Massive Differences in Financial Aid, Colleges that don't Include Home Equity, Princeton & Smith Win

Paying for College
1

I ran the following financial aid calculations for a rough determination of how much each parent would contribute to my D’s college education. In each case, I went to the specific college website to the NPC calculator. The data input was the same for Parent 1 and Parent 2 for each college. I understand each college calculates aid differently but I admit I’m surprised by the differences!

I’m not asking for advice as to how much each parent should contribute as we’ve got that covered. Between our two households, we will be a full-pay family, not to mention I didn’t include assets (aside from Home Equity) in my calculations. I simply thought this information might be of interest to other members of the CC community.

*Please note, the totals below do NOT include a campus job or loans. I noted those amounts at the bottom of each college so that you can deduct those from the family cost if that’s helpful. Colleges without loans made up the difference in institutional grants.

My conclusions are as follows:

  1. Wellesley is known for its strong financial aid but in each scenario below, Smith emerges with a significantly better aid package.
  2. Smith, Georgetown, Princeton, and Amherst do not include home equity when calculating financial aid.
  3. Princeton is, hands down, the least expensive option in every scenario, followed by Smith.
  4. Brown is significantly more expensive for families with high home equity. Regardless of income level, approximately $1,200 to $1,700 is added for every $50,000 in home equity. I ran additional scenarios in addition to the ones below to confirm this. I also emailed the financial aid office at Brown because the difference in family contribution is so significant for Parent 1.
  5. I understand other factors are at play in determining aid such as parental age, length of home ownership and a host of other factors. However, I found this to be an interesting apples-to-apples comparison when entering exactly the same data for Parent 1 and Parent 2 into the NPC calculators.

Parent 1:
Same age as Parent 2
Home purchased in same year (2010) as Parent 2
$450,000 in Home Equity (HEQ)
Less income but more equity than Parent 2
Investments, cash, assets, other expenses, valued at $0 for purposes of calculation

Parent 2:
$150,000 in Home Equity (HEQ)
Higher income but less equity than Parent 1
Investments, cash, assets, other expenses, valued at $0 for purposes of calculation

Lowest to Highest Cost for Parent 1 with $450,000 HEQ:
$11,400 Princeton
$13,317 Smith
$20,600 Amherst
$23,088 Haverford
$24,412 Georgetown
$25,565 Wellesley
$27,374 Wake Forest
$43,668 Brown

Lowest to Highest Cost for Parent 1 without HEQ:
$11,400 Princeton
$13,317 Smith
$16,514 Wake Forest
$19,397 Haverford
$20,600 Amherst
$21,705 Wellesley
$24,412 Georgetown
$28,651 Brown

Lowest to Highest Cost for Parent 2 with $150,000 HEQ:
$37,600 Princeton
$53,045 Smith
$57,557 Haverford
$57,750 Amherst
$60,301 Wake Forest
$60,403 Wellesley
$62,534 Brown
$62,587 Georgetown

Lowest to Highest Cost for Parent 2 without HEQ:
$37,600 Princeton
$53,045 Smith
$52,795 Wake Forest
$53,068 Wellesley
$53,701 Haverford
$57,750 Amherst
$59,003 Brown
$62,587 Georgetown

SMITH COLLEGE
Parent 1:
$13,317 with HEQ
$13,317 w/o HEQ
Parent 2:
$53,045 with HEQ
$53,045 w/o HEQ
*Home equity difference of zero in aid.
*Student loan of $3,500 and campus job of $2,450 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

WELLESLEY COLLEGE
Parent 1:
$25,565 with HEQ
$21,705 w/o HEQ
Parent 2:
$60,403 with HEQ
$53,068 w/o HEQ
*Parent 1: $3,860 difference in aid = $429 per 50k in HEQ
*Parent 2: $7,335 difference in aid = $2,445 per 50k in HEQ
*Student loan of $3,000 and campus job of $2,100 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

AMHERST COLLEGE
Parent 1:
$20,600 with HEQ
$20,600 w/o HEQ
Parent 2:
$57,750 with HEQ
$57,750 w/o HEQ
*Home equity difference of zero in aid.
*Campus job of $2,200 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

HAVERFORD COLLEGE
Parent 1:
$23,088 with HEQ
$19,397 w/o HEQ
Parent 2:
$57,557 with HEQ
$53,701 w/o HEQ
*Parent 1: $3,691 difference in aid = $410 per 50k in HEQ
*Parent 2: $3,856 difference in aid = $1,285 per 50k in HEQ
*Student loan of $3,500 and campus job of $3,000 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

PRINCETON UNIVERSITY
Parent 1:
$11,400 with HEQ
$11,400 w/o HEQ
Parent 2:
$37,600 with HEQ
$37,600 w/o HEQ
*Home equity difference of zero in aid
*Campus job of $2,900 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

GEORGETOWN UNIVERSITY
Parent 1:
$24,412 with HEQ
$24,412 w/o HEQ
Parent 2:
$62,587 with HEQ
$62,587 w/o HEQ
*Home equity difference of zero in aid.
*Student loan of $3,500 and campus job of $3,000 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

WAKE FOREST UNIVERSITY
Parent 1:
$27,374 with HEQ
$16,514 w/o HEQ
Parent 2:
$60,301 with HEQ
$52,795 w/o HEQ
*Parent 1: $10,860 difference in aid = $1,207 per 50k in HEQ
*Parent 2: $7,506 difference in aid = $2,502 per 50k in HEQ
*Student loan of $3,500 and campus job of $2,000 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

BROWN UNIVERSITY
Parent 1:
$43,668 with HEQ
$28,651 w/o HEQ
Parent 2:
$62,534 with HEQ
$59,003 w/o HEQ
*Parent 1: $15,017 difference in aid = $1,668 per 50k in HEQ
*Parent 2: $3,531 difference in aid = $1,177 per 50k in HEQ
*Campus job of $2,950 can be deducted from totals. Remainder of aid is in the form of an institutional grant.

2

This assumes divorced parents who are cooperative with financial aid forms and paying?

3

@ucbalumnus
You’re correct. Our divorce agreement spells out how it’s paid which is 2/3 and 1/3 — roughly equal to the calculations above. We have saved for our D’s education and we don’t qualify for aid. But we agreed to run these calculations to see if the agreed upon 2/3 and 1/3 was accurate. I posted this to show the differences in aid, with and without home equity. I found it really interesting.

I still don’t understand Brown’s determination, especially for Parent 1. All I can conclude is that their aid packages must be better than what the NPC indicates because they’re so much more expensive than other colleges.

4

@GoldPenn

This is not a surprise. The variation in actual net costs and aid amongst schools that meet full need can be very very large…like $20,000 or more difference.

As you noted, home equity is one variable that makes a difference.

In your case, you are full pay and anticipated that. But for others…this is why conventional wisdom is to cast a wide net if financial aid is a serious consideration.

5

At least you have cooperation on this subject and ability/willingness to pay, unlike many divorced parents.

6

Our NPC results for the schools on your list that have also been on our kid’s, from lowest to highest:

Haverford
Amherst
Wellesley
Smith
Brown

7

On a positive note, if your kid chooses to apply to Smith, the cost is less, they have a decent admit rate compared to the other schools mentioned and she can take classes at Amherst since Smith is part of the Five College Consortium $-)

8

This is an apples to apples comparison of home equity only right? You put earned income of zero for both parents?

9

@suzyQ7
It’s apples to apples for each parent, meaning for Parent 1, I input the income and then ran the calculation with home equity and without home equity.
Parent 2 has higher income but less home equity. I input the income and then ran it with and without home equity.
Hope that makes sense! Feel free to private message me if not.

10

@GoldPenn

Since the parents are divorced…I would view those net price calculators with caution. They might not be as accurate as you are getting. The only exception would be if the NPC actually has an option for divorced parents, and asks for income and assets for each parent separately…including primary home equity. If not…view with caution.

Also, some schools ask for the non-custodial parent information…but they use it in their own ways. Some use only the bio parents, for example, in terms of income and assets. Some use only the custodial parent and spouse.

Others use everyone.

To anyone else reading this…be sure you include the spouses if either of the parents are married.

11

Also remember that most schools use home equity as a multiplier or percentage of income. Some schools use 1x, 1.5x 2x of income or all of the equity. So tossing out a equity number with no context is meaningless. You would be better off saying
Smith uses home equity as 1x your income, etc

12

Yes, check the school’s financial aid pages to see if it has specific instructions on using the net price calculator with divorced parents, or ask the school directly if such instructions are not given.

13

@ucbalumnus
@thumper1
What I was really trying to point out are the differences in aid packages with identical information entered. I believe one of you pointed out that home equity is treated differently by Brown which is why there’s a big variance. I did not select divorced or separated parents when running these calculations as I wanted to keep it simple.