<p>Thanks texaspg. So to summarize, it looks like with no crazy amount of assets, below 150k, the family contribution is about 10%. Above 150k to 220k, it quickly goes from about 10% to 90+%."</p>
<p>I think the actual level for getting any decent aid is about 100K - at 130K to 140K we are being asked to contribute about 35% of AGI or 40K a year minimal… so in terms of actually getting FA based on need you shouldn’t go much above 100K a year and expect any. The amouint DOES jump a lot though… which I didn’t expect. I sort of thought it would be gradual using the same percent of AGI - but after 100K or so they want 50% or more of every dollar earned… which is based on BEFORE TAX amounts.</p>
<p>As this Dad is discovering, many schools will expect a family making 200k to pay the full ride. </p>
<p>Let’s face the economic reality here - even though 200k a year is a lot of money, the full ride college bill is 1/4 of that amount and tutition is not tax deductable in anyway at this income level. So if you include the the tax bite of 28%, the family will need to allocate over 70k to cover the bill, or over of a third of income. Few afford this if they live in expensive areas, or have mortgages to pay, businesses to run etc.</p>
<p>How do people do it?</p>
<ul>
<li>Limit choices to schools that offer merit aid.<br></li>
<li>Bite the bullet and pay</li>
<li>Save ahead</li>
<li>Borrow money</li>
<li>Reduce income and/or assets in the hope of qualifing for more need-based aid</li>
<li>Hope your child is one of those extra brilliant ones that earns a top scholarships (tough to plan for)</li>
</ul>
<p>Another issue is that previously it was possible to dump the house that you had to buy in the good school district and move into a smaller one in a less desirable neighborhood and then use the difference to pay tuition – but where we live the military is the number one employer and with the defense cutbacks and all, it’s darned near impossible to sell that house and even if we did, with all the foreclosures in our neighborhood our house is now worth less than we paid for it.</p>
<p>It seems to me, it is a lot more than 50% after a certain amount like 100k especially after taking into account after tax earning and ability to deduct tuition cost. And I am not sure if this is true but the calculator seems a little more generous than the actual amount also. No wonder, I have heard that some families actually have one of the spouses quit working or cut down to part time during the college years.</p>
<p>kathieh1 - Do you have a kid going to Harvard? </p>
<p>The numbers probably only apply to Harvard and may be Princeton since they are the only ones promising aid at 10% income upto 150k. I suspect most other schools work the way you are decribing. If you have a kid in Harvard, then the calculator is wrong.</p>
<p>As I read through this thread, it does seem crazy what many are proposing to do to pay for their kid’s college costs - move across country, sell the house, limit college choices. etc.</p>
<p>And then you only hope the 18 year old is good for it.</p>
<p>I am not looking at Harvard and we’re waiting on actual offers since I don’t think the calculators can be counted on… we’re close to retirement age so that MIGHT be taken into account a little. We’re looking at Pomona, Carleton, etc… LAC’s that do meet close to 100% need, but no merit… so I’m not sure what to expect… but on the calculator we are pretty close to full load… My husband has been putting the max into retirement, and that all has to be added back. His base salary isn’t that high… but he got some unexpected bonuses this last year… he’s in high tech. I don’t work at the moment… can’t find a job in this economy … so I’m waiting to see what happens.</p>
<p>My daughter is quite good statwise … has one 17K scholarship from local LAC… but she wants to go away and her grades/scores seem to be just under what gets her the top level of merit at her safeties… We are kind of just borderline in all the areas…</p>
<p>Her GPA is 3.93 unweighted and 4.03 weighted and SAT scores are each in the upper mid 700s but not 800’s. Really strong EC’s (dancer)… but you know… just another nervous parent waiting but not expecting much money… </p>
<p>This is an interesting thread though because being upper middle class as far as college goes is tough… and we’re just at the very bottom of where the aid goes away… If we did have more it would be a bit easier maybe.</p>
<p>She didn’t want to apply to Scripps… her current school is an arts magnet school and in her words is practically like a girls school… something she didn’t want for the next four years. I think it would have been a good choice for her personally… it is gorgeous! I think she didn’t want to apply to all of the Claremont’s… sort of picked the two she wanted most… Pomona and HM.</p>
<p>I admit I didn’t really get how much the extra bonus money would hurt us aid wise… I had been doing the calculators based on his prior year salary which was lower… and we could do what the EFC said for that – about 25K - so I wasn’t looking for merit schools as much as I should have… we should have. When he added 20K in bonus it increased out EFC almost 20K – the 100% level… Lesson learned.</p>
<p>By all means people should look at affordability and not count on anything.</p>
<p>GtbGuy1 mentioned that he will be retiring after his daughter is in college for 1 year, and that his income will drop significantly. How does such a situation affect financial aid for following years? Say, for example, his income drops from $200,000 to $60,000, and not including other factors such as rental properties, will the schools consider giving them financial aid for subsequent years? If so, it might be worth it to bite the bullet the first year, knowing there would be relief in subsequent years.</p>
<p>Who is to say. The process is not as straight forward as your question suggest. </p>
<p>financial aid is calculated on the previous year’s income. If daughter was starting college in the 2012-2013 school year, financial aid would be calculated on previous years income.</p>
<p>OP states that this is a combined income of both the OP and his wife (we do not know how this breaks out). </p>
<p>We do not know if she will be working</p>
<p>we do not know how much if any income is being generated from property outside of their primary home. You don’t know what their assets look like other that what they posted here.</p>
<p>We do not know to what extent they are contributing to their 401k/403b, etc (while monies in the account are exempt, the annual contributions are added back as income.</p>
<p>As this Dad is discovering, many schools will expect a family making 200k to pay the full ride.</p>
<p>Let’s face the economic reality here - even though 200k a year is a lot of money, the full ride college bill is 1/4 of that amount and tutition is not tax deductable in anyway at this income level. So if you include the the tax bite of 28%, the family will need to allocate over 70k to cover the bill, or over of a third of income. Few afford this if they live in expensive areas, or have mortgages to pay, businesses to run etc.</p>
<p>How do people do it?</p>
<ul>
<li>Limit choices to schools that offer merit aid.</li>
<li>Bite the bullet and pay</li>
<li>Save ahead</li>
<li>Borrow money</li>
<li>Reduce income and/or assets in the hope of qualifing for more need-based aid</li>
<li>Hope your child is one of those extra brilliant ones that earns a top scholarships (tough to plan for) </li>
</ul>
<p>This is exactly the point I’m trying to make. Instead this thread has been more on trying to discredit incomes of $200K not being middle class. I’m sure if the thread would have said “upper middle class” some would have disagreed with that. As we’ve seen there are many people in a similar situation and lots of great discussion on how to work it out. Great information for everybody to share here.</p>
<p>GtbGuy1 mentioned that he will be retiring after his daughter is in college for 1 year, and that his income will drop significantly. How does such a situation affect financial aid for following years? Say, for example, his income drops from $200,000 to $60,000, and not including other factors such as rental properties, will the schools consider giving them financial aid for subsequent years? If so, it might be worth it to bite the bullet the first year, knowing there would be relief in subsequent years. </p>
<p>MumTo3, actually this is probably what we will probably end up doing. Bite the bullet for the first two years and the reduction in income should give us some aid for the last two years.</p>
<p>Unfortunately the other factors will be considered when calculating financial aid. Also depending on the school, some schools will consider the equity in your primary residence. Some will assess it at 2x your income, some will not assess the equity at all while others will consider all of the equity up for grabs to be used for college expenses. The equity in the rental property as well as the income generated from the rental property will be considered a source that you can use to pay for college</p>
<p>Probably less incoming flak if “upper middle class” were used in the title, LOL…</p>
<p>A family has to be VERY wealthy in order to pay the full nut out of income, I agree. Most colleges expect that families will pay for college through a number of income streams–loans, current salary, kid work, savings, investments, etc. Another angle I’ve seen families use was to have the stay at home spouse go back to work with his or her salary going to college costs.</p>
<p>“even though 200k a year is a lot of money, the full ride college bill is 1/4 of that amount. If you include the the tax bite of 28%, the family will need to allocate over 70k”</p>
<p>50k is no longer a relevant number for fullfare. It is now 57-60+ which means 83k or so in pretax earnings commitment.</p>