Should I trust the NPC? $85k difference!

I’ve been running tons of college board NPCs to get a general idea of how much my family will be expected to contribute at colleges that meet 100% of need however I’ve found an absolutely huge difference - an $85k difference!

My lowest EFC was Smith at $29k closely followed by Whitman at $30k, Sarah Lawrence at $31k, and Amherst, Swarthmore, Williams, Dartmouth, and Johns Hopkins all at $33k. The budget my parents have very generously given me is $45k which makes all of them easily affordable, as well as Duke at $34k, Tufts at $40k, Cornell at $42k, Pomona at $43k, Notre Dame at $43k also, and Grinnell at $44k. Wellesley came out as $48k and Columbia at $49k which seems workable, however the estimate for Brown was a whopping $114k which is completely unreasonable. It wasn’t the only EFC which was unaffordable - Boston College at $111k, Barnard at $101k, Northwestern at $74k, Mount Holyoke at $56k, and Penn at $54k, but none quite as high as Brown.

The prevailing advice on this forum is to run the NPC for a college and only apply if it seems affordable and since Brown’s EFC is $69k higher than my family and I’s EFC it isn’t looking affordable. But I’ve also seen here on CC and what my friends and family who have already gone through the college process are telling me is that Brown would match any lower offers, however when they think my family can afford $114k, I can’t see them offering me $40k in financial aid to match an offer from Whitman or Sarah Lawrence or wherever else. So is it even worth me applying to Brown, Barnard, Mount Holyoke, or anywhere else that the NPC suggests will be over my $45k budget, or is it still worth applying if I’m confident I’ll have a financial aid package under budget?

How can you have an EFC (>$100K) that’s more than the total sticker price?

That said, the EFCs I’ve run (over 30) have been remarkably consistent.

I would re-run those 100k+ NPCs on the chance that there was a data entry error. If the numbers stay high, but you really like one of those, contact the financial aid office and ask them to walk you through the formula. That will let you know where the difference originates.

Are these all prices per year, or total over four year?

Do your parents own a small business, farm, or rental property, or are they divorced or separated or is either of them retired?

To me it seems very important to include several schools where the NPC is estimated as something that you can afford. Also applying to one or two schools where the NPC gives a higher number seems okay as long at you are aware that you might not be able to afford them (which strictly speaking is true of the other schools, since the NPC is only an estimate).

@TheGr8Gatsby

  1. Are either of you parents self employed...or do they own a business?
  2. Are your parents divorced?
  3. Do your parents own real estate in addition to your primary residence?
  4. Do your parents own rental properties?

Check your entries on the Brown net price calculator. Also make sure you didn’t include parent income in the student section.

The difference between Smith and Brown may be explained in part by the way that each school assesses home equity (Smith supposedly caps at 1.2x family income, and Brown assesses 100%), but I don’t think that can result in such a large disparity (unless we’re talking a huge amount of home equity). I would first check for a data entry error, as already suggested, and then call the Brown FA office to tell them what you found and ask why Brown’s EFC for you is so much higher than many other less well endowed (and less selective) schools.

@happymomof1 Yep, the numbers I inputted are definitely accurate. It’s all the College Board NPC so I just had to hit next. I double checked and ran it again and it came out the same.

@DadTwoGirls Those prices are per year.

@thumper1 @DadTwoGirls As for my parents income, my mom owns a business and my dad buys apartments and houses and rents them out. The profit from the rent collected makes up around 1/3 of our family’s income and my mom’s profit from her business the other 2/3.

@thumper1 My parents are not divorced.

How could your family be expected to pay $114k for a year of college? Sticker price is probably $70k. I think your numbers are confused somewhere… for us Wellesley was the lowest EFC right with NESCACs, just as a comparison. Never ran any Ivies but it’s interesting that Sarah Lawrence came down so low for you- it was completely unaffordable for us with our numbers…weird! I have calculated probably 30 (like @Muad_dib) between 2 kids looking, and the only time I had such a disparity was when Tufts came out freakishly low and it was pointed out to me (thank goodness) that I had entered one of the tax things incorrectly. Once it was corrected it was very much in line with others.

Ok…there are a LOT of deductions allowed for business owners and rental properties that are not allowed for financial aid purposes.

Brown treats the equity in your primary residence at 100%. My big bet is it’s the same for all the rental properties your family owns.

Your mom probably takes business deductions on her taxes which are allowed by the IRS…but are NOT allowed by some schools (and it looks like Brown is one) for financial aid purposes. Those deductions are added back in as income.

The net price calculators for the colleges are NOT going to be accurate in your situation given the rental properties, and the business ownership. Even the ones you completed with “better” results might not end up being accurate UNLESS they specifically asked about business ownership and rental properties.

Yours is not a financial situation that the net price calculators generally are set up to handle.

If any of the schools have their own NPC, try those too. I think they’ll give you a better picture of what to expect. If your father owns several houses to rent out, I think you are in for an ugly surprise. He may count them as a business asset but the school may count them as a personal asset. Are the houses owned in his name or in the name of a corporation?

@thumper1 The CB NPC asked about both businesses and rental properties.

@twoinanddone They’re owned in his name. On the CB NPC we filled the numbers in in the ‘parents’ other real estate’ section. And it’s not several houses but one small house and two apartments that have a total value of around $200k if that makes any difference.

@h2ojld Maybe I’m referring to the wrong thing as the EFC, but the numbers I’m referring to are the parent contribution numbers under calculated family contribution. At the top of the page there is a number for Estimated Net Price for Academic Year which is indeed the full COA (at least for Brown and Barnard).

Those rental properties owned by your dad…in his name…are considered secondary real estate (not your primary residence). It is very possible that Brown is assessing these at a very high percentage for determining need based institutional aid.

There are also likely deductions related to the rental properties and your mom’s business that brown, and other colleges will add back in as income. Just beware…that could happen.

All the net price calculators do is ask for the value of these things. When you submit your financial is application forms, you will be required to provide all of your parent income tax documents including all schedules. The deductions will be very obvious.

I’m with @twoinanddone. You could be in for a big surprise in terms of your actual net costs at ALL of the colleges on your list.

Your parents have given you a $45,000 a year budget, right? I sure hope you have some schools on your application list that actually cost that amount or less…like your instate public universities, or places where you will get guaranteed merit aid.

Given your complicated financial situation, I would not rely on the net price calculators to give you an accurate net cost. You have too many moving parts.

Well, that’s a $200k asset. At 5.6% (FAFSA) that would add $11k to the EFC under the federal method, maybe more if the school uses a different formula. Brown, Grinnell and other schools may consider that just a second home and fully available to fund college. If you have a few more items like that, you could easily get to a $50-100k EFC.

You ask if you should believe the NPC? Yes, or at least be aware that those schools probably will be totally out of reach. Brown might be willing to consider other peer offers. On your list, the best bet of a peer are Amherst or Dartmouth. When you are touring schools, make an appointment with the FA office and have as much info as you can. They’ll help you. They don’t want to accept students who can’t afford to attend.

What you’re looking at then is what the schools believe your parents can afford. Your net price would be the cost of attendance. Indeed, rental properties and self-employment are going to increase your parental contribution, particularly at private colleges that use the CSS Profile as well as FAFSA. For the rental properties, any loss would be added back in, because depreciation isn’t really a true expense. Similarly, certain business expenses would be added back in. Each Profile school uses their own calculation, which would explain the differences you’re seeing. Because of that, the fact that you didn’t change any of the data doesn’t mean you didn’t input something correctly - it might just be an error on an entry that is only used by the schools with the high family contributions, and not the others.

I agree with the others – because of the business/rental income the NPC’s simply aren’t reliable. Each college has its own way of dealing with the details, but Barnard & Wellesley awards tend to come out fairly close for most applicants, and an elite school like Brown would typically be more generous than many of the other schools on your list.

I’m thinking that differential treatment of home equity may be part of the problem – and I know from experience with Barnard that the college may value the home differently than you anticipate. In my case it worked out favorably, because the formula Barnard used factored in original purchase price in a way that reduced the impact of inflation over the years. I had a complicated financial situation and Barnard was far more generous than any other college my daughter was accepted to.

I agree with other that your financial situation is too complex for predictions. The schools that came out low for you on the NPC may end up costing a lot more – and the ones that came out high could cost a lot less.

I’d suggest that you apply to two or three college that are financial reaches just to see what happens - and focus the rest of your college application strategy on schools where merit aid is likely for you. If you narrow down which your favorites are, you might try contacting the financial aid departments to see if any will give you a pre-read to give you a better sense than the NPC. No college is going to make any promises before admitting you, but you may be able to get better answers to the questions of how your parents’ income and assets will be evaluated.

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Can you copy paste the results…this seems strange

@mom2collegekids

These results don’t seem strange to me…at all. Boston College has been noted here numerous times as a school that looks at business owners and rentals, and the deductions are not considered.

As @calmom noted, Barnard MIGHT be more generous…but the NPC is not going to be how this student finds this out. The equity in both the primary residence and multiple rental properties is likely part of this issue.

This student needs to cast a broad net.

But the family has also indicated they are willing to pay $45,000 per year for college. That is generous enough to fund just about any instate public university. In addition, if this student is a competitive applicant for the listed schools, it’s very possible he could garner merit aid at some places that would bring his net cost below $45,000 a year.

Given that the student opted to run the NPC at Smith, Wellesley, Mt Holyoke, and Barnard… I don’t think the student is a “he”. (And while MHC might be happy to admit students regardless of preferred personal pronoun, I think Barnard still insists on admitting only “she’s”)

@calmom sorry about the gender mix up!

@TheGr8Gatsby - It really, truly, is OK for you to contact the financial aid offices at the places that interest you, and discuss the results of their NPCs. That will give you a much better notion of whether or not they can be made affordable.