<p>Is this just specific to Stanford or are all of the 568 members reducing the home equity cap?</p>
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I thought it was interesting to read the comment from the Princeton financial aid person pointing out that Princeton had already done something similar but the announcement had been "lost" behind the news of Princeton's no-loans-for-low income kids. Of course, middle income kids are the ones who get socked with loans, especially at schools like Princeton that have done away with them if you fall below a certain family income level.
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Princeton has done away with student loans for ALL their students.</p>
<p>Janesmom, Stanford is not a 568 school. Most of the discussion above concerns 568's - the article referenced discussed both. I believe Stanford says it is going to cap home equity at 1.5x income -- like the 568's, it won't subtract out mortgage debt. </p>
<p>I thought mom365's comments about other costs to consider are important -- they include questions I never thought to ask but which could make a big difference. My daughter's college charges NOTHING for the basic health coverage that all students get -- I am sure that probably some part of the $680/semester "comprehensive fee" covers on-campus health services -- but there are other things that come out of that fee as well - and the fee is part of the cost of attendance considered in the financial aid award, rather than a separate bill or offer we get. The college also offers an extended policy which they recommend for students who do not have other insurance -- which cost around $150 a year. I ended up buying that coverage and then raising the deductible on my daughter's regular policy, which of course is saving me on premiums --so it definitely is a good deal for us. </p>
<p>My d. is also applying to her college for funding for a summer internship. So I guess we got lucky -- but these are good questions for parents to be asking, whether or not their kids qualify for financial aid.</p>
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But why would they want to? (and I mean middle and upper-middle income folks - $40k-$95k). I don't see any incentive for them to do so
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Well, I'd argue that is the demographic that has the smartest students ;) -- but of course I've got a bias. I do think that many of these middle class students on financial aid are more disciplined and serious about their studies - simply because with loans and work-study and parents who are strapped to the max meeting the EFC, they can't afford to mess up in school. They aren't going to have the money to make up a semester if the fall behind, and they can't afford to let their grades slip and risk losing financial aid.</p>
<p>I agree calmom. ;-) Also, will add the fact that more students whose families are in this income bracket and own a home, will not hesitate to apply.</p>
<p>bethievt, I'm right with you on your post #18, and re-read it several times in relation to mini's post#17 above it. If mini's serious there, my jaw is still dropping.</p>
<p>Look, I don't want to sound all crunchy granola here, but I hold some ideals after all these years. I can't believe that every decision on campus is ruled and measured by money. Diversity is its own value. Middle-class families include earners with professions such as these: schoolteacher, police, clergy, civil servant, sole proprietor business, nurse. It will benefit students whose parents are either desperately poor or fabulously wealthy to meet more kids whose families perform these functions in their communities. It's just another story to tell.
The child of a prominent judge has one set of experiences, but would benefit greatly to room with the child of a policewoman and hear how their evenings normally proceed at home. The 6-figure-earning doctor's child might learn a lot from meeting the nurse at a parent's weekend.
If a child comes from hard-scrabble poverty, it might be more reassuring to meet more kids from the next tier up than always have dazzling wealth in their face. They want upward social mobility, which might turn out to be a profession they perceive as helpful (in the sense of community service) rather than strictly dollar-producing. How can we presume?
Diversity is educational for students, and that sentence I just wrote is so obvious I can't believe I'm needing to even write it. Middle class homes are the peanut butter between the upper and lower pieces of bread, and might help unify a campus socially. Perhaps we'll find out some surprising bits of data, over the long-term, in terms of various at-risk behaviors where the middle class might not engage in them as much? Who knows what we'll find until more arrive and unpack their unmatched luggage.</p>
<p>I'm perfectly serious (and I am right in the middle of that group, with my income being at the 67th percentile). And the proof is in the data. There just aren't that many of us at many of these schools (and of those who are, the bulk are athletes and recruited URMs). Here, they've designed a financial aid policy (yet another one) that will benefit those in the top quintile (as Calmom notes so well), but has virtually no effect on most middle and upper-middle quintile folks. </p>
<p>But even if it did, most are just not getting in, and there are reasons for that.</p>
<p>Princeton has indeed done away with loans. Ask who the majority of the beneficiaries are.</p>
<p>(Calmom - my bias is the same as yours, but my alma mater thinks it better to use my measly alumni contribution to subsidize the millionaire's kid. But, hey, I don't run the place.)</p>
<p>Mini, I'm trying so hard to understand your point of view, since I'm sure you've got the financial aspect analyzed well.</p>
<p>When you wrote, "But even if it did, most are just not getting in, and there are reasons for that."</p>
<p>What do you think are the reasons?
1. Are such kids not applying (discouraged by financial indicators)
2. When applying, not getting the nod from the AdComs because their applications sound "blah" even where the schools are "need-blind"?
3. When admitted, not able to handle the finaid package they receive?
4. Shock and awe, a failure of nerve...</p>
<p>What is it?</p>
<p>It's okay if you don't know. Actually it's up to the colleges themselves to figure it out, but I'm just wondering if you have a hunch, or data on WHY?</p>
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Princeton has indeed done away with loans. Ask who the majority of the beneficiaries are.
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</p>
<p>I am. As are roughly 681 (55%) of my peers in the Class of 2010.</p>
<p>I think Mini is correct that the overall enrollment figures for the middle income students are dismal --- but I'm not sure that I would agree with him as to the intent that leads to that result. (I am using "middle" literally here - not to reflect lifestyle but to reflect family earnings). For one thing, I don't know what the percentage of middle income applicants are in relation to the overall applicant pool; and I don't know what the yield is for students in that group who are admitted. The problem is that once the EFC starts to exceed costs of attendance at an in-state public, it can be hard to justify attending the private college. </p>
<p>There are a number of admissions practices that do work to favor the well-to-do, ED being the most obvious. Heavy reliance on SAT scores is another factor. Most of the middle income students are coming from public schools where intense test prep is simply not part of the school culture. Although I was being somewhat facetious about my "smartest students" </p>
<p>But when my kids applied to colleges, I saw no evidence of any sort of discrimination. Maybe my kids were just lucky, but I think that the actual admissions decision is probably handled fairly -- its just that there are not all that many slots in each class open to the unhooked RD applicants, and upper income students probably apply to the elites in far greater numbers.</p>
<p>Mini</p>
<p>You might be right, but where are you getting your numbers. To me, it seems plausible that kids in that solidly middle class income range are less likely to apply to elite schools and, if they get in, less likely to attend because they discover the financial aid package is inadequate. If that piece gets fixed (and I understand that the recent changes dod't really fix it for that income bracket) I would expect more would apply and more would attend if accepted. If the schools aren't discriminating against low-income folks, why would they discriminate against the middle class? Again, I'm not saying you're wrong, because I don't have the numbers, just anecdotal <em>evidence</em>, including the <em>fact</em> that a big percentage of CC posters say they're middle class and are sending their kids to elite colleges.</p>
<p>Wouldn't it be great if the common data set broke down applicants and admits by financial indicators as well. I'm at a loss to understand the notion of "need-blind" when admissions knows where an applicant lives, where they went to high school, what their parents do for a living and where they were educated. They're under pressure to get more Pell grant students while maintaining enough full pay customers that the endowment can continue growing robustly. That the middle class gets squeezed out in that process comes as no surprise. Maybe I'm being overly cynical, but it's amazing how the percentage of students needing financial aid stays so steady each year at a given school.</p>
<p>OK, Mini, who ARE the beneficiaries of Princeton's policy of doing away with loans?</p>
<p>I've wondered about this policy - has it merely shifted ALL the burden onto the parents (at least in the case of the middle class) so that a student in the past who borrowed $15 to 20,000 now has parents borrowing that? Parents must still meet the family contribution. Does the policy mean that Princeton does not administer Stafford loans and parents turn to the more expensive PLUS loans (or home equity)?</p>
<p>I'm not saying it's a bad idea to shift the burden to the parents (we can always escape the debt by dying), I just wonder if there's more to this than is revealed by a press release.</p>
<p>"OK, Mini, who ARE the beneficiaries of Princeton's policy of doing away with loans?"</p>
<p>According to Princeton's own data, the majority of the beneficiaries come from families with incomes between $100k-$160k. There is good reason for this - this is the group of potential customers they are most likely to lose to "merit aid" schools like Emory and Vanderbilt, etc. Now, for a measly $2k-$4k expense, mom can boast, "My kid is going to Princeton on a scholarship!" They make it back in tuition/room and board increases - 19.6% increase in room and board this year. </p>
<p>"They're under pressure to get more Pell grant students while maintaining enough full pay customers that the endowment can continue growing robustly. That the middle class gets squeezed out in that process comes as no surprise. Maybe I'm being overly cynical, but it's amazing how the percentage of students needing financial aid stays so steady each year at a given school."</p>
<p>It's amazing from our perspectives, but from the school's, hardly. These folks are professionals with decades of experience, and lots of training in "enrollment management" behind them. They know what they are doing, and nothing is left to chance. If you see more than half the student body coming from the top 3% of the population, and the median income of these is $250k+, it is because that is the way they like it. (Can't say I blame 'em.)</p>
<p>For the majority of these schools, there are fewer Pell Grant students than 15 years ago (or at least there were in 2004, the last year for which Mortenson has data.) </p>
<p>"If the schools aren't discriminating against low-income folks, why would they discriminate against the middle class?"</p>
<p>Answered in previous post. (#13) And it doesn't have to be discrimination only in the decisionmaking process itself. The best way to discriminate is in recruiting practices.</p>
<p>*ccording to Princeton's own data, the majority of the beneficiaries come from families with incomes between $100k-$160k. *</p>
<p>sounds like the middle class to me
two income families
that could be two public school teachers/policemen any number of careers.</p>
<p>lefthandofdog...
The loans aren't shifted anywhere. A Princeton student can still use use federal loans if they want, but few need to do so. USN&WR says 26% of students recently graduated with debt, averaging $4370. An admissions officer told me that much of this was a result of students borrowing to meet the higher cost of joining eating clubs. The financial aid policy was recently changed to pay the average eating club meal plan amount with scholarship.</p>
<p>danas - that amount of debt is very low, especially considering the policy is just going into effect, so the students USNWR is reporting on weren't beneficiaries of the no loan policy at any point in their careers. It's much less than the maximum amount students can borrow as undergrads from the Stafford program.</p>
<p>Not that it will ever happen, but I'd like to see USNWR list the average debt parents take on for their children to attend each school. Especially for the middle class, a college can choose to eliminate student debt (a nice thing) but it doesn't mean the parents aren't still taking on heavy loans as most find the EFC to be more than they can manage out of pocket.</p>
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Not that it will ever happen, but I'd like to see USNWR list the average debt parents take on for their children to attend each school. Especially for the middle class, a college can choose to eliminate student debt (a nice thing) but it doesn't mean the parents aren't still taking on heavy loans as most find the EFC to be more than they can manage out of pocket.
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Absolutely! There's no way we can afford our EFC without PLUS loans. We are taking on significant debt for college, and our son is using Stafford loans.</p>
<p>I agree at bottom with Mini's perspective re college's self-interest in targeting middle-income students for financial relief, but might spin it slightly differently: ADcoms at selective schools see the middle income bands of their admitted classes over the past decade shrinking (both the yields of middle income students and their numbers as a percentage of the incoming classes). Those middle-income band students are just as qualified as the higher and lower income kids, so, in effect, they're admitting less qualified classes than they might if they could recapture some of those kids.</p>
<p>Footnote to another strand of the thread:</p>
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I'd like to see USNWR list the average debt
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USNWR publishes the average debt for the latest graduating classes for each school. I don't think it appears in in the print edition, but is available in the on-line version.</p>
<p>But doesn't USNWR only list students' debt? Families might in fact owe more, since most students can't borrow beyond the Stafford limits while families can tap into PLUS loans, home equity, credit cards, etc. To report only the students' debt hides the true amount of borrowing that goes on.</p>