Scratching my head over financial aid stats!

Parents Forum
1

<p>D is a junior and will be applying to colleges next year. There are so many savvy, math-whiz parents on CC, I'm hoping some of you can shed some light on this for us clueless ones!</p>

<p>Our EFC will be around $16,000 a year, I estimate. I am trying to get a sense of how to interpret the financial aid statistics on the U.S. News and World Report site. I know it's hard to tell in advance, but I'm trying to find schools that tend to award grants and scholarships rather than load parents and students up with loans. (Yeah, me and about 100 million other people.)</p>

<p>For instance, here is some of the info for NYU, which is not known for having great need-based aid, for first-year students. I numbered each item to make it easier to refer back to something:</p>

<p>Total tuition and room/board, 2005-2006: $43,480</p>

<p>1. Students who applied for financial aid: 71%
I assume this means: Of all the freshman, 71% of them applied for aid.</p>

<p>2. Those determined to have financial need: 58%
Of all who applied for fin aid, only 58% were judged to have need? This doesn't seem that high.</p>

<p>*3. Students whose need was fully met (excluding PLUS or other private loans) N/A *
Maybe the university doesn't want to say. But in general, what is the significance of mentioning PLUS loans?</p>

<p>4. Avg. financial aid package
(% awarded aid)<br>
$19,543 (58%)
Well, this one I think I can handle. This was the size of the average fin aid package, and the 58% is the same one in No. 2, above.</p>

<p>5. Avg. need-based scholarships or grants
(% awarded aid) $13,629 (54%)
So, of the average fin aid package, this is the amount that doesn't have to be repaid?</p>

<p>*6. Avg. self-help aid, such as work study or loans (% awarded aid): $7,209 (52%) *
Of the average fin aid package, this is the amount that the parents and kids have to pay back? In addition to meeting the EFC?</p>

<p>7. Avg. need-based loan (excluding PLUS or other private loans):
$4,351
Does this mean, taking the amount mentioned in No. 6, this is the amount that is loans? (Assuming the rest is work study?)</p>

<p>8. % need met (of those awarded need-based aid): 68%
Not sure what this percentage refers to. Does this mean that the average applicant for fin aid had 68% of his or her need met?</p>

<p>Is there any way to glance at these figures for different colleges and get a sense of what is going on? Specifically, when it is said that NYU "gaps" people, what amount is being referred to?</p>

<p>I may have to actually turn on my calculator next year! Thanks for any help.</p>

2

<p>I hope I can answer these correctly. (Other parents, hop on in and correct me if I'm wrong.) You seem to be right on the mark with most of your assumptions.

[quote]
3. Students whose need was fully met (excluding PLUS or other private loans) N/A
Maybe the university doesn't want to say. But in general, what is the significance of mentioning PLUS loans?

[/quote]
Plus loans are not included because they are available to all parents with decent credit - even those without financial need, and are not offered by the college. These PLUS loans are/can be taken out by parents to MEET their EFC, not to meet parents' college-determined "NEED". PLUS loans are often used in addition to Stafford/Perkins subsidized loans.
[quote]
6. Avg. self-help aid, such as work study or loans (% awarded aid): $7,209 (52%)
Of the average fin aid package, this is the amount that the parents and kids have to pay back? In addition to meeting the EFC?

[/quote]
Sort of... the loans are the amount parents/kids have to pay back. The workstudy is "opportunity" - kid can work a job "up to" that amount of money. If the kid doesn't work, money is not earned. Some work-study amounts are so high (or jobs pay so little) that it is not possible to earn that total amount. Self-help also includes an expected student contribution from summer earnings and/or savings.<br>
I'll let other more experienced parents answer your other questions! HTH :)</p>

3

<p>I think that I can answer #8. The 68% means exactly what you defined it as. It means that they are meeting only 68% of what they determine to be your need (68% of your need, which is determined this way: COA-EFC=Need). This means that they gap and are leaving 32% of your need unfunded. </p>

<p>COA= Cost of attendance (total cost of attending-room and board, books, transportation etc.)
EFC=expected family contribution (what they believe you can afford to pay)</p>

<p>If I am wrong or unclear parents, please correct me.</p>

4

<p>BTW, #8 is critical in terms of grants. I have seen my son's package from a 88% of need met school, and a 64% of need met school. We are not a high need family, and it makes a several thousand dollar difference in our package!</p>

5

<p>My cousin's D has an EFC similiar to yours and they gapped her the EFC amount . A PLUS loan was also in the package at NYU . </p>

<p>Ditoo on what NortheastMom says about #8 . My D's school said they would meet 86 percent of her need - and they did , right to the penny !</p>

6

<p>when choosing schools, try to find those that meet 100% of need, OR offer merit scholarships and/or practice "preferential packaging." Strong students at schools that don't meet 100% of need may still get 100% of need met, if the schools are trying to boost their incoming freshman stats, and they may receive fewer/no loans and all grant packages.</p>

7

<p>As you already know:</p>

<p>Cost of attendance - EFC = Demonstrated need</p>

<p>For NYU,</p>

<p>Cost of attendance = 44,051 Your EFC = 16,000</p>

<p>44,051-16,000 = 28,051 (your demonstrated need)</p>

<p>IF you get none of the major scholarships then, your package can look like this....</p>

<p>Since NYU only meets 68% of your need, you will have a 32% gap (part of aid package the school does not meet)</p>

<p>28,051 * .32 = 8,976.32 (which you will have to figure out a way to come up with.</p>

<p>The college board states the 68% that they will meet (19,074.68) will be met as follows:</p>

<p>59% grants = 11,254.01
41% self help aid (loans and job) = 7,820.61</p>

<p><a href="http://apps.collegeboard.com/search/CollegeDetail.jsp?collegeId=3186&profileId=2%5B/url%5D"&gt;http://apps.collegeboard.com/search/CollegeDetail.jsp?collegeId=3186&profileId=2&lt;/a&gt;&lt;/p>

<p>(note: the college board is an excellent jumping off point to see how your tentative FA package will look)
So in reality your out of pocket cost for NYU is not the 16,000 EFC but </p>

<p>16,000 + 8,976 = 24,976 + the possibility of 7820 as loans must be repaid and you as a family will decide if you want D to work freshman year. The bottom line out of pocket cost will be $32,796 </p>

<p>It is a good thing that you are looking at the numbers now before your D gets herself emotionally invested in a school so that you can have the conversation now as far as how much you are willing to spend/borrow for her education.</p>

<p>hope this helps</p>

8

<p>sybbie, That was very helpful.</p>

9

<p>Sybbie, thank you for taking the time to explain everything so clearly. Even I can understand!</p>

<p>And I'm sure other parents will be helped to see the numbers in black and white. Scary. Unless applicants have well-to-do grandparents lurking somewhere, NYU is not going to be affordable.</p>

<p>I will certainly try to steer D toward schools that meet 100 percent of need, also taking note of how much of that may be offered as loans and work study. </p>

<p>Also, assuming that the U.S. News and World Report figures are accurate, I think it was really worth the $15 I shelled out for access to the site, as many CCers have said. Also on the USNWR site is a list of highest debt and lowest debt schools. That was an eye-opening read too!</p>

10

<p>Keep in mind that those figures are averages only -- a college that does not meet 100% need in all cases typically is giving the best aid to the strongest applicants. My son got his best financial aid packages from schools that did not fully meet need for all students -- but either tacitly or directly added merit-based aid to his need package. </p>

<p>Also, you need to look beyond the stats. Since you used NYU as an example, I feel it is important that NYU is unusual in that it is one of the few top private colleges that does NOT require the CSS Profile or seek extra information via its own financial aid forms, relying only on the FAFSA to compute EFC. </p>

<p>So here's an easy example: let's say you are a single parent with a modest income - your ex earns six figures, but is unwilling to contribute to your child's education beyond paying part of the costs for the in-state public. On the FAFSA, you have an EFC of $5000 -- but colleges that require the "noncustodial parent form" from CSS compute your EFC as being $20,000 - expecting the father to pick up the slack. </p>

<p>So lets say that NYU "gaps" you by only meeting 68% of need, as the stats indicate. Your NYU COA is $43,500 - your financial aid package will be $26,180 (0.68 x ($43,500-$5000). </p>

<p>Lets say your daughter also applies to another college that has a total COA of $42,000 and always meets 100% of need, but relies on the CSS Profile -- after factoring in your ex's income and your home equity (items excluded from the FAFSA calculation), your EFC is set at $20K - and the college gives you a 100% need package of $22,000. </p>

<p>Under the above example, the COA for attending the 100% need college is almost $3000 MORE than the COA for the 68% need college. </p>

<p>So you really have to begin by asking, how will this particular college determine "need"? </p>

<p>From there, when colleges do not promise to meet full need, it is best to apply to colleges where the student is at the top of the applicant pool, as the non-100% schools almost always leverage their aid, giving the most money to the strongest applicants. Boston University has a good chart that shows how financial aid levels correlate to academic stats here: <a href="http://www.bu.edu/finaid/apply/prospective/possibility2.shtml%5B/url%5D"&gt;http://www.bu.edu/finaid/apply/prospective/possibility2.shtml&lt;/a&gt;&lt;/p>

<p>Unfortunately most colleges don't offer this sort of info - but looking at the chart is a good way of getting a better understanding of how the process works.</p>

11

<p>Sybbie,</p>

<p>Excellent explanation and example. Your explanation shows 2 components that are often overlooked. The gapping of financial aid at many institutions and the use of PLUS loans to help pay.</p>

<p>The ideal thing to do is to send your prospective student to a school that meets 100% of financial need. Often these are the schools that are the hardest to get in to, i.e. Princeton.</p>

<p>Two things to look at, schools often package financial aid to attract certain students. Those with what the school is looking for, i.e. high SAT scores, may not get gapped. The other is placing your presective student in the mix of what the school desires.</p>

<p>The one thing they do not tell you in US News is that each school defines what 100% if demonstrated need is for themselves. 100% of need at one school is not 100% of need at another school. Using Princeton as the example again, Princeton does not use home equity as a source of funds in their calculation. Princeton also allows for private school tuition (pre-college) as a part of their calculation, other schools do not.</p>

12

<p>Separately, you may want to also look at the same stats page on USNews. It also provides some background on what they provide for merit aid.</p>

<p>Many people believe that merit aid takes away from the financial aid pool and should be abolished. This is the basic position of the Ivy League schools. My personal position is that once a schools provides for 100% of demonstrated need for each of its students it should be free to use it money to advance whatever institutional goals it sees fit, i.e. academic merit scholarships, athletic scholarships, etc.</p>

13

<p>Calmom is right that all packaging is not created equal so it is really important to know where your kid stands in the applicant pool. Do your research now as far as the average amount of debt a student walks away with and how the aid is packaged.</p>

<p>As a current NYU student, I have met many students (both grad and undergrad) who are really burdened downed with loans (at least I take solace in the fact that my employer is paying for a good amount of my graduate studies) but as a parentwould seriously think about my child's options for the future being saddled with that kind of debt.</p>

<p>
[quote]
So lets say that NYU "gaps" you by only meeting 68% of need, as the stats indicate. Your NYU COA is $43,500 - your financial aid package will be $26,180 (0.68 x ($43,500-$5000).

[/quote]
</p>

<p>But when NYU packages as 59% grants and 41% loans if a student is not at the very top of the applicant pool this package would have about 12,000 in loans where as if a student went to a school with 100% need, there will be loans but I think they will lower</p>

14

<p>Well, I don't know how NYU packages aid -- you can't go by average percentages because if NYU typically includes $6500 in loans to every student, then a $10K aid package would be mostly self-help, whereas a $25K package would be mostly grant. </p>

<p>All you can do is wait until the package comes and make a judgment from there.</p>

<p>I think it is a huge mistake for a student to refrain from applying to a college because they think it is too expensive. I say that from personal experience: my son's second choice LAC was very expensive and did not guarantee to meet 100% need, or promise aid to all students. My son really liked the school however, so I let him apply and after that simply reminded him frequently that we would probably not be able to afford it if he got in. I talked to other parents with kids at the same school and heard lots of griping about the costs, so I pretty much assumed that it was out of reach.</p>

<p>My son's #1 choice was a LAC that also did not promise to meet need for all students, but it promised that IF aid was given, it would meet 100% need - and most students got aid. Well guess what? They admitted my son and offered a small loan, but no grant aid at all. Meanwhile, college #2 came in with an award that had us doing a double-take at the figures -- it was far and above what any other college offered. </p>

<p>If I had relied on stats & percentages I might have mistakenly discouraged my son from applying.</p>

<p>The best approach is to use the stats to get a sense of what to expect, and to apply to some schools that are clear financial safeties -- schools that you know for certain are affordable. Beyond that, parents should make sure that their kids understand the financial limitations and know that it is possible that they will not be able to afford to attend the school where they get in. If the kid is going to be heartbroken, then I suppose it might be best not to apply in the first place -- but if the kid can take the possibility of the financial barrier in stride, then I really think the kid should be allowed to apply to whatever school would be the best fit. You never know, and statistics that apply to everyone else simply don't tell the whole story. This is ESPECIALLY true if for any reason the student fits a category, such as being an athlete or URM, that might give the school particular reason to want to structure a favorable award.</p>

<p>Again -- colleges that don't promise aid to all comers tend to leverage their aid to maximizee their ability to attract desireable students, which in turn results in very lopsided, feast-or-famine, aid policies. One student may be getting very little, whereas another is getting a package that goes well beyond need. The smart financial aid shoppers will look beyond the raw stats to try to also try to second-guess the leveraging process -- recognizing that schools where the kid has a strong hook are also likely to be more generous with aid packages.</p>

15

<p>My son was accepted at UCLA and I was prepared for a big gap as US News says they only met 85% of need.</p>

<p>Boy, was I surprised when I saw his provisional award letter. Their package met 100% of demonstrated need (COA- EFC)! He has $2500 in work study and less than $6k in loans, but everything else was grants!</p>

<p>Calmom, Sybbie and rest....I learn so much from you guys! Thanks macnyc for starting this post!</p>

16

<p>Congrats Fresnomom and Son for a "workable" package. At the end of the day that is all that we are looking for, something we can work with.</p>

17

<p>Also important to keep in mind is that the "% of students whose need was fully met" and "average % of need met" statistcs refer only to need-based aid (both self-help and gift), NOT non-need-based merit aid. Financial aid packages will include both types of aid. So it's possible that a school that doesn't meet 100% of need may provide non-need-based merit aid that covers some/all of the gap plus some/all of your EFC. (Although I think if they use non-need-based merit aid to cover any portion of need, it has to be reported as need-based.) </p>

<p>The total need-based aid awarded will never excced the calculated need (COA-EFC=need). However, non-need-based merit aid can be awarded up to the full COA. The standard fin aid statistcs generally also include figures related to non-need-based merit aid.</p>

<p>My work is related to admission/fin aid, but I'm using CC these days because my D is a senior and we are in the thick of all of this. With my own child, my <em>background</em> has not been too helpful -- it may have even made the anxiety surrounding this process worse. (There is a tool available on the website that is related to my work that addresses these issues of "net cost". I hestitate to mention it because I'm not sure if it would violate forum rules and I am not here for self-promotion. If you are interested, send me a message.)</p>

18

<p>good post , CalMom !</p>

19

<p>Fresnomom, congratulations on the great package. NOW is the time to email your questions to NKU concerning F.A. packaging for soph,jr and senior years. Get it all in writing! Too often freshman have workable packages, then the loans rise heavily and grants decrease in subsequent years. This may not be the case with your kid (I hope not!), but see if you can get answers to your questions in writing, then save those answers in case of discrepancy in future years. HTHs! Again, congratulations on the great F.A. package.</p>

20

<p>This discussion puts me in mind of the old cartoon ditty, "You Never Know Where You're Going Till You Get There," sung by Sylvester the cat. In the case of financial aid, however, it's "you never know what you're going to get until you open the envelope." Well, of course I'm exaggerating. But it seems to me that there are so many variables, fin aid is sure hard to predict! If the college wants your kid for some reason, concessions are made. </p>

<p>D's high school will process only seven apps per kid, so she has to pick really carefully. I'm seeing that the OOS publics are, in general, not going to be good buys for us unless they offer NMF money. Thanks to all posters for such great info!</p>