<p>Several posters have quoted from the same NYTimes article (<a href=“http://www.nytimes.com/2007/11/04/education/edlife/strategy.html?_r=1[/url]”>http://www.nytimes.com/2007/11/04/education/edlife/strategy.html?_r=1</a>), but I think this is the most pertinent paragraph:</p>
<p>
</p>
<p>If the college considers it an acceptable excuse, how can it be unethical and dishonorable? Some people are acting like it’s the end of civilization as we know it!</p>
<p>Yes, it’s not as black-and-white as some believe. The colleges quoted in that article are way mellower about this issue than some of the posters on this thread.</p>
<p>From the college’s perspective, there is no reason to hold a student who needs a lot of financial aid to the deal – those students are essentially the “loss leaders” for the overall ED scheme. Colleges want to lock-in students who are paying them – there is no particular interest for the college in locking in students that they have to pay to attend, except in a few cases of recruited star athletes who are filling what the college sees as a vital niche.</p>
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Actually, I’ve been keeping up with this thread. I couldn’t swear to it, but I believe that I’ve at least skimmed most posts on this thread. Not much to contribute though.</p>
<p>“I can attest that a $28,000 financial aid package is ballpark for a $70K wage earner.”</p>
<p>With all due respect, calmom, how can you attest to that exactly? Perhaps you can clarify for me and provide a few more details. I am flabbergasted that you can make such a statement with such aplomb.</p>
<p>Calmom: Re your post 1320. I did think that the applicant’s family must have very significant assets to be offered $5,500 when it could have expected $28k+ based on income. Over four years, it’s nearly $100k! somehow, this puzzles me: how much asset can a family accumulate for it to be in this situation?</p>
<p>Mummom, go back to the original post regarding aid between Calmom and Marite up a short way in this thread. Open the link in the post to the Penn info in a different window and then read each post in order between them. They are taking the data that Penn is posting and parsing the information based on what is known from what Penn says. It’s actually quite a logical conclusion, but I’m no numbers genius so I had to have the chart open while I was reading LOL to follow along.</p>
<p>Thank you, but calmom attested to the amount of financial award a family making 70k can expect. I think this is irresponsible. She should provide a more detailed explanation so people don’t jump to the conclusion that this is what they can expect. This is separate from the Penn discussion.</p>
<p>Marite, an asset worth a $1 million would increase EFC by $56,000. The asset does not have to be cash, and it does not have to be liquid – it could be a real property. </p>
<p>Suppose you have a retired couple who owns some income producing rental property, and their annual income is $130K from that investment property. In an urban area that doesn’t have to be much. If you have a building with 4 apartments, each renting for $2500 a month, you’ve got $120K annual income.</p>
<p>I am using the example of a retired couple so that you can see how unrealistic it might be for the family to sell or encumber the property in order to finance the college education.</p>
<p>It can be worse if it’s property that doesn’t throw off cash flow is unencumbered and potentially owned by multiple members of a family. Property of any kind cannot be converted quickly or easily into cash and there may be limitations on the control of the property. If it generates cash flow at least that offsets the increase to the EFC…if you are honorable and report stuff like this. I often wonder if everyone does. I wondered if the Penn example was an international, but then a remembered the Stafford so that person in that example must have qualified, but what if the parents were foreign, would that impact Penn’s package?</p>
<p>What is most astounding about the Penn FA policies is that only 40% of all undergrads get ANY grant aid at all. 60% get zippo. I find it hard to reconcile with their claimed average FA for the different income groups. Since RD is always much more competitive for Penn, they need to keep a big pot of money to for top candidates compete against the big boys. ED FA applicants must be getting the shaft. No wonder there are some grumblings on the Penn board.</p>
<p>About 24 hours ago…I posted this. Why don’t all students apply ED and then just wait for a better offer to come along…or just say they can’t pay the bill? I do not think that is what ED is all about. I am NOT a fan of ED for lots of reasons, but I also don’t think it’s set up so that everyone should just apply with the idea they will just back out if they can get more money elsewhere or just feel that the price to pay is too high. Sorry…I just don’t think that is what ED is designed to do.</p>
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Actually, if it generates cash flow it means that it is double-counted, as it is both an asset and income. The net income raises the EFC by roughly 44 cents on every dollar, and the value of the asset pushes up the EFC by 5.6%. And if generates income its going to show up on tax returns.</p>
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Because they have to turn down the ED school – unless you are suggesting that they <em>accept</em> the ED offer but continue the application process, which is NOT the factual scenario presented here.</p>
<p>Obviously, when August rolls around, if they don’t pay the bills, they aren’t going to be attending the college.</p>
<p>Just a question: do you understand the difference between playing stud poker and draw poker?</p>
<p>Nope…I’m not a gambler at all.</p>
<p>fireandrain:</p>
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</p>
<p>My point is, other than FAFSA, there’s no calculator that will be accurate for Profile or schools that use their own institutional methodology.</p>
<p>Here’s a scenario where a parent with $70,000 would have a calculated FAFSA EFC of close to $28,000. The parent is assumed to have significant savings. This is from last year’s FAFSA (I haven’t updated my spreadsheet). The 2009 calculation can be found here:</p>
<p><a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf</a></p>
<p>A. Age of older parent 56
B. Number in family 4
C. Number of children in college 1
D. Parent income 70000
– parent income from work 70000
529 accounts $100,000
Total parent assets (investments and cash) $300,000
E. Parent assets $400,000</p>
<p>Parent FICA $5355
Parent federal income tax $7000
state income tax $4900
Parent income protection allowance $21,660
Employment expense allowance $3500</p>
<ol>
<li><p>Total allowances $42,415</p></li>
<li><p>Available income $27,585</p></li>
</ol>
<p>Asset protection allowance $69300
3. Discretionary net worth $330,700
Asset conversion rate 12%
4. Parent contribution from assets $39,684</p>
<p>Adjusted available income $67269
Contribution from AAI ($7,732 + 47% of AAI over $28,600) $25,906</p>
<ol>
<li><p>Parent contribution $25,906</p></li>
<li><p>Child contribution (calculation not shown) $2000</p></li>
</ol>
<p>Total EFC $27,906</p>
<p>This is getting absurd. We’re using examples of retired couples that we don’t even know, and people with $1 mil in assets, but not providing details about how we can attest that a person who makes $70k can expect $28,000 at Penn; Marite says that a person with such and such income can “expect” 28k in aid, at Penn, when it’s just been discussed how that “average” number is meaningless, and on and on and on.</p>
<p>There is so much misinformation being posted here it’s mind-boggling.</p>
<p>mummom, we are all try to help, doing what we can.</p>
<p>Yes, but when all the “well-meaning” advice begins to do more harm than good, perhaps it’s time to stop? Also, a disclaimer that one is NOT an expert in the financial aid field once in a while would be nice.</p>
<p>vossron will pay all damages related to taking his opinion as gospel.</p>
<p>No, really. After all, you read it on CC</p>
<p>;-)</p>