the best primary and secondary education for their children and thus find it difficult to save for college.</p>

<p>In my own family, we sacrificed a second income for ten years to homeschool my two sons through 8th grade (total cost at least in mid-six figures), and then spent/are spending another $100K, roughly, to provide them with a good, if not extremely expensive high school education. My own belief is that these educational choices, expensive though they may have been, are part of what enabled my older son to gain admission to some very nice schools, and what have my younger son on track to achieve similar success.</p>

<p>The bottom line is not that families aren’t doing what they need to do to get their kids through college but rather that higher education costs too much. That’s the real root of the problem. I’ve read that the overwhelming percentage of increased financial aid, especially loan money, has accrued to the institutions of higher learning in the form of being able to raise tuition and other costs at rates well above the rate of general inflation, while actually reducing the cost of education to families very little, if any.</p>

<p>When I graduated from college in 1981, the “retail” price of tuition at my college was about $3,500 per year. My father worked for the federal government and made about $60K per year. My mother had an administrative job and made about $20K per yeaer. Today, the same university has a “retail” price of tuition of about $30,000 per year (exclusive of room and board), but the same government job pays about $120,000 per year and the same job in county government where my mother worked gets about $30K per year. Do the math.</p>

<p>There’s something wrong here and it’s not that families aren’t saving enough for college.</p>

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<p>If memory serves me right, I think I read somewhere that Harvard does not expect any family contribution from those making under $100k per year. Then, 10% beyond that. So, a family earning $250k would be expected to contribute about $15k a year.</p>

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<p>^^ No, that is wrong. Please see: [Fact</a> Sheet](<a href=“http://www.fao.fas.harvard.edu/icb/icb.do?keyword=k51861&pageid=icb.page246751]Fact”>http://www.fao.fas.harvard.edu/icb/icb.do?keyword=k51861&pageid=icb.page246751)</p>

<p>“families with incomes between $65,000 and $150,000 will contribute from zero to ten percent of income, and those with incomes above $150,000 will be asked to pay proportionately more than 10%, based on their individual circumstances. Families at all income levels who have significant assets will continue to pay more than those in less fortunate circumstances.”</p>

<p>Also see: <a href=“http://harvardmagazine.com/2011/09/bending-the-curve-on-financial-aid[/url]”>http://harvardmagazine.com/2011/09/bending-the-curve-on-financial-aid&lt;/a&gt;&lt;/p&gt;

<p>“The new formula, according to the Faculty of Arts and Sciences (FAS), means that families with incomes between $150,000 and $180,000 will now be asked to pay between 10 percent and 16.5 percent of income, depending on their assets (potentially raising the annual cost for the families at the top of this range from $18,000 to $29,700).”</p>

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<p>Thanks gibby, for info and link to calculator, very helpful. so this is something that changed in 2012. It seems parents with a $65k annual income and $100k in asset equity have no contribution.</p>

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<p>Notjoe, I agree with a lot of what you said. I particularly agree that it’s galling the way the price of higher education has dramatically outstripped inflation for decades. And I also surely agree that families need to prioritize saving for retirement above saving for college.</p>

<p>But given the little information we have here–and I’m certainly not trying to ask for more–about the financial circumstances of OstPruessen’s family, your limitation, “except for families who won’t qualify for financial aid anyway,” seems likely to apply.</p>

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<p>Sikorsky,</p>

<p>“But given the little information we have here–and I’m certainly not trying to ask for more–about the financial circumstances of OstPruessen’s family, your limitation, ‘except for families who won’t qualify for financial aid anyway,’ seems likely to apply.”</p>

<p>Yes, but my only point in making that exception is that families with incomes of somewhere around $250K, or maybe a little lower, are going to get screwed by the system anyway, so it doesn’t matter as much how you prioritize your savings.</p>

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<p>OstPru - How is it that you’ve already been accepted to Harvard and to Brown? Re: post 34</p>

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<p>Harvard has the largest endowment in the world I think about 35 billion dollars. In other words, they do not need a students measley $50,000. Their budget is infinite because they constantly get large donations from their huge database of wealthy top 1% society alumni. Every Ivy League actually allows you to go for free if you make under $60,000 simply because they need to create socio-economic diversity, it boosts their rankings and it also publicizes their school hence that is why over the years there are more students than ever applying because of their generous aid policy. In a sense, anyone that gets offered a place at Harvard would most likely recieve a full tuition scholarship at a state flagship school or average university anyways. So it is probably safe to say that everyone at Harvard gets their money in a merit way.</p>