Is Financial Aid fair?

Paying for College
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<p>The financial aid system is still structured to be based primarily on income, not assets. Basically, after the asset & income protection levels are reached, every extra $1000 of assets is going to result in an increase of EFC by $56, whereas every extra $1000 of income increases EFC by ~$450. So those “savvy” families would also need to keep their reportable income levels low, which is hard to do and maintain a high spending lifestyle. </p>

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<p>That is rare among private schools – most do take into account the value of a home, which can be very difficult for middle class earners like me (single parent, ~$45K annual income) who also live in areas where real estate values have skyrocketed. I’m “house poor” --that is, by the time I pay my mortgage, real estate taxes, and expenses for regular upkeep and maintenance… there’s not much left over. On paper the house looks like it is worth a lot, but in terms of the local market, it’s valued on the low end – so there’s no trading down. And, of course, when my d. started college, there was no possibility of tapping my equity – my income was not enough to qualify for a larger home loan. </p>

<p>So basically, a luxury home for you would have helped at a handful of heavily endowed schools, but the vast majority of private colleges would have looked at the market value of your home. </p>

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<p>Well, you could boycott the Ivy League if you felt the policies were unfair. But I think their generous aid policies were adopted in response to a problem in that they were losing the true middle class from their student demographic. If you look at figures from 8-10 years back-- when they did take into account home values and before they announced generous aid initiatives for families earning under $60K – they had very few students with families in the $40-$75K income range. They were getting very poor, Pell eligible students – and upper income students… but if you had drawn an income graph you would have seen a big dip in the middle – and that probably was not good overall for the goals of the school or for student life. Those true middle income students – (I say “true” because I mean the ones whose families really fit the middle quintile on any charting of average household incomes) – simply weren’t getting enough aid to make the Ivy’s affordable to them. </p>

<p>That’s the big difference. Leaving aside the families who may game the system, there’s a difference between “affordable” and “preferable”. Everyone would like to conserve assets, but on the lower end of the spectrum there aren’t any assets to conserve – those families are facing the prospect of borrowing, and their income determines the limits of their borrowing.</p>

<p>I don’t think families gaming the system is nearly as widespread as you think. Since financial aid information is confidential, you do need to realize that just as the neighbors may lie about their kids’ SAT scores, they may also misrepresent how much they are getting in aid. I’ve heard too many people claim their kid was getting an academic scholarship to attend Harvard to give all that much credence to what people claim they are getting in aid.</p>

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<p>Some who receive financial aid get full ride free. Its the kid whose slacked off all the years of high school and then thinks hey i should go to college to it looks fun. This leads to the epic fail in college, and bam another person ridding it out on welfare congrats government youve screwed the hard worker again</p>

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This post didn’t make any sense. Perhaps a college education would help the writing skills?</p>

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When you look at the bottom line FAFSA really isn’t that fair. Especially to middle class families. Middle class families who make anywhere from 75- 120K never qualify for financial aid based funding. In my family there are two children, and my parents are now going to be paying for both my sister and I to go to college. Lets just break this down here. For lower middle class lets say 75K a year. You add a mortgage, car payments and other typical middle class expenses, plus however many children are in college, let’s say two. At the end of the day after you are done paying these expenses, you are not in fact middle class anymore. You might as well be working class or worse. We haven’t even gone into the specifics of private vs public university tuition either. My sister is thinking about rose hulman which is easily 50K a year, add my tuition at IU which is 24K and that’s already 74K a year. We don’t qualify for ANY financial aid because our family income is too high. My parents will end up spending well over half of our household income alone on tuition. (Mind you most financial analysts don’t recommend spending more than 30% of your yearly income on housing) How is this fair? FAFSA encourages people to have more babies while NOT having adequate funds to support them well. These kinds of families have many children, and almost everyone of them go to college for “free” should they choose to. It also encourages laziness in my opinion. Many of the parents of these kinds households with many children also only have one spouse working. Because if the other spouse also works their income would not quality for FAFSA. Compare this to my family with both of my parents who work well over 50+ hrs a week (including weekends) FAFSA just like tax income just isn’t fair. My parents were never wealthy, and didn’t come from wealthy families either. They’ve worked themselves to the bone to be able to come to America, get master and ph.d degrees and support a family comfortably. Some lower class income families have absolutely 0% of this kind of drive to make their lives better for themselves. Instead they live off the government. I’ve also had friends who qualified for full ride financial aid based scholarships. Their sense of money is so warped. They always tell people, they go to college for “free.” When in fact this is absolutely not true. They may not pay a cent but the money comes from somewhere, it doesn’t just fall out of the sky. That money comes from none other than the middle and upper class families who are working their a**es off.

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Those "typical middle class expenses” are exactly what allow your parents to “support a family comfortably” (your words) - and they are also what set you apart from “working class or worse.” If you think poverty is better, you’re welcome to move pout of your comfortable home and try it for a while. I’m guessing you won’t enjoy it.

If your parents were both hard-working, frugal, and intelligent enough to emigrate to this county and get Master’s and PhD degrees, then it’s up to you and your sister to show the same intelligence and determination by selecting colleges where you will qualify for substantial merit aid. That you are unwilling to do this reflects badly on your parents, and on all the sacrifices they had to make in order for you to grow up in this country and have the opportunities that you do.

I understand that you’re frustrated and venting, but I can’t imagine that your parents would be proud of the attitude reflected in your post.

If you don’t approve of the way federal funds are allocated to low income students, then I’d suggest you take advantage of all the many opportunities available to you, get a good education, make a success of yourself, and then work you own a** off to change things!

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This thread is over 4 years old.

Two siblings in college from a family with 75k AGI and minimal assets can qualify for a partial Pell grant.

(@renoir882 Time to learn life’s not fair).

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Use old threads for research only, but do not resurrect them. Ask questions in a new discussion. Closing.