<p>Personally, I love cur’s Every F-ing Cent!</p>
<p>Is it Expected or Estimated Family Contribution? Anyway, it isn’t a Guaranteed Maximum Family Contribution, so College A did not “rip you off” by not meeting FAFSA EFC.</p>
<p>True Muffy333–some parents learn the hard way about “gapping.”</p>
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<p>There is also a lottery mentality connected with financial aid/EFC (associated with the lottery mentality of reach-school acceptances). The parents think, well, it doesn’t hurt to apply to these really expensive schools and just “see what happens. Maybe we’ll get lucky.” It’s wishful thinking, magical thinking, but it does tend to break some hearts. (Both parents’ and kids’ hearts).</p>
<p>Dad II wrote: “Most of these “I got in but I can’t afford to attend” came from the family of A1 group. Parents built a new house or what have you so they will not have enough to pay their EFC. At this time, it is really a family decision. If they really want to make it work, they could have sold the house. A lot families live in small house and drive old car to pay the EFC.”</p>
<p>That is not what we are seeing. In fact, we are seeing the opposite: those who live in “mini-mansions” with every member of the family driving a new expensive car and going on expensive vacations are receiving huge financial awards.</p>
<p>Those that Cur mentions, those whose “income is over $80k or if you have some assets, or if you are self-employed, own a small business, or a farm/ranch” are being given no aid. Even from colleges making a big publicity splash with their “middle class initiative” or those that state that" no one will be forced to forgo education at our institution due to financial reasons."</p>
<p>The difference is in how the colleges choose to see a family’s financial portrait. One can live in a >2 million dollar residence and elite schools exclude such from their calculations - they don’t tell such families to sell their house, take out a home equity loan, or put a lien against the house. But, own a ranch or farm, it’s a different story. </p>
<p>One can have a retirement account valued in excess of 3 million dollars and still qualify for substantial aid. But, if one has no retirement program, their very modest savings will be expected to fund education. </p>
<p>It’s no wonder some families are confused and surprised.</p>
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<p>A lot of people are shocked to discover that the expected contribution is usually not all the family is expected to pay. My daughter is at a State U and without her merit scholarships we would be paying a lot more than expected! Luckily I was aware of that and was rather pushy in having her redo the ACT to up her scholarship level. She was annoyed at the time but appreciates it now (well understands it maybe rather than appreciates it :rolleyes: ). As it is we have a gap - $9 - which seems rather random.</p>
<p>The thing is, the lavish lifestyle that is sometimes rewarded with financial aid is not rewarded at public schools. It is not always rewarded at privates, either. It is all in the way the Profile schools choose to look at the financial picture. I, for one, disagree with policies like those reflectivemom cites. However, it is the schools’ right to award aid as they please. They will eventually find out that their great push to include the middle class has failed miserably if they award foolishly.</p>
<p>I forgot to add: The ranch/farm thing IS unfair, and that does affect even aid for publics. When I worked in financial aid, I used to get mad about the breaks given to people who had rental houses & even certain businesses. The S Corporations can yield some great “losses” that lead to aid … even Pell grants. I did a lot of professional judgment on farmers, since it was the late 80’s (drought). If people can get federal aid for paper losses, it seems only fair that real businesses should be looked at differently than they are.</p>
<p>And yes, EFC doesn’t mean that’s all a family will be expected to pay …</p>
<p>The way some of these posts read is that MANY students with 3 million dollar homes are getting lavish financial aid packages. I seriously doubt that this is true (no facts to bear that out…but I doubt it). If there is someone out there with a home at that value and they are getting serious aid, it is likely (in my opinion) that they live in a high rent district BUT they bought their property 30 years ago for a song and watched it appreciate in value. I know folks of very modest means in CA who have a home value of $1.5 million. They built their home 14 years ago for $300,000. The appreciation of real estate in their area is out of this world. Their incomes are not. They are not paying a mortgage on a $1.5million dollar loan…they are paying on a $300k loan. And their income represents that of a family living in a modest house…not that of a millionaire.</p>
<p>thumper, I am not denying your statement. </p>
<p>However, when the kids graduate from college the parents can sell their greatly appreciated home and use the appreciation to fund retirement, travel, lifestyle, etc. Those without such assets, living on similar salaries, will not have this “windfall”. I happen to know several depending upon the sale of their house to fund their retirement lifestyle. </p>
<p>Similarly, those without a “employer funded retirement plan” are at a significant disadvantage when it comes to financial aid. </p>
<p>It would not take a rocket scientist to develop a more equitable means of evaluating financial resources - IF these colleges wished to do so.</p>
<p>Yes, at the same time that college costs are exceeding the rate of inflation, the “three legged stool” of retirement planning – traditional employer-sponsored pensions, Social Security and personal savings – has gone out the window. Not many folks get a traditional pension any more. Social Security benefits for many of us are uncertain. Employees are left to fund 401(k) plans with a small employer match – but oh, wait! The colleges assume we’ll stop fiunding our retirement for the four (times number of kids) years we have to pay THEM! </p>
<p>It’s a Catch-22. My parents and and in-laws were able to get away with saving almost nothing because of the pensions they got from the military and the union, respectively. Among a lot of people I know, 401(k) and IRAs are their only source of retirement funding.</p>
<p>Disclosure: I was a pension administrator for 15 years before leaving due to illness. I saw the choices people had to make all the time. Traditional pension plans dried up during my career.</p>
<p>Does anyone know if any other elite schools are planning to follow Harvard, Yale, Stanford and revamp their financial aid? Can any of the others afford to? What about a place like Northwestern (with about 2 billion in endowment?)</p>
<p>CountingDown: At my institution one tier of employees have a traditional pension. We younger folk have a glorified IRA that isn’t doing well at all, as you can imagine. They retire in early sixties; I’m thinking early seventies.</p>
<p>CountingDown, the change in retirement plans has been a real problem for us. H has worked for the same company 32 years. A couple years ago they were kind (NOT) enough to change the rules of the game … no more traditional retirement plan. Ouch! We had been saving extra, but not enough to make up for what we were losing. Now we need to play make-up … but we can’t, because we are supposed to give that money for college. Just one more knife in our middle class backs. We’re getting used to it, unfortunately. Thank heavens mama raised me with a constant chorus of “life ain’t fair” in the background.</p>
<p>kelsmom,</p>
<p>I know that at a previous employer, I worked the first 11 years under a “traditional” pension and they “converted” us to a cash balance type plan (of course they laid me off 3 years later, but that is another story). However, I do remember that there was some legal requirement (ERISA?) that when they converted us that they had to seed our accounts based upon the present value of our accumulated benefit to date - like if we had quit that day and then came looking for our pension on our 65th birthday.</p>
<p>If you H’s plan was so converted and he had 30 years in, I would think that you would be at the top of the curve (pretty much fully contributed for a full pension payment stream) and would have gotten a decent seeding to his converted pension.</p>
<p>I know in our case, when I was laid off after 14.5 years, the value of that pension would basically generate enough income to pay my utilities - LOL - as the original “traditional” pension was back end loaded by formula (years * age * fudge factor * final salary). And the next job ended up not even lasting the 5 years necessary for vesting before layoff. So I know where these things lead.</p>
<p>Fortunately, I’m about 2 weeks away from getting vested in yet another traditional pension. This time it is public sector, so hopefully it will be a bit more stable, but you never know, so I have been burying as much of our assets as possible lately in retirement accounts, although that too is very limited.</p>
<p>On the notion that a home is a retirement savings piggy-bank - don’t bet the farm on it! </p>
<p>First, we’ve all seen the wonderful crash and burn of the real estate bubble. I’d hate to be the person who was planning to sell out in some high-priced areas (CA) and move to a lower priced area using the home price difference to finance retirement.</p>
<p>And secondly, while most of us would love to be able to cash out like that, why should you have to pack up and leave the family and friends you know and start over? Retirement is difficult enough to deal with for many who don’t know what to do with their time. Add in a strange place and it just doesn’t sound like the golden years to me.</p>
<p>Goaliedad, yes … it was not as bad as it could have been … just not what we had been assuming all along. Our mistake. On top of that, there were some issues with company stock in the account that may be resolved through a class action lawsuit we recently learned we are part of … if successfully resolved, the company will put a bit more into our retirement account … our luck, though, we’ll get a settlement in our retirement account for that & it will be considered income for financial aid purposes!! :)</p>
<p>I am currently trying to get a real job & I am hoping for a community college job … LOVE the retirement, and my sub teaching years would actually count toward retirement. Ah, one can hope.</p>
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<p>Sorry, but the same could be said for those who own farms (they could sell to developers…or just sell the land period), or their own businesses (they could sell). These things, as well as home equity, are assets that truthfully affect many families with regard to financial aid…and that is the way it is. As long as people realize this is the case, there isn’t a problem. What bothers ME is that there is a notion out there somewhere that the “rules won’t apply to our family” and that leads to disappointment.</p>
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<p>Totally agree with that - how about those of us who have decent salaries, but don’t have the million-dollar + value homes and are not able to sell their homes for what they paid for it a decade or more ago, or even for what it is assessed for for property taxes? I posted this question in the FA board since I haven’t a clue how to account for this on the Profile when I file it…</p>
<p>And as I and many others have pointed out, there really is no way to know until you’re there. I saw on the ‘disappointed in financial aid’ thread a post about a college giving terrible aid, but I have a friend whose daughter just got a free ride to the same school. I don’t know the stats on the one who was disappointed, but there isn’t a place on any colleges website where it says ‘if you have these stats, this is what we’ll give you’ (or if there is, I haven’t seen it). And the free ride student’s parents aren’t eligible for any need-based aid, so it was all merit. I understand that there are few of those opportunities, but I guess what I’m saying is that parents come here and read that this kid got a great deal, and this kid got a bad deal, and it’s very hard to translate that into what deal MY kid is going to get.</p>
<p>So you can make projections and run the calculators and all that, and maybe that will help you have a realistic idea of what your situation will PROBABLY be, but again, that doesn’t mean a lot.</p>
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<p>So true. My daughter ended up getting a lot more money from an OOS public that didn’t have a reputation for giving that much aid, and much less from another school whose f.a. seemed much more generous, judging from the published figures. And none of the calculators I used online were even close.</p>
<p>My daughter didn’t apply to Boston University, to use an example of a college that is pretty explicit in how it awards merit scholarships (supplying a chart on its web site). But I’m wondering, does BU really stick to that? Does anyone have any experience with it?</p>