Hi all - Last August, I ran and printed out NPCs for various colleges, which at the time were pegged to the 2017-18 school year. I’ve probably went back and looked at some of them on occasion over the last six months, but nothing systematic or specifically intended as an update once NPCs rolled over to the 2018-19 school year (the year my D will be entering as a freshman). In fact, when I ran them in August, I wasn’t really paying attention to the school year listed at the top as I was still pretty early in info gathering and then our family got overtaken with life and the app process.
In any event, I went back last night to look at numbers, and I’d say pretty consistently across the board our EFC off of the NPCs for various schools increased by $5000-$6000. The amount of EFC increase was materially greater than the COA increases for the schools. All of the numbers in the NPC were exactly the same as the numbers I used last August.
So, it appears to me the formula most of the schools are now using for 2018-19 must be resulting in higher expected EFC for us than the formula used in 2017-18, with the resulting increase in EFC materially outstripping increases in COA.
Is this typical? I guess I suspect it is, and it is hardly stunning given the state of affairs in paying for college that each year families are expected to pay materially more even if their financial circumstances don’t change and the increase in EFC is not somehow pegged/calibrated to actual year-over-year increase in COA. It is what it is and we’ll proceed accordingly, but I made a kinda dumb mistake, quite obvious in hindsight, in forming an EFC mindset around the numbers spit out by NPCs last August and not anticipating how much the 2017-18 EFC might change into going into 2018-19.
The NPC’s don’t calculate an EFC, they calculate what aid you can expect to receive. It may be that even if your EFC for the 2017-18 year was say $10k, and your (FAFSA) calculated EFC for 2018-19 is still $10k, the cost of the school has risen for 2018-19 but the financial aid available from the school is the same as the prior year. The school expects you to pay the increase.
Sometimes FA doesn’t increase with the COA. Pell grants remained the same for 2017-18 and 2018-19. Maximum direct loan amounts have remain the same ($5500 for freshmen) for years. Very few COA s remained the same, so that increase has to be made up somewhere.
What I found when running the NPCs from year to year was the tuition and COA were usually a year (or more) old, that merit aid might not have been increase, that Pell or state grants were out of date. At the school my daughter attends, they never announce the tuition increases until June, and they send the bills in July. The tuition in the NPC was really two years old. If I printed out an NPC report from her senior year and one from her freshman year, all the awards were the same, but the COA on the second was was several thousand higher because of increase in tuition, room and board with no increases in merit award, state merit award, or federal loans and grants. It’s not the FAFSA EFC that is increasing, it’s the uncovered gap that is growing.
Thanks twoinanddone! That makes sense and provides clarity that using the FAFSA “EFC” term in the NPC context is apples and oranges.
I am going to do a more thorough dive tonight if I have time, but let frame my thought process a different way and see what you think:
Assume the college being run on the NPC is one that says they meet full demonstrated need. I am processing that as follows:
They use the financial info we enter in the NPC to calculate what they expect us to pay (what I was calling their “EFC” for us base don their school-specific formula). They subtract that “EFC” from their COA. The difference (“the gap”) is demonstrated need for that college. They then reflect the anticipated mix of grants, loans, work study, etc. that will provide the demonstrated need amount.
If I run the NPC for that same, “we meet full demonstrated need” college two years in a row using the exact same financial info, and they say that we need to pay $5000 more in year 2 than in year 1, isn’t that the equivalent in the above scenario to saying our “EFC” has gone up by $5000 and thus mean they adjusted their “EFC” formula to our detriment? Otherwise, if the “EFC” was the same both years b/c they were using the same formula applied to the same financial inputs, wouldn’t the NPC reflect that our estimated net price was the same for both year 1 and year 2, but the amount of grant, loan,work study, etc. would have increased to soak up the increased COA between years 1 and 2 (to meet full demonstrated need but leave our net price the same)?
I am sure I am conceptualizing it incorrectly, and help is appreciated!
At a ‘meets full need’ college, yes, financial aid should go up as costs increase, assuming your basic financial situation is the same. In that case you are right that the school’s formula might have changed. It also may be that any increase you had in salary put you in the next bracket. They previously expected you to pay 10% of income as an 'EFC ’ but now you are making enough to put you in the bracket they expect to pay 15%.
I think the NPCs for those meet full needs schools might not be updated as quickly as you need them to be. You can call the school and ask.
For the 2017/18 year calculator you would have used 2015 income and for the 2018/19 year calculator the 2016 income, there is no difference between those two years in income or assets?
Even at full need schools there is an increase in the cost of attendance, students can borrow more in federal loans, your famiky’s Income may increase ever so slightly moving you from one bracket to another and the student contribution from summer earnings increase each year. All of these factors will change your NPCs year over year.
Schools update their NPCs for the next incoming class…and yes, financial,aid formulas, costs of attendance and the policies of awarding aid DO sometimes change from year to year.
If you were originally using NPCs for 2017-2018, but your kid is going to college in 2018-2019, it’s no surprise that there could be a difference in your net cost.
The net price calculators should be viewed as an estimate only. The more questions the NPC asks the more likely it is to be closer to your actual net costs when you get your actual financial aid award.
The biggest mistake folks make…they use the previous year NPC…with that year’s income…and their current assets. Then when the time comes and they complete the right FAFSA and Profile…the info has changed.
In addition, if your parents are self employed or own a business, own real estate other than your primary residence, are divorced, or you are an international student…the NPCs won’t be particularly accurate.
Some NPCs do ask about divorced parents. But it is likely that input errors are common in the divorced parents case, because they may be uncooperative about divulging financial information, or the student erroneously uses only the custodial parent information for a college that wants both. Most colleges also do not give instructions on how to use their NPCs for divorced parents situations. Princeton is an exception, with very explicit instructions (but note that its rules differ from those at other schools).