<p>The College Board got together economists and other experts to examine the college financial aid system and consider changes. The Rethinking Student Aid Study Group has issued a report </p>
<p>"A panel of education experts and researchers on Thursday proposed a broad reconfiguration of federal policies on financial aid for college, including a simpler application process, Pell grant maximums linked to the consumer price index and, most radically, federally financed college savings accounts for children in low-income families.</p>
<p>The panel recommended scrapping the current federal financial aid application, a dauntingly complicated form known as the Fafsa, and having the government get all needed financial information from the Internal Revenue Service…</p>
<p>Students’ eligibility for Pell Grants, the most important federal aid to needy students, would be based on their family size and adjusted gross income…</p>
<p>It also called for making the interest rates of federal loan programs to parents low enough to discourage families from turning to private student loans. …"</p>
<p>I will say it once more even though I seem to say it to an empty house - the current cut-off structure of financial aid is unfair. Financial aid should be structured the same as progressive income taxes - the higher your income, the more you pay, with no arbitrary stop (~$180k). There is an enormous difference between a family with an AGI of $180K and one with an AGI of $5 million - why on earth charge them the same “full freight” for their kids’ education. Instead, the tuition scale should be a percentage of all income. If this were implemented, colleges would actually have a lot more tuition funds coming to them.</p>
<p>Also, it’s just ridiculous to determine financial aid largely through the income in the immediately preceding year. This can be wildly misleading in terms of the actual ability of the family to pay.</p>
<p>I don’t enjoy paying taxes but I accept the rationality of a progressive percentage-based scale. I do not pay the same taxes as someone earning millions - why should I pay the same to send my kid to college?</p>
<p>We are paying full freight now for a child at a private university. It is costing about 1/3 of our total net income. We are at the same time trying to save for our second child’s education and prepare for retirement. I’m very happy for those below me on the income ladder who are paying virtually nothing for their kids college education. But I do resent those far, far above me on that same ladder paying the same thing I’m paying when for them it amounts to loose change and for our family it is essentially our entire opportunity to accumulate any actual wealth in this lifetime.</p>
<p>^^don’t you pay the same as a millionaire for a Chevy or Lexus? Or for a latte at Starbucks? Sry, but I disagree strongly with the suggestion that more tax dollars should be used to send kids to private colleges, just bcos they cost more, when a similar education could be had at the instate public.</p>
<p>Using only IRS data could exclude assets. Thus, a rich (asset) person with no income could easily obtain need-based aid. (Family could have a gazillion dollars in stock that pays zero dividends, so it would never be reported on a 1040).</p>
<p>I doubt that there is going to be enough money funneled into the system that those making outside of FAFSA “limits” are going to be getting much more. I am hopeful that middle and low income families get more aid. In my opinion, it is terrible that those kids who can really make a difference in their lives may not get the opportunity to get out of an adverse environment for college. Yes, those kids who are the brightest and most promising academically have scholarship resources available, but those kids are also helped by the private sector. The kids who fall between the cracks are those that could possibly make it in a nurturing college environment that can work with their gaps and who get out of their home environment. </p>
<p>Also there should be provisions for those who do not have community college within a commutable distance or without public transportation. For some kids, a car is a necessity to go to college. To get the car, they need a job. The car they tend to get costs a lot in the end in terms of insurance, repairs, upkeep, gas, so they end up working more to support the car and the job, and school because an ever tiny part of their lives.</p>
<p>We’re paying about 1/2. I’m not whining. I feel we are fortunate to be able to do this. Still…it would be wonderful to have some kind of relief…just a little. I realize that those who can’t pay as much certainly deserve the bulk of any assistance, but till…paying 1/2 of your take home pay to college costs is a bit steep. I know, I know..it was our choice to do this. Like I said…not whining…but…</p>
<p>With the high number of divorces in the U.S., often resulting in fathers being less involved with their children, these same children may be penalized by having wealthy fathers who don’t choose to pay much for their college educations. The fathers in these instances often don’t feel close to their children who don’t live with them.</p>
<p>Yet these children are assumed to benefit from their parents’ wealth and so are ineligible for need-based financial aid, when in fact they cannot attend the most prestigious universities without it.</p>
<p>So I for one think this situation should be addressed, because as it stands now, only the very poor or the very rich can afford to attend Top 20 colleges–unless of course the middle-class student chooses to take on debt to pay the tuition. A ridiculous step, in my opinion.</p>
<p>^^actually, schoolmarm, even ignoring Harvard’s new finaid policy, some (many?) of the top 20 (Unis and LACs) offer outstanding finaid to families making over $100k; several colleges have even replaced student loans with all grants. In such cases, it can be cheaper to attend an Ivy than the instate public Uni, even for middle class families. Of course, once we get past the top xx colleges which meet full financial need, the financial aid picture changes dramatically as most other colleges do not meet full financial need.</p>
<p>I do understand your point about broken families, but that policy almost needs to be considered on a case-by-case basis. If not, our country would experience a lot of quickie divorces on the day before fafsa is due. :rolleyes:</p>
<p>Regardless how the system is reformed, it’s still unfair to some group of families and some students.</p>
<p>I think the only way to have fairness to both parents and students is to have a system that pays to all students to go to college regardless of parent income. And I think being fair to students is more important than being fair to parents. Students should not depend on parent income in order to go to college. When a child becomes an adult at the age 18, this young adult should have total independence and freedom, including financial freedom. The young adult should have freedom to have an education, to choose a career, to fullfil his or her dream, to become a member of society. Society should makes best effort to grant this freedom and benefit to the young adult. Receiving this befenit from society will make the young adult feel grateful to society and become more responsible to society.</p>
<p>In order to support this free college education to all students society must have enough money to pay. So where does the money come from? It’s still from the parents. But instead of paying at the time students go to college, parents pay when they are working and receiving income. Paying for children to go to college is the duty of the parents. Why our government can collect money from working parents for social security benefits but cannot collect money from parents for their children’s college education? We are talking about universal healthcare, why we cannot talk about universal college finance? It’s all about shifting priority. I prefer to pay in advance for my children instead of seeing my children pay to Sallie Mae, Wachovia or other financial institutions later.</p>
<p>With this system no parents will whine about college education. Poor parents will not complain about beeing poor. Middle class parents will not debate whether they should borrow or withdraw retirement funds. Rich parents will not have to divorce or hide assets. And more importantly, students finishing highschool will not have to try to convince parents to let them go to private or public colleges, will not have to dicide whether they should take a fullride to a 3rd tier college or to borrow 160K to go an Ivy college. And a student who has a broken family like myself did not have be humiliated when required to show income tax return of a stepparent but received nothing from him or her.</p>
<p>Well, sure - and so does the person living below the poverty line. I don’t see financial aid for poor peoply to buy a lexus. This is just an absurd annalogy.</p>
<p>If we are going to wade into the waters of trying to make attending college “fair” then we’d better take the long view. We all fund these universities through the tuition we pay and our taxes - even private ones with endowments that go untaxed by the grace of the American taxpayer and who reap the rewards of research grants. </p>
<p>The system in its current form benefits two groups: those with income below $180k and the extremely wealthy. The vast swathe of families between these groups is being told to shut up and just feel grateful to hand over vast portions of our after-tax income during our adult years when the pressures are greatest on us to prepare for retirement.</p>
<p>Sorry - something seriously wrong here. I think these schools are missing many talented students who come from families like mine who look at the financial costs and just shake their heads. </p>
<p>Agree with the poster above who thinks that if we really want “fair” we have to disentagle the family money situation from the applicant. This has not just become a matter of family capability of somehow paying. It is now also a matter of family willingness to pay. Do we penalize applicants whose parents are too selfish or too cynical or too bad of money managers who the schools deem capably of paying but just won’t?</p>
<p>I remember someone telling me, long ago when I graduated from high school, that even a college education isn’t guaranteed by the Constitution. And I know from personal experience…students are much likely to succeed if they are invested in their education.</p>
<p>Regarding the car analogy…it does partially fit…the price of your car purchase isn’t based on what you earn. And when shopping for a car, you buy based on what you can afford, not what you think you desrve. Why shouldn’t college be the same? If you can’t afford an IVY, and don’t qualify for a full ride at an IVY, then you need to be looking at schools within your financial reach. There is fat too much emphasis placed on “top-tier” colleges…when lesser knowns can produce the same quality of education at a fraction of the price.</p>
<p>Part of the problem is also that many households are living beyond their means…which makes college more difficult to afford. As a professional tax preparer (in addition to being a financial aid counselor) I see this all the time. America has become extremely materialistic. Credit cards maxed out, high mortgages, multiple car payments, and feeble attempts to "keep up with the Jones’ ".</p>
<p>Another point is that we know for 18 years that our child will eventually be going to college. Why are people surprised to find upon high school graduation that college is going to be expensive? If a parent can afford 1/2 or 1/3 of their current income for college, why were they not just saving 1/6 yearly for 18 years and paying out of that?</p>
<p>^ that’s what i was going to say. I thought for the longest time that my dad was saving for our(my brother and me) colleges. Then he tells me he’s struggling to find enough to pay for everything..</p>
<p>I just wish i had the foresight to open up an investment or something to have some back up assets. Now as a senior in highschool with decent stats, i feel a little cheated b/c i’m in the middle middle class but i’m still worrying b/c i don’t think my dad saved anything for me. It also sucks b/c he won’t discuss it with me.</p>
<p>if there was a way for me to go through this financial burden alone, and leave my parents out I would..but i can’t.</p>
<p>^^ Because their current income was very likely NOT their current income for the past 18 years. For instance, 7 years ago my family went from ~$20k/year to ~75k/year (dad finished his doctorate and found a job in the private sector). I am immensely grateful that my parents are willing to pay the EFC of top schools, but we’ve also always lived below our means. That’s rare in America these days.</p>
<p>
[QUOTE=Mammall]
Well, sure - and so does the person living below the poverty line. I don’t see financial aid for poor peoply to buy a lexus. This is just an absurd annalogy.
[/QUOTE]
</p>
<p>It’s a good analogy, actually. The Lexus is being compared to the “expensive private university” in the analogy. If they can’t afford it, go for the used car.</p>
<p>We have been saving for D since 4th grade. Life happens, wages were lower then, buy the house, save for retirement, expenses of daily living. It is always a shock when you look at the cost of an education. I think school districts should incorporate some kind of parent university to help families strategize and be realistic with finance early on in the elementary level. When D was in 4 th grade, tuition room and board was 22,000. Projections for what costs would be when she would be in college were way off. I think people really lack the knowledge of how this works. I certainly was engaged but still it is a shock with the reality of it. Tuition cost have risen exponentially compared to salary rise. Also GC and Financial planners tell you don’t worry about the cost apply to whatever school you want there is money out there.</p>
<p>One overlooked fact is that the system of legalized price discrimination (charging those who have more financial resources a higher rate, a practice which would be illegal in every other industry) and easy loan money have allowed colleges to raise tuition in a more or less unchecked manner. For twenty-odd years, the increase in average tuition has exceeded the increase in the consumer price index, but most colleges still fill their classrooms. There is little or no price competition between comparable schools. This situation is the driving force behind making college unaffordable for many. Perhaps the end of the baby boom echo will bring market forces into play, at least for some segment of colleges.</p>
<p>To me, the situation is analagous to health care. Insured people rarely shop for medical services based on cost, since the amount they pay is going to be the same. With many students financing their education with third-party payers (financial aid, loans that won’t be repaid for years, and, of course, parents), they simply aren’t rejecting higher-priced colleges.</p>
<p>^^Interesting point, Roger, but not sure if its true in all industries. Low income housing, for example, is income-based…movies (and some restaraunts) give discounts to seniors (clearly age-price discrimination)…</p>