I’m a bit confused because some financial aid estimators use income after taxes (ex. Georgia Tech and Carnegie Mellon), while most ask for adjusted gross income (AGI). Why do some colleges do it differently? My household income is 135k, but we only receive 85-90k after tax deductions. Most financial aid calculators are saying that I am a full-paying student, and that worries me because my brother is already attending college at sticker cost, so another 40-50k deduction from my household income is a big hit.
Are you indicating that there are two in college?
What schools are you looking at? Some may not meet need no matter what.
Are you noticing a big difference in the calculations at GaTech and CMU? If not, their calculations might take an ‘average tax’ into account.
I think the calculations between a private school like CMU would be very different than for GT. As a public you will have very different costs. If you are OOS you will be likely paying full price. CMU doesn’t promise to meet your need but they may give something.
Unless you think your taxes are higher than normal for some reason, it doesn’t really matter, since everyone else will be evaluated on the same basis.
Several more calculations occur after AGI, including itemized or standard deduction. So, if someone has a very expensive house with high interest, they can itemize deductions and thus reduce their after tax income, giving them a potentially unfair benefit. Also, household size for financial aid purposes may not be the same as household size for tax purposes: The household size is taken into account for exemptions on the tax return, so again, it could unfairly penalize or benefit certain families.
^^ But then it could be argued that if you earn $100k and I earn $100k, and you choose to live in a house that costs $2500 per month and I choose to live in a $1000 per month house, why should the school give your child a better FA package than me just because I save more or love to travel? We make the same, we just chose to spend it in different ways. The federal government is already giving you a bigger tax break than I get, so should the school also favor you?
It’s never going to be fair or even or understandable. It just is.