Keep in mind that EFC is an indicator of relative financial strength. It’s not what parents are expected to pay … in fact, it’s typically less than what parents will need to pay to send their kid to school. For more well off families, there will be schools that cost less than the EFC. For the majority of families, though, even a state directional school will cost more than the EFC. What this means is that the EFC calculation is not the problem. The problem is that college is expensive, and financial aid doesn’t cover enough of the cost for many families to make it possible to attend.
There are a lot of families on CC that can and do pay for school without borrowing. However, as a former financial aid professional, I can tell you that the percentage of parents who are in such a position is actually very small. I definitely saw families that spent a LOT on travel sports, dance teams and the like over the years, and they often did it instead of saving for college. But the vast majority of families I saw had low EFC but the difference between Cost of Attendance and EFC was large. If you think that it’s tough to afford school when you receive aid that bridges the gap between COA and EFC, just imagine how tough it is when the gap doesn’t even come close to being bridged.
If you think that you cannot beat them, you can join them by changing to a much lower paying job and giving away all of your money and assets to your favorite charities two years before your kid starts college. Then you can be poor for college financial aid purposes.
As a practical matter, most students from poor families, if they go to college at all, are highly constrained by cost limitations (often limited to commuting to the cheapest local college), since relatively few colleges have need-based financial aid that gives full rides including residential living expenses. Few students from poor families get admitted to those few colleges that do offer that much financial aid.
Those families who receive full need-based financial aid will almost always be worse off financially than families who receive no or little financial aid, even after the cost of college has been taken into account.
Colleges aren’t asking you to sell your house. Some colleges (typically the most well endowed and highly selective) may ignore the home equity if it’s your primary home. Many others calculate your EFC based on the home equity because they expect you to borrow against that equity. They may cap how much you can borrow based on your incomes. The rational for treating home equity this way is to avoid the potential moral hazard of families with college-age kids transforming all their savings into large amounts of equities in expensive houses.
I do not recommend the above strategy! But I do see some irony in the way that many people view college as a path to the highest paying career possible and then seem frustrated when their high salary prices their children out of receiving need-based aid. The reality is that there are so many disadvantages of having a low-income (in life and in the college admissions process) that I don’t think anyone would really choose to be poor in order to potentially get a full-ride at one of the handful of colleges that provide need based aid. It seems little different than wishing one could become black out of some belief that it will help your kid get admitted to college. To be clear, I am not claiming that Techno13 expressed either of those sentiments, but I do occasionally see posts on CC that lean towards a “woe is me, if only I made less money, my kid would be better off” attitude. It is not that hard to become poor --just start working at minimum wage job and give away your assets. Unfortunately it is very hard to be poor so most people don’t think the very unlikely shot at a full-ride is worth it.
As far as I can tell, in the entire country, there are no more than 25 colleges that offer full-need packages without expecting at least some students to borrow. There are maybe another 15 that don’t expect loans for family households under a certain income level. All other meets-need fully schools (an additional 35 schools) expect even low-income students to take out loans.
Thank you for pointing out I did not express those sentiments. I was referring the systems that has forgotten the ‘donut hole’ families when it comes to affording college (as discussed in the post I was replying to).