The interesting thing I have never thought of was redirecting my 401k savings towards private school. Based upon that assumption then yes I guess FA would not be needed in our case but if you send 2 to 3 kids through private school that could be 8-10 years of no 401k contributions. That is rather a troubling thought.
@laenen: ^^^ you’ve captured it in a nutshell. That’s the part of our financial situation we didn’t see, although it took more than just redirecting our 401k savings as Choate’s listed tuition/board price is merely a suggestion and there was that pesky 4% annual increase.
@panpacific: I believe the EFC was so wrong because something was off about the PFS that we couldn’t figure out. We did (and do) have one particular circumstance that complicates things, but that just was what it was at the time. We do have assets, but none liquidable without serious penalty. As SevenDad says, every family’s financial situation is unique, and I can’t offer more info. I’ve posted a bit TMI as it is for the purpose of perhaps helping lurkers who might be in our situation see how one scenario played out. You can be full pay and absolutely not part of the 1%.
This is where the new policy of SPS and Princeton make a lot of sense.
I’m fearful of that situation as well as we fund “optional” accounts but will need to help not-so-fortunate grandparents in the future. We’ve received no call so its either good or bad – maybe rejections and waitlists.
We haven’t received a phone call either and now I’m nervous. We are older parents and our prime income years are behind us. Our cash flow is lower than it’s ever been and our expenses need to be curtailed so we applied for FA. Having said all that, we have retirement savings, equity in our home, and the PFS said we should be full pay. I have no idea how this is going to go.
@bookwormsmom we are the exact same as you. We didn’t even apply for FA because the calculators and other research we did made it very clear we would get nothing. Being an upper middle class saver has killed us in the FA game for BS and college
I haven’t posted before but I think a lot of what has been said is true. I also want to agree with whoever said that BS is a privilege. I have helped my 8th grader apply to exactly one local school as a day student though 80% boards there. If he does not get full FA he will not be able to go. His dad and I have been really clear on this from the get go. He adores the campus, he loves the atmosphere but if they do not give him full FA we have nothing to contribute. It was a stretch to pay the FA forms fee and application fees. We have 4 kids, do not own a house, and have some debt. We have no assets. My son will go to the local public high school just like his older brother did and will do fine there if he doesn’t get in. He has plans to attend the local community college for 11th and 12th grade if day school doesn’t work out financially. I believe that we made the right choice in seeing what they can offer since that is what he wants, but I also know that there are lots of worthy kids out there just like my son who may get the FA over him. Life is life.
When it comes to 50-60k after tax dollars per year, a lot of families will feel the pinch even though they are not qualified for any FA per PFS, which I believe mainly consider current income and maybe substantial assets although they ask many questions about other factors. However, at least some schools will take the EFC report only as a reference or starting point. They could be more flexible and generous. Back a number years ago, PFS did think we could be right about full pay, a very discouraging message when we expected substantial FA. Fortunately a couple of schools did agree with us rather than PFS. I don’t know though if I’d have a case at all if my EFC report as a starting point had been so much higher.
@Center The calculator I used from one school’s website said we should expect to pay half so I was really surprised at the PFS that said FP. Then I spoke with a FA officer who said if the cost of private school represents more than 15% of HH income (which for us it does by a long shot), then they expect you to apply for FA. I asked why do they ask about home equity. FAO wavered and said they do consider overall wealth (and I guess your ability to borrow). Bottom line we have a unique circumstance that seemed to render the calculators inaccurate so without better information, applying for FA seemed prudent; not applying felt reckless. Maybe if DD is wait listed at her top choice schools, we’ll get the opportunity to discuss FP? Has that been anyone’s experience – even without these “heads up” phone calls?
This. We have a policy of no debt and aggressive savings. Though you get penalized for that, it beats the alternative. We were unable to sell our house/relocate when kiddo was applying, but we sold it last year and moved to a much less expensive part of the state. Life is back to normal now. So, consider how temporary the pinch might be. If we hadn’t already had solid retirement savings, forgoing four years of 401k contributions might not have been an option we would consider. What tipped the decision for us was that, even though we were approaching 60 and those contributions were dear, we knew the setback would probably be temporary, health and job-market willing. And we didn’t mind becoming better home cooks, walking or biking or reading more, or just learning to enjoy doing nothing together more often.
@bookwormsmom: I think the “15% of HH” guideline is questionable to say the least in almost all schools because it means to qualify for full pay, the HH income would need to be about $370K or higher assuming the total cost of BS is between 55-60K per year. For colleges, once the HH income hits about $200K, one’s chance of getting any need based aid is becoming slim to none. A few boarding schools are indeed sometimes more generous than the most generous colleges, but I think rarely would they stretch that far. As for the pre-M10 phone calls, I don’t think that is by any sense a standard process. Schools say they are need aware to mean your FA need may impact admission decisions.However, if your kid is highly qualified otherwise, most likely he will be put on the WL, and that’s when you can talk to them about potentially going the full pay route. Good luck!
@panpacific I agree 15% sounds questionable. Maybe I heard him/her wrong and it was 50%. 
In all seriousness, I have read overall BS are more generous than colleges, and the school of this particular FAO was reasonably well endowed. Further, 15% of HH and the dollar figure as you calculated are somewhat in alignment with this article: http://www.nytimes.com/2014/03/15/your-money/for-boarding-schools-an-evolving-financial-aid-philosophy.html?_r=0
May just be wishful thinking. From this standpoint, it seems like a guessing game but Thursday more light should be shed. Thanks for the encouragement! 
Yes, the fact that they are open to the idea of providing FA to families with income as high as 350K is encouraging.
I received one of these calls again this year, I tried to turn the tables in an interesting way. I’m a long term planner and a saver. Have been saving for a long time. They asked if I would be FP, I said will you accept appreciated securities instead of cash?
That would be the problem, have to sell ~$70K worth of stock to net $50K in cash after taxes. If they would accept $50K in stock I could swing FP. BS know how to receive appreciated stock, it is very common way they receive donations. This obviously would not be a donation as I’m receiving a benefit but the mechanics of receiving appreciated stock and liquidating it is something BS understand very well.
You are smart @RedSoxFan18! No calls for us:(. Not sure how to interprete that…
@RedSoxFan18 I am not sure you can “give” stock as payment with incurring cap gains.
I am neither an accountant nor a lawyer.
My understanding is that you can transfer appreciated stock and the recipient inherits your cost basis. When the recipient sells the stock the recipient pays the capital gains taxes. That said pretty much every BS is tax exempt so they do not pay the capital gains tax. There is a specific exemption preventing parent from transferring securities to their kids and then selling the securities and paying a lower cap gains tax rate. Such sales are subject to something known as the Kiddie Tax, and Kiddie applies to college students.
I am 100% certain you can do this when donating to their BS annual fund - and in fact you get to deduct t the current value of the securities not just the cost basis.
Also such transfers would not be subject to the Gift Tax specifically because you are receiving something of equal or greater value than the stock you transferred. Directly from the IRS a gift is: “Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.”
Again I’m neither an accountant or lawyer. Maybe there is on on the forum…
@RedSoxFan18 , that would be an interesting way to game the system. If I worked in development and had a friend in admissions, I could probably make a “deal” whereby you’d make a donation and get FA of the same amount. And really, what’s the difference to the school. But then again, if I worked for the IRS, I’d wonder why you didn’t have to sell your stock and pay me the capital gains for your regular consumption. I’m going to think about!
As for the main question, what we were told about college FA – and I think that the underlying premise is the same – is they want to see you put in some part of your past, some of your present, and some of your future. Clearly, if you have nothing (and there are kids at DS’ school who are from such extreme backgrounds that I would be ashamed to call anything in my life a hardship), there may not be much past or present, but what they don’t want to do is give you money when you’re sitting on an expensive home (or two), or telling them you have no money for them because you’re squirreling it all away for your future (as important as retirement savings may be). It DOES feel unfair for the savers, because someone who made the same amount and was frivolous isn’t asked to part with some part of his fun past while you’re expected to take out a second mortgage on your home. But alas, so it is. @ChoatieMom , you sound like a very cool person – I hope your son realizes how lucky he is.
How about a tax audit? 