Tuition remission benefit: impact on EFC

Paying for College
1

<p>Hi, my son is a rising HS sophomore and we're getting serious this summer about making a college admissions plan that will carry us through the next 2+ years. In doing research, I've come up with a question I hope you can help me with.</p>

<p>My wife works for Johns Hopkins, which offers its employees a tuition remission benefit: half of JHU's tuition - which is more than $44K this year - portable to wherever my son goes to college. We are looking at schools with tuition in a similar range, and the net price calculators indicate an EFC of $25-30K (which seems staggeringly high, but that's another story).</p>

<p>I had assumed that the JHU tuition benefit would provide $22K of our EFC. But my research indicates most schools will reduce their financial aid grant, dollar-for-dollar, in the amount of any tuition remission benefit (though some will eliminate the student loan and work study requirement). Is this correct?</p>

<p>If so, I'm kind of surprised/concerned. My wife has passed on higher paying jobs because we thought they would have netted us less than the tuition benefit. Also, from JHU's point of view, this seems perverse. Their employee would be realizing no gain from the benefit, as our EFC would be unchanged; the beneficiary is whatever rival institution my son ends up attending, who gets to pocket the $22K of JHU's money that they would have previously extended to us as a grant.</p>

<p>Can anyone offer insight about this situation? I suppose one way to take advantage of the benefit is to go to a school that costs much less. That's not what we had intended, but it might be the reality - and figuring out reality is one reason we're doing this work now! Thanks for any thoughts.</p>

2

<p>That’s typically the way it works. Aid that is not based on need goes against need rather than EFC.</p>

3

<p>Wow. Kind of shocking - it just seems counterintuitive to me. Why would JHU pay $22K to another school when that payment doesn’t provide one cent in benefit to its own employee?</p>

<p>I think I’m going to have to find a job there to get the other half of the tuition benefit!</p>

4

<p>There are schools where the money would be of benefit, just not schools like JHU.</p>

<p>For example, schools with $22K or less tuition would leave you with just the room, board, and books bills. Or there could be schools where a merit scholarship + the tuition remission is greater than need-based aid would be.</p>

5

<p>That’s the way it almost always works. The tuition reimission goes off the sticker price of the school, so that the full cost to you is less. FInancial need, is bottom line exactly that. the NEED that family has based on EFC and more importantly the school’s NPC It is also based on what the school costs if there are any discounts on the tuiton. </p>

<p>Fordham University gives certain employees 100% tuition remission from its own tuition. Room, board, books, transportation, other expense are on the family. If a family qualifies for financial aid, it certainly is going to be taken into account that the tutions cost is covered. If there is still need, even at the new reduced cost, financial aid venues come into play. </p>

<p>Where it’s unfair is that those without any need at all, that have an EFC of 9999999 under any formula get the discount. For someone whose kid gets into a school that would have given $22k in financial aid, the net result is zero, even thought such a family is not going to be one with a lot of extra money, </p>

<p>The thing you get is the guaranteed $22K. You do realize that there are very few colleges in this country that guarantee to meet financial need fully, and that very few students get full need met. Most kids are gapped. Even those who do get aid packages often get a lot of self help, namely loans and work study in the mix. A $22K grant, pure money is tough to get. Also most schools that give nice packages, JHU included, do not use the FAFSA EFC, but PROFILE which usually comes up with a higher expected contribution for most people. There is almost certainly a student required contribution, even at the top schools. So your $25-30K EFC may end up being $5-10K higher at some schools, depending on your particular situation, just warning you here. I suggest you try some NPCs at some schools that may be under consideration.</p>

<p>“Why would JHU pay $22K to another school when that payment doesn’t provide one cent in benefit to its own employee?”</p>

<p>They would because in most cases it does provide a lot of benefit to its own employee. An employee who wouldn’t get ANY financial aid, gets every cent benefit from that $22K. If your kid went to UMD-CP or UMBC or any other state school, you’d be paying only a few thousand out of pocket, which most colleges including Harvard would require from the student anyways. Also, it benefits from like plans that other college employees kids bring to their school–they save on that amount. $22K is pretty generous, by the way. Cornell gives only $12K is what I hear. Also if two parents work at the school, the benefit is only given once. You can’t get the other half. Maybe Hopkins does this differently, but my friends works at a school as does her husband, and you do not get to double dip. </p>

<p>Schools have really cut back on these sort of policies. In my day many such kids got full tuition remission, usually up to the cost of the school where the parent worked. Now with many schools, you have to use an exchange pool, and it can get complicated with no gurantees of getting anything. </p>

<p>It works the same way with merit scholarship too. A kid gets a $20K merit award, it reduces the aid package. Usually it starts with the loans and workstudy, but yes, the financial aid is reduced because it is ONLY given when there is need. Once that need disappears or is reduced for nearly ANY reason, the financial aid is correspondingly reduced. At Lafayette, those who get the Marquis Scholarshp, an in house award, get the air package correspondingly reduced and there, since they know up front about the Marquis award, it comes off the COA, so the loans and workstudy are dispensed the same as anyone else with that final dollar amount of need, instead of having the award cover the self help first.</p>

6

<p>At JHU, both parents get the benefit, if they’ve worked there for two years: “Each parent is eligible if both are a full-time member of the faculty, staff or Bargaining Unit and have completed two consecutive years of employment with the university.”</p>

<p>I hope I don’t sound like I’m whining - but it is coming as quite a shock to find that the tuition benefit we’ve been looking toward for the past 4 or 5 years is in all likelihood not going to be a benefit to us after all, unless we significantly shift our focus from small liberal arts college to large state university (which I don’t anticipate happening). Or unless I find a job at JHU between now and October 2014.</p>

7

<p>Wow. Kind of shocking - it just seems counterintuitive to me. Why would JHU pay $22K to another school when that payment doesn’t provide one cent in benefit to its own employee?</p>

<p>Well, it does benefit employees whose need is much less. For two income families where the family contribution is $45k or more, getting half tuition means paying less than the $45k+ per year. For the family that has no need at all, that means paying $22k less.</p>

<p>Also, keep in mind that many/most schools don’t meet need, so getting half tuition can mean not getting gapped.</p>

<p>this applies to nearly all scholarship situations.</p>

8

<p>*I hope I don’t sound like I’m whining - but it is coming as quite a shock to find that the tuition benefit we’ve been looking toward for the past 4 or 5 years is in all likelihood not going to be a benefit to us after all, unless we significantly shift our focus from small liberal arts college to large state university (which I don’t anticipate happening). *</p>

<p>Or look at schools (private or public) that will give your child large merit. Then you’d stack the one merit on top of the other merit.</p>

<p>What is your child’s career goal?</p>

9

<p>He has no idea about his career goal yet, which (as a high school soph) is just the way we want it. To be honest, we’d be happy if he didn’t know his career goal as a college soph - we’re true believers in the liberal arts, and the idea that his exposure to new ideas and people during college will help him discover his true passions.</p>

<p>He’s on track (so far) to be a realistic candidate for highly selective schools which - as you with much more knowledge than I are surely aware - don’t offer merit aid. So that’s another piece of information to take into account as we embark on our college search.</p>

<p>Again, I’m just coming to terms with the reality that for a family in our income bracket (I wish we were one of those 9999999 EFC families!) and with our preliminary college aspirations, the tuition benefit that we’d been anticipating for years since my wife started working at JHU essentially doesn’t exist. If we change our focus to include schools that cost much less, or that offer merit aid, then the benefit reemerges. At least I’m glad to be figuring that out now, rather than two years from now, as it will definitely inform our decisions.</p>

10

<p>It’s a mean twist that those who have no need get the most benefit from merit scholarships and programs like your family has. It’s pure gravy for such families, in that they wouldn’t have gotten a dime otherwise. But financial NEED is just that, NEED. When the NEED disappears whether it’s from increased parental income, a merit award, state award like BF (Florida) or Hope (GA), then the AID is reduced.</p>

11

<p>Since you think your son may end up with stats (GPA and test scores) that will be competitive for top schools, then those can be his reach schools…because acceptance can be like a lottery.</p>

<p>however, he’ll still need match and safety schools, so those can be ones that will offer some merit. That way, if you discover that you can’t meet the EFC, you’ll have other options.</p>

<p>You’ve used the NPC’s on various schools’ websites. However, the schools that you’re talking about use CSS Profile and may not be accurate if you’re self-employed, have lots of equity, etc. It doesn’t sound like your child is from a divorced home, so you won’t have that to deal with.</p>

12

<p>We’re hoping to take advantage of a tuition exchange benefit. The exchange will probably exceed our need. One benefit would be that if d needs loans, she can take out the federal direct loans to cover part of the EFC. There are a fair number of people who can’t pay the EFC and so would fine this very helpful.</p>

13

<p>I can imagine different colleges many handle this in their own ways. As you proceed, it may be worth it to ask. I’m hesitant to offer any false encouragement, especially since I don’t have the docs in front of me, but it seems- always has- that the remission has helped us, a bit. Our line for “family contribution” itself, is lower than one would expect, just based the numbers for our own other resources. If I can grab the other docs, will let you know. Best wishes.</p>

14

<p>Just a thought: How does JHU handle tution remissions? They are a PROFILE school, I know. So what kind of aid would he get there? Would their own remission reduce their own aid?</p>

15

<p>The source of our remission is a college. They offer full tuition for kids of the staff who qualify. The remission is for other colleges. </p>

<p>My employer states this: [The remission] benefit may affect eligible dependent child (ren)'s financial aid package, scholarship, or other financial awards. For specific information, contact the Financial Aid office at the dependent child (ren)'s school.</p>