<p>We all know that at private IHE's such as Stanford middle-income families are struggling to pay the cost of their children's education. To ease the financial burden, Stanford University has announced it will commit $5 million in financial aid for the 2007-08 academic year to give middle-income families both a lower parent contribution and a reduction in the amount students are expected to borrow during the school year - to $2,000 from $3,500, which will be offset by increased scholarship funds for students. </p>
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...seemingly small changes in the way colleges treat the home equity of students’ families can have a major impact on what middle class families need to contribute...</p>
<p>On Wednesday, Stanford University announced such a change, and while they have not gone public until now, leaders of a group of elite private colleges confirmed that they too had recently changed the way they consider home equity. In both cases, middle class families could find themselves paying several thousand dollars less than they do now to have their children attend some of the most prestigious colleges in the country...</p>
<p>Officials who are making these changes say that they represent much-needed rrelief for middle class families, especially those who bought homes 15 or more years ago and have seen their values skyrocket to make them millionaires on paper, but not necessarily with incomes or bank accounts to match...</p>
<p>While Stanford announced its change, the “568 colleges” did not. These 28 private institutions are known by a portion of a law that allows private institutions that admit students without regard to financial need to discuss some aid policies without fear of antitrust charges being brought against them. The 568 group’s common policies are not requirements for their members — which include Ivy League institutions, top liberal arts colleges and others — but are highly influential.</p>
<p>The 568 colleges’ guidelines have changed more radically than just lowering a ceiling. Until this year, the formula was based not on home equity, but home value — up to 2.4 times family income, minus mortgage debt. That is being changed — and used for the first time in aid packages being prepared now for this fall’s freshmen — to be based on home equity, up to 1.2 times family income.</p>
<p>James Belvin Jr., director of financial aid at Duke University and chair of the Technical Committee of the 568 colleges, said that institutions that use the new approach will in effect be saving middle class families thousands of dollars each, each year the formula is used. Duke is among the institutions that have adopted the new 568 methodology.</p>
<p>As home equity calculations are becoming a differentiator among top institutions, some universities are going even further. Harvard University, which like Stanford is not a member of 568, has abandoned the idea of having any rule about home equity. “Harvard is flexible in considering home equity: ignoring it entirely in some cases and taking it into consideration in others,” said a spokesman in an e-mail.</p>
<p>Why is home equity attracting so much attention right now? “I think it’s an effort to extend up the income distribution level some of the consideration for the customers that colleges have increasingly been giving high-ability, low-income students,” said Gordon C. Winston, director of the Williams College Project on the Economics of Higher Education. Winston noted that elite private colleges have made a series of announcements in recent years, ending the need for low-income students who attend their institutions to borrow to do so.
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<p><a href="http://568group.org/membership/members.html%5B/url%5D">http://568group.org/membership/members.html</a></p>