Let's pool our experiences to add some financial transparency to this college process

As I stated in the original post, no financial info from UVM and UNH yet. Will post as available.

I was told 5% of home equity per year is part of the 40k offer before loan from Northeastern.

“Spoke with financial aid officer who said our home equity really hurt us. Research revealed Northeastern expects parents to use 5% of home equity per year.”

If your kid could get into the most fancy deep pocket school (like HYPSM and a few others) your home equity is completely ignored. Google up about how NYC Mayor Bill DiBlasio’s kid gets financial aid at Yale even though the parents own two Brooklyn properties worth a combined $3 million (and which currently generate rental income as the family lives for free in Gracie Mansion). One big reason why the HYPSM need-based awards are usually the fattest.

Your highest fancy schools (Duke, Penn) unfortunately consider home equity in their formulas. But they don’t hit it as hard as NE does. Schools at the NE level usually have thinner need-based aid formulas since they give out so much merit aid. This list would have helped you:

http://www.thecollegesolution.com/will-your-home-equity-hurt-financial-aid-chances/

Rule of thumb. The higher you go, the better the need aid gets. The lower you go, the better the merit aid gets.

They could state how they arrive, specifically with mathematical formulas, at each student’s expected cost for starters. They could also post what percentage get into honors or and qualify for honors related scholarships (ie: top 10% of application class). They could state what they expect for the rise in costs over the life of your child’s attendance. I could go on…

@KLSD: thanks for sharing that info. Much appreciated.

UVM/UNH safeties.

If you spend enough time researching, yes, you will know the answers to those questions:
https://www.forbes.com/sites/troyonink/2017/01/08/2017-guide-to-college-financial-aid-the-fafsa-and-css-profile/#3f6c61424cd4
https://www.nytimes.com/2014/04/13/education/edlife/what-you-dont-know-about-financial-aid-but-should.html
http://www.thecollegesolution.com/schools-that-meet-100-of-financial-need-2/ (this list is out of date)

I.e. you have determined that the student will be admitted for sure and that they will be affordable for sure?

https://www.road2college.com/thinking-about-how-to-pay-for-college/

Chipperd – would this one page graphic have helped you figure out where you stood?

While you can do the NPC at every school, a glance at this is pretty good at telling you if you will/will not be in the need-based fin aid money at various types of schools.

That’s a CSS thing, not a FAFSA thing. FAFSA schools (there are a few exceptions) grant the award and then there is a gap. Where that money comes from is up to you. CSS schools can do whatever they want with their own money and if they want you to pay 5% of your equity, that’s up to them.

Things change all the time. Just this week, in the 8th and final semester of figuring out the FA at my daughter’s school, I learned that her Bright Futures scholarship is only good for 120 credits. She needs 130 to graduate, so the final 10 we have to pay for in full or have covered in another way. Surprise, no soup for you!

@chipperd - The folks in the Financial Aid Forum are well aware of the home equity thing. Have you spent much time reading the threads there? Yup each place can have its own formula, but if you contact the financial aid offices, and ask them nicely, many will talk you through theirs.

If your kid’s offers aren’t going to work for your family, then give the kid a gap year, and come up with a new list. Now that you are getting real about affordability, I expect your kid would have much better options a year from now.

Chipperd –

When you ask for “transparency” I think what you are asking for is that the school explain how the formula works.

While you can run the NPC at each place and see what number spits out, I agree that you may not understand how things are working behind the curtain. Which makes it harder to find the places where there’s going to be a financial fit. Recognizing that financial fit also has to bake in your kid’s academic chops (where kid can they get in; where kid can get merit aid).

I think you are asking each school to explain it as simply as Harvard does (see below). Unfortunately, not every school has a formula as simple as uber-bucks Harvard does.

 20% of our parents have total incomes less than $65,000 and are not expected to contribute.

 Families with incomes between $65,000 and $150,000 will contribute from 0-10% of their 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.

 Home equity and retirement assets are not considered in our assessment of financial need.

@chipperd There is a lot out there about how colleges arrive at using home equity. Here is one good article about it.
http://www.thecollegesolution.com/will-your-home-equity-hurt-financial-aid-chances/ Also with the new tax laws, here is another good article, https://www.nytimes.com/2018/01/12/your-money/home-equity-college.html Paula Bishop referrred to in the article is excellent at some of the questions you raise so I recommend getting her spread sheet listed in the article.

Other good resources are the common data set for each college which will give you a break down of need met and whether they will ge consistent from year to year with aid, the website CollegeNavigator which when you click on the net price tab will break down by income what you can expect in aid (very shocking sometimes) and college data which has good info under the money matters tab.

I also recommend Lynn O’Shaughnessy’s book, website and her online class. I have taken it twice and it has lead to my children attending affordable colleges with no loans that they both loved. The college search always starts with affordability and then after figuring out what you can afford, does your child develop their list and apply only to affordable colleges. It causes no surprises and no disappointments later on.

If your child doesn’t really have any affordable options, then I recommend a gap year and reapplying the following year in a smarter, more affordable option. I have had my student do that if they are in a similar way and the second results are much better.

Also go to the website collegedata.com and click on the money tab for each college on your list. You will see the breakdown of scholarships and those with need versus no-need. 586 freshmen with no need receive merit scholarships and the average scholarship is $19,689 at Northeastern. 1251 of freshmen who have financial need will receive aid and the average award is $34K. Obviously this tells you that Northeastern is not generous and that students typically will not get enough aid to attend and need to find money from other sources. You will also see how those numbers are in subsequent years. If a college guarantees a merit scholarship at a certain level, you have a better idea but if the college doesn’t give a solid line for who gets money and who doesn’t, then you don’t really know past general language. Colleges use merit as recruitment tools and their need for particular students varies from year to year (could be based on type of major, geographic location or gender).

I think we can all agree that there is not much transparency in merit aid. For many of us who have high EFCs the hunt is really for merit. And outside of a few examples, it is very difficult to know in advance how much merit your child will qualify for at a given school in a given year.

As to “lack of financial transparency,” that equation was clarified for us early by our son’s boarding school where we were expected to contribute every single liquidable dollar from every asset and account we owned — all cash and non-retirement savings (retirement accounts exempt, but we were no longer able to put any money toward retirement or 529 during his BS years), home equity, property, and any money going toward any type of luxury good (which we didn’t have). If we felt the EFC was too high, the school offered a loan program to fill the gap. If there was true, demonstrated need, the school would fill that gap with aid. Given that we were expected to be full pay for a fancy boarding school, we knew there would be no aid for any college in the same cost neighborhood, but we had a 529 for those expenses. In the end, we chose to live paycheck to paycheck for high school, but our son chose the military for college, so it all evened out. We understood boarding school to be a luxury and a choice, so the boarding school’s contribution rules seemed clear and fair enough. We just had to decide if it would be worth every last available dollar to send him there. When it came time to discuss college with the BS, the same FA eligibility rules applied.

So, from everything I’ve read and been through with our son’s high school and college journey, it seems that you need to be willing to contribute everything you’ve got to educate your kids with the “everything you’ve got” part determining which colleges become affordable/unaffordable for you without loans. Students can be well-educated at many price points in the U.S., but figuring out the point at which you qualify for non-merit aid seems to match the point at which all current liquidable assets have been exhausted.

@twoinanddone : “CSS schools can do whatever they want with their own money and if they want you to pay 5% of your equity, that’s up to them.”
Exactly where my frustration lies. I am reading responses and hearing reading all that I am referred to, here and from others, I speak with, and nothing out there tells you how to figure out how much college will cost even close to what you probably will wind up paying. This makes it really hard to plan where there could be tens of thousands of dollars variance in your overall family’s financial plan.

@northwesty Yes! exactly what I am trying to get across when I say transparency. Thanks for that!

@CValle : Yes!

@itsv: Yup, agreed. It does start with affordability, which brings me back to my point. How to figure out what each college will cost up front before considering. Much like shopping for any other service or durable good. Just can 't do this with something so costly. That’s the frustration I have. IMHO one shouldn’t have to pay for/sign up for classes just to figure out how there are going to spend potentially upwards of 300K+ to educate three kids.