Hello! I live in a middle class divorced family who doesn’t really have much income. However, when I filled out the net price calculator for one of my top choice schools, Reed College, it said that we would have to pay $62,000 a YEAR. In reality, we’d only be able to do about $20,000 a year, and I am pretty sure we filled all of the information out correctly. I was wondering if anyone knew how accurate these calculators were?
Thanks!
For us they were always spot on accurate. However, we are not divorced, and do not own a small business. My impression is that reality is rarely better than what the NPC predicts.
Do you know why the NPC was so high? I have on occasion run “tests” with for example leaving out some asset to try to figure out which financial information was resulting in a high NPC.
Why don’t you fill out some other NPCs for schools similar in cost to Reed and see what they expect your family to pay?
Most NPCs are inaccurate in that they do not assess enough when there is a divorce situation. Most schools that use Profile as well as FAFSA and meet most need, do take into account the non Custodial parent’s finances. Stepparents financials are also included.
Reed uses the CSS Profile, including the CSS Noncustodial Profile, so both of your divorced parents’ incomes and assets are included. Assuming that you did include both of their incomes and assets in the NPC, then it may well be accurate.
Parental divorce is a major financial disadvantage in most cases. The parents may have spent your college fund on divorce lawyers, and they now have higher expenses in separate households than when they shared one household, so their ability to save for your college costs or anything else is worse now. So it should not be surprising that what they are actually able and willing to pay is significantly lower than what colleges expect them to pay.
More information: http://talk.qa.collegeconfidential.com/financial-aid-scholarships/2083835-faq-divorced-parents-financial-aid-and-net-price-calculators.html
Are you the child? Have you had a discussion with both parents about budget? Schools (most) will look at both parents’ financials , as as your EFC is 62K. they have a high income between them. Is there remarriage in the picture?
Sit down, know the budget, look at schools in budget.
Reed uses both parent incomes t calculate need based aid. Did you enter your parent income info correctly? And assets? If so, if you are $62,000 net cost…the total incomes of your parents is close to $200,000 a year…or they have huge assets too. Is that right?
Does one parent have a very large income?
The issue, we realized, is that we have high assets but low income. Is there any way to communicate this to the college?
High assets and low income will be visible to the college on FAFSA and (if used) CSS Profile.
“The issue, we realized, is that we have high assets but low income. Is there any way to communicate this to the college?”
Yes you can communicate this to colleges, but it won’t help you. As @ucbalumnus said, your assets will show up in the FAFSA and CSS profile. They will want to take a significant chunk from your assets. That is the same issue that we ran into.
We had to look for small schools that are affordable. You will very likely need to do the same thing.
Is your income below $49,999 per year?
And how high assets? Are any of these assets in IRA or TSA or other actual real retirement accounts?
Are any of the assets in real estate?
And to clarify, this number is AGI not gross. The amount after all pre-tax, insurance, retirement, etc. are taken out.
@cshell2 are you sure that doesn’t include contributions to pretax retirement accounts?
@DadTwoGirls I don’t understand how they would think it is okay to take from our assets though, as we need that for retirement, my brother’s college, and security as we have such little actual income. Would they take that into account and allow us to pay the $20,000 we can afford?
@thumper1 - Yes, positive. The Simplified Needs Test for determining whether assets are included uses AGI. Retirement contributions and other non-taxable income are then added back in for calculating the income component of the EFC.
You have to have to meet at least one other qualification for SNT though. Here is the EFC formula for 2020-2021 school year. The explanation of how to qualify for SNT is on page 4-5
https://ifap.ed.gov/efcformulaguide/attachments/2021EFCFormulaGuide.pdf
You don’t include 401K or IRA accounts or home equity in the assets.
Where are these assets? Are they in regular bank accounts or CD accounts that your parents WANT to use for retirement? OR are they in actual retirement accounts like TSA or IRA accounts? Find out.
Is your brother younger than you? You need to understand that colleges are not going to fund YOUR costs so your parents can pay in the future for another person to go to college. Likewise, if your family is using their very large assets to pay their daily living expenses, colleges are unlikely to shelter those assets for that.
But please answer…is your parent AGI less than $49,999. Is it? And do you qualify for a means tested benefit like free or reduced lunch or SNAP? Please answer this.
@cshell2 primary home equity is not included on the FAFSA, but with one or two exceptions…FAFSA only schools do not meet full need for all accepted students. Primary home equity is included on the CSS Profile. The colleges assess primary home equity in different ways…so the student would need to know how each school uses this number.
Home equity in real estate other than the primary residence IS included on the FAFSA as an asset.
We don’t know enough about where the family assets are held for this family to give decent information. But…assets will count T the CSS Profile schools…all of the assets (not money in authorized retirement accounts). For FAFSA, we would need to know the AGI and other info to help determine if the assets would be included…or not.
Read this thread. It talks about both auto $0 EFC and the simplified needs test…assets are not included if you qualify for these…for the FAFSA. But do keep in mind…there are no huge financial aid awards attached to these. These are for federally funded aid only…so you would be guaranteed the $5500 Direct Loan, and whatever portion of the Pell Grant you were entitled to…which might not be much depending on your income!
Here is the thread to read:
A few weeks ago you said your mom earns $75k. That makes you eligible for free tuition at the SUNYs (through the Excelsior Grant). Since you’re in NYC there should be schools that you can commute to, so make sure to apply to some safeties.
Do you know your dad’s income? Private schools will consider both parents’ income and assets.
Since we were talking about FAFSA rules for the SNT I was in the “FAFSA” thinking mode. Should have put a disclaimer for CSS. I forget about it as none of the schools we are considering are CSS even the two private schools we applied to with 50-60K price tags are FAFSA only.
eta: Some schools do aid beyond just a Pell grant and Stafford loans based on FAFSA. We’ve qualified for state and institutional grants as well. Or at least we were TOLD we will on the NPC. That’s yet to be seen I guess.
@cshell2 some schools and states use the financial data from the fafsa to determine awarding of their institutional need based aid.
But the fafsa itself is used to determine eligibility for federally funded need based aid…Pell, SEOG, federal work study, subsidized loans.
So far as I know, the only fafsa only school that guarantees to meet full need for all and with their institutional funds…is University of Chicago.
@thumper1 - Not meaning to sidetrack more, but for the schools that don’t meet 100% of need for all students, how do they decide who gets full need? Is it based on academics or just “until the money runs out”? University of St. Thomas and St. Mary’s University (both in MN), both met full need for us (on the NPC anyhow). We can’t do CSS schools because of an ex that makes too much, but won’t help at all.