<p>I just have a question behind the logic behind some aspects of the financial aid system.</p>
<p>Let’s say a family earns $60k in 2008, making them very eligible for financial aid and having the school pay for most of the ride. Only the father works, and in 2009 he decides to work an extra night shift with random and unpredictable hours, to try and earn a little bit extra. After scraping by and getting a few raises here and there, he earns $70k in 2009. The school then decides to cut $10k into the financial aid package, meaning that every drop earned by this father had to go into the school.</p>
<p>Now my question is, what incentive is for this family to have earned any extra income, if it meant it was going to the school? Morally, they’d pay as much as they can so that other people would get financial aid if they needed it. But what stops some less-than-moral people from working fewer hours, holding back on their income, relaxing instead of working night-shifts, so that they get the largest financial aid package they can get? I think similar arguments could be made against the welfare system, but I just want to get some opinions and reasons. What rationalizes and justifies this system? Doesn’t the school make less in the end if they can’t encourage families to earn more money?</p>
<p>First, if a family earns an extra $10k their financial aid is not likely to change by $10k … it would likely be more like $2000-$3000. Granted after teaxes are also taken out of the $10k for many families the net take home (after taxes and college) is not real high … not a lot of incentive to pursue marginal increases in income. That said most increases in income will carry forward after the student is out of school so raising one’s base salary if often a good idea at any time.</p>
<p>Second, the number of schools that fully meet need (as they define need) is very small … the vast majority of schools gap students … so any additional money only helps if the student has been gapped.</p>
<p>How about pride…being proud that YOU (the parent) contributed financially to your child’s college education costs.</p>
<p>No secrets here…I’ve posted this numerous times. I’m a professional…and MY whole salary…every nickel of it…went to pay for the college costs for our two kids for the SEVEN years they were in college (they only overlapped one year…that was a doozie). My husband’s earnings paid all of our other family bills. But my earnings went solely to college costs…every penny. I suppose I could have quit my job…but you know…we were mighty happy and proud that we were able to help our kids go to college. It never crossed our minds that one of us should not work, or work less so that someone else (the college, for example) could pick up the tab.</p>
<p>Our AGI changed ~$12k and the school wants us to pay three times the amount last year (~$8k for a year to ~$24k in a year). This happened despite our family having one more kid to send to college and having to pay mortgages on a new house. </p>
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<p>I’m actually the student, the child. I speak for my parents because I find it so unfair that my father worked so hard for no apparent benefits, and wonder why this sort of irrational business model can survive the test of time. </p>
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<p>Unfortunately, while it’d be great to be able to pay for our school, in our case it would cut into our livelihood as we don’t have two paychecks supplying the family. The problem here isn’t the fact that we aren’t proud about being able to send a kid to college or not, the problem is the reasoning behind why a school would try to drain a family of every extra penny instead of leaving an incentive for the family to keep earning more, so that the school AND the family can benefit, rather than having the family be one-sidedly lazy and then leave nothing for the school (except a bigger financial aid loss).</p>
<p>Excellent points from the two answers. I’ll chime in. First of all, for the vast majority of people, getting more money is not going to mean it all goes to financial aid. There are a few rare cases where that might happen in the low income categories or if your child is in a special program, so if that is the case, you should run some figures to make sure you aren’t cut out of program that has sudden drop features. </p>
<p>But most of the time, is not on a cliff schedule. The other thing is that you don’t live for financial aid and college alone. Kids drop out of college, finish college, transfer schools. You can’t really predict where they will end up for college, and the more money you have available, the more choices you have. </p>
<p>I don’t believe parents should endanger their health working 2nd, 3rd jobs to pay for college. I think it is a foolish think, not heroic, and should not be romanticized when done. There are a lot of affordable options available, and it is not so essential that any human being should work him/her self to the bone to pay for college. </p>
<p>However, earning more money does increase options for the entire family, and a second job should be viewed in that light. The college years should not be viewed within a vacuum as the be all to end all.</p>
<p>cptofthehouse, it looks like I posted in the time you were typing a response. Thanks for the post, but a lot of the ideas you listed are nullified by the facts I’ve stated in my post. The school is taking everything extra, and earning extra money has done nothing for our family. Do you think this is something I should be taking up with the school, if this amount of financial-aid decrease is abnormal?</p>
<p>I have exchanged correspondence with them and will continue to do so until I get answers =]</p>
<p>The primary aim of this thread is to learn more about why the system is the way it is. I see it as a highly inefficient and discouraging system, but there must be a reason for the way it is, since it has stood the test of time.</p>
<p>Re standing the test of time: One thing we learn from evolutionary biology is that not all features that remain within a population actually promote survival. Provided a feature does not actually decrease the possibility of survival, there will be no selection against it.</p>
<p>This college being unaffordable for your family does not affect the survival of the college. Unless or until so many students find the institution unaffordable that the number who can afford to attend are not sufficient to pay for the institution’s bills, there is no effective check on policies like this apparent one. Your hope right now is to find that there was some kind of mistake in their math and/or that they like you a whole lot and want to keep you, so that the money situation can be sorted out in your favor.</p>
<p>Guess it’s just the school being lazy in their policy-making. The fact that we’re comparing an improvement in the logistics and operation of a school to the haphazard development of biological evolution makes me want to cry =P. Humans are not able to point themselves to a road of self-improvement, but rather struggle randomly until an arbitrary improvement happens to occur? That’s really disappointing.</p>
<p>If you fall into one of those pockets where every extra penny you earn comes off the financial aid or more, then you should structure your earnings to maximize the aid you receive. It is rare, but it can happen. Make sure, however, that you will get additional aid when the income is decreased and that it does not come in the form of self help such as loans or work study unless you want that.</p>
<p>So in the end, my father has no option to improve our current standard of living? And we have to join the ranks of those who manipulate the system at the cost of others? If we’re all leeching off of each other, who knows, maybe we’ll eventually reach an equilibrium that works…</p>
<p>If I can’t get them to reconsider the financial aid package, I’ll make sure to go public with my findings about the particular school I attend so that unfortunate middle-class souls don’t fall victim to this worthless system, attracted to the school and its “prestige” like moths to a flame . I find it hard to believe one of the best schools in the region (and even the nation) is this pathetic.</p>
<p>In any case, thanks a lot for the responses, everyone!</p>
<p>If your college does not guarantee to meet full need of accepted students, they can structure how they give their financial aid any way they choose.</p>
<p>I know you feel cheated right now…but as cpt pointed out…there could be other benefits to having a second job. Is there the possibility that this will be something that can help your family AFTER you (and the sibs) graduate from college? That would be self improvement for the long term…not just the short term.</p>
<p>Another thing…if you are at a school that doesn’t meet full need, it is possible that your institutional need based aid would have been LESS anyway. In some cases, schools do reduce need based aid to returning students. AND many schools also assume a higher student contribution in subsequent years which would also reduce your need based aid award (and this can be several thousand dollars).</p>
<p>I find it difficult to believe this also. I would be interested in finding out what formula is being used so that every additional cent earned goes to college costs. The only time that might happen that I have seen is when certain cliff programs are involved where the additional monies throws the student into a category where he no longer qualifies for the award. That can happen if you are getting funds contingent on being PELL eligble, for instance, and if you cross that line, you not only lose the little bit of PELL, since it is a graduated, not cliff program, but you lose other grants because you have to be a PELL kid to get them. That can happen in a number of situations in life. Someone sets up a program where you get, say the minimum award of $5K but your family has to make under $60K to get it. Your family makes $61K and out you go. </p>
<p>The FAFSA simpllified needs test can work that way as well. If you suddenly need a 1040 that year, you can lose that automatic zero EFC and can then lose PELL and all other contingent grants. </p>
<p>Do talk to your financial aid office, but sometimes you do hit a niche where there isn’t anything that can be done. If there is a program set up that way, and it does distribute money, you take it. It may hurt far fewer people than it helps.</p>
<p>I’m exploring potential mistakes in FAFSA and something that may have been lost in translation along the way. I find it hard to believe as well, which is why I was expressing my incredulity of the legitimacy of this sort of system, and if it wasn’t actually happening to me in person (where my school wanted $8k last year and now demands $24k) I’d say someone made a clerical error.</p>
<p>@Thumper, I was talking about this to a couple of friends, and if the second job was something that provided benefits and raises, it would certainly be silly to discontinue the job simply because of the current lack of remaining income, but this is one of those grunt-jobs that pay well only because of those unfavorable conditions (guard-job duty at ungodly hours) and so the only benefit is the immediate and temporary boost in income, the benefits of which is completely eliminated by the spike in school costs. So everything points to “drop the job for now,” unless the school really does sort out this mess.</p>
<p>Just awaiting responses from our school’s financial aid office. I’ll walk in there if they don’t respond within a reasonable timeframe.</p>
<p>FWIW, mlcloud, this happens in a lot of things in life. Many uninsured young adults we knew would get their hospital care through Medicaid because they earned so little money. When they were put on their parents insurance with the new health rules, they suddenly had insurance, but with co pays, deductibles, maximum payment amounts, non contract providers, could rack up huge expenses that they now owed but could not pay. Crazy? Yes, but that is the way it works. If you have money, it goes into the pot, and if you don’t, you qualify for Medicaid to pay it. Works for nursing homes too. I have a MIL who could spend every bit of her money for nursing homes or if she didn’t have it, would get the same home for just her Soc sec check. It’s the way the system is set up.</p>
<p>Is this a school that promises to meet need? It doesn’t sound like it because you say that now there are two in school, yet your “contribution” went up a lot…even tho income didn’t go up a lot. </p>
<p>What school is this?</p>
<p>Did the income go up to a point that you no longer qualify for “state aid” or some other aid? I know this happens in Calif with their stupid Blue and Gold policy…if you make 1 dollar over $80k you lose the promise…even if you add another child in college. Crazy.</p>
<p>cpt, the more I learn, the more I don’t know what to think about the world anymore. I came to school to make sense of things, and the further I go I just simply learn that more things don’t make sense! It’s funny how all of this works.</p>
<p>@mom2collegekids, this isn’t a school that promises to meet, unfortunately. My mom does not work and devotes most of her time to religious work. And yeah, I find it strange the costs increased so much when our family circumstances have changed in various, unpredictable ways. </p>
<p>I did not want to list the school in case some google search finds its way here and sees me criticizing the school, but it is Johns Hopkins University. I’m hoping they will reconsider my aid package, even if it consists of making corrections to FAFSA or making me a special case.</p>
<p>Does JHU have an online net price calculator that you can play around with? I have done this with various schools - seeing what a sample FA package would look like at various levels of EFC so that I can see if there is a point beyond which additional income hurts more than it helps.</p>
<p>I actually agree with your hypothesis about FA providing somewhat of a disincentive to increase income. To me - it feels like one step forward and one step backwards - you get a raise or bonus - which would normally be a good thing - and the result is your FA drops the following year - meaning you have a higher taxable income but less FA - so the net result is generally worse on your bank account.</p>
<p>If it is an internal glitch in their own calculators that causes this, perhaps, it can changes, as financial aid officers have a lot of leeway, especially with their own formulas. But if it is a hard and fast policy involved, there may be no recourse. As one of the posters said, if you go over a certain income level, some programs drop out, and a school may not opt to pick up that slack.</p>
<p>I’ve seen some crazy formulas that top schools have in place. BC won’t meet full need if your FAFSA need exceed their definition of need. UCh insists on sticking a student with whatever s/he happens to have in assets that first year for all four years. </p>
<p>Since I don’t know what particulars are involved, and it appears as though there were several changes occurring this year, you will have to go over this with the financial aid officers to find out what the exact issue is and if the school is going to insist that every cent your family makes goes towards your cost. If it does, then your family has to make that decision as to whether the sweat equity is worth it. </p>
<p>Do also be aware that most all schools do put an increasing financial burden on the student each year. That is partly why the Stafford loans are increasing in amounts by student year. The student is often expected to come up with more funds from work or loans and take on more of the financial responsibility of college.</p>