Are there inconsistencies in the way schools meet all need?

College Search & Lists
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MODERATOR NOTE: Moved from another thread.

What many say is very true: read the fine print of these “we help college for all.”

  1. I do praise colleges everywhere for making things more affordable. There is nothing worse than a brilliant student who can soak up a lot of the learnings but simply cannot afford it.

So, ultimately, I think more colleges should invest more in their own students, especially after many appeals with evidence submitted.

  1. As a counselor and from my own life, here are things to watch out for:

a. How universities calculate money is still controversial. Some use FAFSA, private schools also want CPP, etc.

As we know with numbers, how they are presented presents a different story.

Some families who invested well have $10MM+ in assets, but no income. Hence, their FAFSA reports a very low EFC, hence full financial aid packages at schools that use FAFSA (mostly public schools).

b. Some financial aid calculations use something other than a first home (a retirement home where relatives live, land, etc.).

It really does depend on the person and situation. But, someone with a home, plus some farmland or retirement home, etc. can have it penalized.

c. Same thing with health accounts, retirement accounts, etc.

Some parent might be 65 years old, with $200K in cash for medical and retirement, but it is counted.

  1. “Full financial aid” is still a flexible term.

After WWII, in the newly formed GI Bill, the US dollar was strong enough, prices were low enough, and tuition was low enough that many veterans said they lived well on the GI Bill.

Even with full financial aid, it is often not enough to cover extras more than tuition: computers and technology, transportation, plane tickets back home during holidays or summers, rent during summer, and probably many other things I am not thinking of or mentioning.

  1. Even the most generous schools that are 100% need blind, even for international students, still have thousands of students take out loans.

I would need to interview these students at MIT, Harvard, etc., who still have loans. In their cases, it probably was still greatly worth it. But, if even the most generous schools cannot do everything, how can the rest of us?

List of Tuition-Free Schools for Low & Middle Income Students (Depending on Family Earnings)
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This thread is really for low income and middle class families. That means families whose income are between $0 and $105K, and are lucky if they have a $350K house that is mostly paid off, and they’re lucky if they have $50K in savings at the age of 65.

So I fail to see how stories about “families with $10MM+ in assets” help these families (not to mention that capital gains are considered “income”), and I also fail to understand how a 65 year old with an additional $200K is savings is relevant to the thread.

How is THIS relevant to the people for which this thread were started? Very few, if any, of “these students at MIT, Harvard, etc., who still have loans.” will come from low or middle income families. Low and middle income kids can attend Harvard, MIT, etc., for free or for prices that are affordable to them without loans.

These colleges are generally unaffordable to families in the upper middle class or in the bottom rungs of the upper 20% by income, but these are not the the target audience of this thread.

Furthermore, a tiny percent of college-bound kids from low and middle income families attend “elite” colleges, and their financial issues are not solvable by student loans.

Again, how is this relevant to families who can barely afford the house that they live in, or cannot afford a house at all?

Low and middle income students are not taking out loans to pay for “tickets back home during holidays”, their transportation is free campus busses or public transportation, and they go home for the summer, mostly to either work of help at home.

They are taking out loans because they cannot afford the tuition at any of the universities to which they were accepted, because the universities did not have high amounts of financial aid. They are taking out loans of $30K on top of their federal loans, so that they could afford a college with the annual cost of $15K after financial aid. They’re not taking the loans so they can afford to fly home for the holidays from Harvard, pay for expensive transportation, or hang out around campus in the summer without taking classes.

Advice for low and middle income families should be relevant for these families, not for families who own second homes or land, have million in assets or even a few extra hundred thousands in savings.

If you want to counsel low and middle income families, you should definitely be more knowledgeable about their challenges, needs, and the opportunities that they have.

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MWolf,

Thanks for the note.

  1. I apologize if my reply seems off. I did not know it was focused only on low and middle-income people.

  2. I was commenting more on flaws in the system, in general. Universities can say “we pay 100% of all needs.” In reality, there are many unmet needs on all continuums of the spectrum.

  3. If you can, please watch your tone of voice and choice of words. It comes across as highly adversarial, judgmental, etc. In my own time, I have gotten in trouble for these things. Please, don’t follow suit.

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The simple answer is that colleges can choose to define “need” however they want, and different colleges often have very different definitions of “need”.

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To avoid confusion, note that the first few posts were spun off from another thread as off-topic to that discussion for low/middle income families. A moderator moved them here and created an appropriate title relevant to the topic introduced by the OP.

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I remember several years ago someone sharing that the then head of FA at Miami (FL), who had previously been in finance somewhere, saying “we know how to read your tax returns”.

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I think that is a very apt comment. I wish what you just said was widely broadcast, as even something as streamlined as FAFSA, and supposedly standardized intake around the world, has widely different interpretations.

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I’m not sure what this means. Only domestic students can file FAFSA, and FAFSA is an instrument to access federal financial aid. All meet-full-need-for-all schools use CSS Profile to determine need.

And yes, schools’ CSS formulas vary, to suit each institution’s policies. The fact that CSS formulas vary is evident once a family starts running net price calculators…that’s why this step is a must BEFORE applying to a given college.

If this level of assets is not in a retirement account, these assets will likely generate significant income in many years. I assume you mean perhaps the parents are retired and don’t have employment income?

There aren’t many public colleges with programs that give full need based aid to any students based on FAFSA only (there are no public colleges that meet full need for all students that only uses FAFSA to determine need AFAIK.)

Of the ones that do meet need/provide full tuition/provide full COA for some groups of students, there is typically an asset test as well. For example, UIUC’s Illinois Commitment (full COA) requires less than $75K in income and less than $75K in assets (available for Illinois residents only): Illinois Commitment | Office of Student Financial Aid | Illinois

The meet full need schools that offer full tuition or full rides for families below a certain income level that use CSS similarly have a ‘typical’ or limited asset hurdle.

Regardless, no financial aid system can 100% prevent people who have the means to pay from sometimes receiving institutional need based financial aid.

I don’t find this surprising at all. These are assets.

Some people can and do play games when it comes to college financial aid…for example, using excess cash to buy a second home. That is money that could have been used for college costs instead.

For business owners, the tax code is often generous re: various ‘write-offs’…which some colleges disallow when assessing a company’s value and a family’s financial position.

It’s the colleges’ money that they are giving out, so only their rules apply. It’s also not surprising to me that different colleges would have different policies/values/beliefs about how to best ‘spend’ their financial aid dollars.

Colleges can’t ‘standardize’ their FA formulas because that would be collusion. Search “president’s 568 group’ and the resulting anti-trust lawsuit for some limited history.

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I agree the same family might do better or worse with the different need formulas at different schools. So, first, check NPCs. Even then, you may need to wait for actual offers to really know what you are looking at in terms of comparative costs.

One thing I would personally avoid is verbs like “penalize”. All colleges have some sort of limit on their need aid budget. They therefore have to make some sort of decisions about how much aid to offer to different families. In doing that, they “assess” various forms of income and assets. And they don’t all assess the exact same set of income and assets, nor when they assess the same income or assets do they all assess it the exact same way.

OK, so when a college assesses some income or asset you have, or assesses it in a way that is less favorable for you, that is not some sort of penalty. Like, this is not some sort of moral judgment that it is bad to have that income or asset. It just means that in their system, they are implicitly judging that adds to your ability to pay in that measure.

And if you disagree, that of course is fine. If you prefer a college where their formula is more favorable for you, that is also fine. My point is it isn’t personal, because the formula isn’t about merit or lack of merit or punishment. It is just about different ways of calculating ability to pay.

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That’s right.

I think sometimes there is a bit of a culture clash, particularly when considering private colleges. Some people kinda think of them as public entities anyway, and talk about what they should be doing accordingly. But these are private entities, and while they are technically non-profit, they are still operating in competitive markets, they still need to have budgets, and long-term financial plans, and so on.

And generally speaking, the US is OK with the existence of these competing private colleges because it is believed that competition is ultimately pro-consumer, meaning good for the students who purchase their college educations from these private entities. But price competition is typically an important part of competitive markets being pro-consumer, and so the legal system is protective of price competition in these markets.

So rather than this lack of standardization being a bug, from this perspective it is a feature, namely proof that price competition is actually happening.

Of course if this was our ONLY way of providing higher education, that might be not so good. But, we ALSO have a very robust system of public colleges, and at least for state residents, those are supposed to be trying to be particularly good deals when it comes to cost.

But that doesn’t mean our public system is immune to cost criticisms. Indeed, obviously cost depends in part on state, so that is already a potential source of criticism, that some states might not be doing enough to make their public colleges affordable. And then practical costs very much can differ within states, like some residents may live within reasonable distance of suitable colleges where they can also live at home and maybe also work and so on, and other residents do not.

But none of that is really about aid formulas, and particularly not aid formulas at private colleges. It is about state policies on higher education, which is a potentially very important topic, but a quite different topic.

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Very good point.

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FAFSA and CSS Profile may be common standardized forms, but colleges can interpret the information how they want to determine their financial aid.

Actually I would make the stronger statement that college students and applicants should not give any weight to promises to “meet need”, since such promises mean nothing without knowing how the college defines “need”. Getting something other than a vacuous promise means using the college’s net price calculator.

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Thank you for the reply. We agree. That was the point of my post: we need to know how the college defines need, and how they meet it.

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In some cases there are individuals with financial means who manipulate resources and appear to have need when they may not. There was a poster many years ago who used to boast about his family’s luxury vacations, having a wealth management advisor, expensive camera equipment, etc (and had his kids claim to be first generation when he got his advanced degrees in the US) whose older child got significant financial aid from a very top school. This is wrong on so many levels, but this isn’t the kind of situation we are hopefully talking about with respect to families with true financial need.
Yes some private schools differ in what they look at when considering need (eg some schools do not consider home equity, and some cap home equity when they consider need) and that is their right. But most applicants seeking FA have true need and/or may have special circumstances that make them truly a high need family.

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I agree with what you say.

My original post was saying there needs to be much more need in general. Just because schools say “we meet 100% of need,” I think that is often false, when we look closely.

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There needs to be much more need? What does that mean??

I think “meets need” schools can’t win in this regard. When their NPC’s are accurate and show that at a certain asset level, a family (even at a relatively modest income) no longer qualifies for their “full tuition” or “no loans” or whatever, parents freak out- “They expect me to sell the beach house to pay for college”. No they don’t. They don’t care that you have a beach house. They have a formula, you have “atypical assets” which means you are better off financially than someone without those assets.

And when their NPC’s are not accurate, i.e. there is some professional judgment and wiggle room on both the asset and income side, parents freak out “how can we be expected to plan when we don’t know how the college is going to treat our million dollar annuity which is supposed to cover medical costs from a car accident a few years ago?”

The bottom line is that MOST families fall into relatively predictable buckets, financially speaking. And for the families where the formulae don’t work (high salaries but limited assets because of a special needs child who has extraordinary medical costs; low salaries but huge assets due to an inheritance, etc.) that’s why financial aid officers (human beings, not bots) exist.

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I meant “needs met.”

Honestly, I am agreeing with a great many things people say. But, this forum seems like people like to debate or cut each other down.

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Not cutting down- trying to understand. And this forum is either a wealth of solid information, or a place where people post confusing or inaccurate information. What you perceive as “cutting down” is often people trying to make sure that we provide as straightforward advice as possible.

Some people post as if ALL need based financial aid is some catastrophic situation where a college will renege on what they will give you after freshman year and your family will suffer financial ruin if you attend that college. This is– by and large- inaccurate. Most colleges if they claim they meet full need, will match their freshman year aid for the subsequent years, unless the family has significantly higher earnings (thus less need). Some people post that merit aid is a big scam because your kid will lose their merit award after freshman year and again, financial ruin. Here– a family needs to read the fine print. If the college requires a 3.8 GPA to maintain the aid, that’s something for the family to consider.

Etc. It’s just nice if accurate information is being posted.

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