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Formulas for Divorced Parents

amcquilkamcquilk Registered User Posts: 22 New Member
It's frustrating that the federal government required all schools to provide Net Price Calculators, but they all get to say "this may not apply if your parents are divorced", even though half of all kids have divorced parents. I've been asking at college visits, emailing and calling financial aid officers, and can't get a straight answer from anyone. Here is what I've learned:

1) Some colleges are FAFSA only. That means they calculate the EFC based on the custodial household only, including stepparents. This includes most state schools, and some private schools.

2) CSS/Profile colleges, which include most private colleges, use a variety of formulas:
a) Add together the EFC of two households, run independently. This means they are including the assets and income of four adults. This is the worse case scenario.
b) Add together the EFC of the CSS Institutional Formula. This formula includes 50% of the assets of each household (recognizing that it's far too easy to transfer assets between spouses), and only the biological parent income. They ask about the assets and income of step-parents, but only use the assets. This seems fair, but in my discussions, it seems most financial aid officers have no idea how the CSS comes up with the Institutional Formula, and they don't know if their school uses it or not.
c) Start with the EFC of the custodial household, and only change it if the EFC of the non-custodial household is greatly different. They ask for all the information, but don't use it all. This also seems fair -- if your non-custodial parent is a gazillionaire, they will adjust it. But if both parents are just your typical middle-class household, they only use one household. As that household income includes child support, the non-custodial income is already factored in (since child support is generally based on that income).

I'm curious what parents who have already been through this process have found.
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Replies to: Formulas for Divorced Parents

  • blossomblossom Registered User Posts: 7,970 Senior Member
    AMC, it may be frustrating but imagine the frustration of being a financial aid officer. You take your job very seriously- to try and enable each kid who enrolls in your university to get an education. It is tough (but not impossible) for a married couple to shelter assets so that they don't show up when the college tries to calculate their aid. It is pretty easy for a formerly married couple to do so-- and VERY easy once those parents have remarried.
  • amcquilkamcquilk Registered User Posts: 22 New Member
    Blossom -- I'm sure it's very frustrating when people try to hide assets. I'm not talking about people who are deliberately trying to mislead, or about super complex situations. Just about average people who can't get a financial aid estimate, just because they happen to be divorced/remarried (as compared to still married biological parents). Most colleges use the CSS net price calculator system. It seems like it shouldn't be that hard for CSS to update their NPC software to take into account two household students. This would enable students to make decisions about where to apply, and whether to apply early decision, just like the students in still-married households.
  • amcquilkamcquilk Registered User Posts: 22 New Member
    I heard another twist on this at a college recently -- the stepparent's income is considered for allowances, but not otherwise. In other words, they recognize that the stepparent is helping to support the household as a whole (so less of the biological parent's income has to go to housing, food, etc.), but do not consider the stepparent's income as available for college.
  • sybbie719sybbie719 Super Moderator Posts: 20,713 Super Moderator
    That is not a hard and fast rule.

    The school determines as what they will and will not take into consideration when it comes to giving out their own money.
  • BelknapPointBelknapPoint Registered User Posts: 2,808 Senior Member
    Most colleges use the CSS net price calculator system.

    Most colleges do not use the CSS Profile (or the "CSS net price calculator system," whatever that is).

    It seems like it shouldn't be that hard for CSS to update their NPC software to take into account two household students.

    CSS (College Scholarship Service, which is part of the College Board) promulgates the Profile financial aid application, which is simply a form that several hundred colleges use to calculate need-based financial aid for their students and applicants. CSS does not maintain the NPCs that colleges make available. There is no single CSS Profile "formula" that is used to determine need-based financial aid for those who submit the Profile. Each college that uses the Profile is free to set their own financial aid policies and determine how the data that is submitted with the Profile will be used.
  • intparentintparent Registered User Posts: 28,813 Senior Member
    We added the EFC's together for the profile schools, and made sure we weren't assuming that the kid could take out double federal loans (since both runs of the NPC showed the loans). Our final results were a bit better than this approach shows, but not far off.
  • amcquilkamcquilk Registered User Posts: 22 New Member
    edited September 24
    BelknapPoint -- I'm talking about the Net Price Calculator, NOT the Profile. Both are services offered by the College Board. Every school is required to have a Net Price Calculator. They can create their own calculator, or use 3rd party software. In my experience, almost all colleges use the College Board's Net Price Calculator. The College Board's NPC is very limited, in that it can't take into account multiple (divorced) households. However, since I am mostly looking at schools that also use the PROFILE, it may be that schools that use the PROFILE are also more likely to use the College Board NPC software.

    The Profile is a separate product/service from the NPC. Many schools, including most state schools, use only the FAFSA, so in that sense you are correct that the PROFILE is not used by a majority of schools. Of those schools that do go beyond the FAFSA, however, the CSS/PROFILE is almost universally used.
  • amcquilkamcquilk Registered User Posts: 22 New Member
    Intparent -- did you have stepparents in your situation?
  • BelknapPointBelknapPoint Registered User Posts: 2,808 Senior Member
    In my experience, almost all colleges use the College Board's Net Price Calculator.

    Interesting. This is most definitely not my experience.

    I have seen NPCs that run the gamut from very good (ask detailed questions and provide an output that closely resembles what the actual aid will be, assuming correct data was entered) to practically useless.
  • OHMomof2OHMomof2 Registered User Posts: 9,846 Senior Member
    edited September 24
    I also wish the NPCs covered divorced parents. It doesn't seem THAT hard to do and as you say, about half of parents can't count on the numbers generated by the one-married-family NPC.
  • amcquilkamcquilk Registered User Posts: 22 New Member
    I've found some interesting information on how EFC is calculated for the Institutional Methodology (Profile). Of course, colleges can use their judgment and do whatever they want, but many use the IM as the starting point.

    Total family income = bio parent income + stepparent income + unearned income (dividends, child support, etc.)
    Bio parent income share = bio parent income + 50% of unearned income
    Bio parent percentage of EFC = Bio parent share/total family income

    So if bio parent earns 50,000, stepparent earns 110,000, and unearned income is 20,000, total family income is 180k.
    Bio parent income is $60k. If total EFC is $30,000, the bio parent percentage is 33%, so the expected parental contribution will be $10,000.

    Do the same for the NCP, and add them together.

    I'm not using assets in this example, but my understanding is that it likewise uses 50% of assets, regardless of who owns the assets.

    Interestingly, they use 50% of child support, treating it as household unearned income, regardless of who the child support is for (whether the bioparent is receiving child support or the stepparent, which could be true of the stepparent has other children).

    https://finaidonline.collegeboard.com/fin/VignetteServlet/VignetteServlet.srv?relativePath=/profile/pdfs/ncp_imtreat.pdf

  • BelknapPointBelknapPoint Registered User Posts: 2,808 Senior Member
    Of course, colleges can use their judgment and do whatever they want, but many use the IM as the starting point.

    This is the most important part of the post. Unless you know the full formula for the college you are considering, it's just a guessing game.
  • OHMomof2OHMomof2 Registered User Posts: 9,846 Senior Member
    ^ better than the big fat nothing offered by most colleges' NPCs though.
  • ucbalumnusucbalumnus Registered User Posts: 62,173 Senior Member
    In theory, it should not be hard for a college that requires both parents to offer a net price calculator that asks if parents are divorced or separated and (if yes), ask appropriate questions about each parent's finances.

    In practice, there is a small number of net price calculator templates that colleges may use (the College Board one being a very common one). How well each allows better divorced parent questions and estimates, and whether each college actually puts such formulae into its net price calculator, may not be known to the students and parents.
  • ucbalumnusucbalumnus Registered User Posts: 62,173 Senior Member
    Of course, colleges who choose to use the non-custodial parent presumably know that it excludes a significant portion of financially needy students who have uncooperative divorced parents. That may be the intention, since it skews the admission class toward being less of a burden on the college's financial aid budget.
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