<p>Hello fellow CCers :)</p>
<p>I'm an Australian student applying to colleges that provide international need-based aid for entry in Fall 2012.</p>
<p>Recently, while I've been trawling through the internet for some indication of what my expected financial contribution will be, I noticed that the American income brackets seem to be a bit different to Australia, even though our currencies are currently at/near parity.</p>
<p>In an effort to find an explanation for the difference I stumbled upon Purchasing Power Parity (PPP), which "is a condition between countries where an amount of money has the same purchasing power in different countries" - Wikipedia. </p>
<p>According to this website: 4</a>. PPPs and exchange rates the PPP between Australia and USA is currently ~1.56AUD/USD. It appears to follow that my parents' gross income is actually worth ~2/3 of its value when adjusted for PPP (even when converted to USD, as in financial aid forms).</p>
<p>Am I correct in my analysis? (I must admit, I'm not exactly an econs whizz so I'm aware I could be very wrong! haha) If so, should I include a note to this effect in my financial aid application forms or are American universities aware of PPP?</p>
<p>Each college and university has its own way of interpreting the financial data of foreign applicants. Some may apply this kind of formula, but others won’t. You really just have to apply, file the financial aid forms, and take your chances.</p>
<p>What is most important for you however, is that now you’ve got a better sense of what spending lots of Australian $ for a US education can mean for your family. Even though the US college/university will almost certainly be doing the math at something close to parity, the effect on your family’s personal economy will be much more significant. Be sure to have a solid option in your home country in case you find the US college/university unaffordable.</p>
<p>After reading about some int’l students’ FA awards, it has appeared that some/most/all schools that give aid to int’ls do have some kind of formula that has determined that foreign dollars “go further” than US dollars in many cases. </p>
<p>Some of these int’l kids have reported on CC that their families are expected to pay more than a US family with the same income/assets. So, if they’re from certain countries, then colleges may calculate that more of the family income can go towards college costs. </p>
<p>Of course, this is just based on what kids are reporting, not on any hard data.</p>
<p>Why am I not surprised that happymomof1 and mom2collegekids replied within a couple of hours of me posting this? Thanks to both of you, not only for your advice here, but for your continued support of the CC community - it’s great to see! :)</p>
<p>@happymomof1: OK, so if I take your advice and don’t include a note then is there an opportunity to discuss the financial aid offer (read: ask for a lower EFC) after I get it? Also, don’t worry - I have a solid safety back home that I’ve already been accepted to (the academic calendars are out of sync so if I get accepted to an American college I will pull out after 1 semester in Australia).</p>
<p>@mom2collegekids, I think the data shows the opposite effect in this case - that US dollars “go further” than Australian dollars. (Though I must say, this whole topic is rather confusing!) In effect, however, I think the outcome will be as you reported - that my family’s EFC will be higher than it ought to be if PPP was taken into account.</p>
<p>Also, perhaps if I’m more specific about the colleges I’m applying to, someone will be able to be more specific about the financial aid processes. I’m applying to Harvard, Yale, Princeton and Stanford.</p>
<p>We know people in Australia and I’m not sure they would agree that the U.S. dollar goes further there.</p>
<p>Regardless…schools deal with financial aid from international students all the time. The requirement for YOU is to list all your monies in U.S. dollars using the exchange rate the day you file your application forms. Then you wait to see what the school determines your family contribution should be…and what your financial aid award will be…if any.</p>
<p>No real difference for an international student vs. a permanent resident…except the exchange rate of the currency.</p>
<p>HighOracle,</p>
<p>When you get your financial aid packages, you certainly can ask for a “reconsideration” of the package. Whether or not the institution involved will do so is up to that institution.</p>
<p>I personally do not know how they determine international student FA. But if I were sitting in their shoes, I would figure out what is the median income of the country where the applicant lives, determine how much “excess” (EFC) income the family could contribute to a student´s education based on that country´s cost of living, then convert the EFC to USD.</p>
<p>There is no point of figuring out PPP between Australia and US because your family is living in Australia. They need to use their money to purchase goods in Australia, not in the US.</p>
<p>@thumper1: Perhaps I was unclear, but my intended point was not that “the US dollar goes further there [in Australia]”, but rather that the US dollar goes further in the US than the Australian dollar goes in Australia. But yeah, it sounds like I might just have to trust the financial aid offices for this…</p>
<p>@happymomof1: Ah, that’s great. At least it means that the first financial aid offer isn’t the final one, potentially. Not so much pressure then, I guess.</p>
<p>@oldfort: I was under the impression that PPP showed the relative value of the currencies within each country.? i.e. a gross income of US$156,000 in Australia will buy you the same standard of living as US$100,000 in the US (using the 1.56 PPP quoted above). Am I wrong? This would be subtly different to your system, because the “excess” income could potentially still have a different amount of “purchasing power”.</p>