Curious Question about Income

carolyn
Fri, 20 May 2005 12:26:47 +0000

xindianx, there are several things you need to know and do. I’ll assume, like Blue, that you are a US citizen, because things are much more complicated if you are an international.

First, has your family estimated what its expected contribution might be? Blue has mentioned one calculator, another one is at http://www.finaid.org/calculators/finaidestimate.phtml Keep in mind that the expected family contribution does not always match with the schools idea of what your family can afford. And, as I’ll explain in a moment, even if it does, the way the school meets that need may not match your expectations either.

Now, on to your other question. You should know up front that Johns Hopkins is not a school that guarantees to meet 100% of need of all accepted students. They do, however, meet full need for 90% of students who have demonstrated need. That means about 10% of students with need do not get a package that matches their need. I mention this because we have had several cases here where JHU did not come up with full demonstrated need.

Another thing you should know about JHU is that they are not always need blind in admissions - in other words, if faced with two equal candidates, one with high need, one with low need, they will sometimes take the low need one over the high need one.

Second, your chances of getting financial aid from JHU will not be different if you apply ED than if you apply RD. However, by applying ED you will be giving up a very important thing: the chance to compare financial aid offers from other schools.

Why is this important? Because you can get financial aid packages from different schools that cover your expected family contribution but in very different ways.

Here’s an example: School A offers you a financial aid package of $30,000. The package is made up of $10,000 in grants, $18,000 in loans, and $2,000 in work study. The “free money” in this package is the $10,000 in grants. The loans and the work study are not free - you have to pay off the loans you have to earn the work study money (and remember you do not get the work study amount up front so your family may need to come up with it at the beginning of the year.) So basically, the “cost” of this package to you is going to be $20,000.

OK, School B also offers you a $30,000 financial aid package. But their package offers you a $20,000 grant, a $5,000 merit award, a $3,000 a year loan, and $2,000 in work study. The “free” part of this award is $25,000 - money you do not have to earn or pay back.

Which package would be a better choice for you and your family? Obviously, the one from school B.

Now, here’s the tricky part with applying ED. Even if the school gives you a financial aid package that covers all of your financial need, there is no guarantee of how it will be comprised. It could be a package like School A’s, it could be a package like School B’s, it could be some wildly different combination, like a full ride based on merit from School C.

But, if you apply ED, you are basically stuck with whatever combination they give you in your financial aid package. You can’t compare offers to see if it makes better economic sense to go elsewhere, and you can’t negotiate with the school by saying “I received less loans elsewhere, can you match that?”

Now, getting out of ED for financial reasons is trickier than most people think. If you need $30,000 and the financial aid package they offer you is only $20,000 and they can’t do better — yes, you have a legitimate reason for getting out of ED and they probably won’t hassle you. BUT, and here’s the gotcha - if they offer you a package worth $30,000 but it’s mainly comprised of loans, not grants, getting out of ED is much harder. The school HAS met your need, just not in the way you wanted them too. Saying you can’t afford to go won’t work.

So, that is why the common wisdom is that if you need large amounts of financial aid, you should avoid applying ED. You give up a valuable chance to compare offers and find the best economic package. And, getting out of the ED agreement can complicate matters in terms of applying to other schools in time to qualify for merit scholarships, to get the best financial aid package, etc.

Of course, only you and your family can decide if applying ED to JHU is worth it no matter what the package will be or how it might be put together. If you decide to go ahead with ED to JHU, the questions you need to directly ask JHU are (1) what is the typical or average package for someone like me applying ED comprised of: how much in loans, grants, work study? (2) By applying Ed will I still be considered for all merit scholarship opportunities? (3) what percentage of ED applicants have 100% of their need met? (4) How does JHU compute demonstrated financial need? Do they use the Expected Family Contribution format, the FAFSA federal methodology, or another method?

Hope this all helps - I’m not trying to dissuade you from applying Ed to JHU, but please think about whether applying ED is the best from an economic sense for your family. While family members might say they are willing to give you loans (which would be great), don’t count on it — people have a way of saying they’ll give you moeny and then saying they can’t. Ask lots of questions upfront of both JHU and your potential lenders about interest rates, repayment schedules, etc. and be prepared for disappointment.