I understand the rationale behind many financial aid policies/promos, but I also feel they perpetuate some bad practices for those who are in the top 10-15% of household earners (as $200k is at the 89th percentile of household income, per this source).
A 6-month emergency fund is the recommendation for people with dependents which is the group that soon-to-be college parents would fall into. So, they should have an emergency fund of very nearly $100k, and if they’re in a field with a variable income (freelancers or working on commission), then a 9-12 month emergency fund is recommended (so $150-200k).
This does not take into account saving for future needs. If a family prefers to save in advance for a car rather than needing to pay interest on a car note, then that should be considered separately from the emergency fund. Depending on how old their previous vehicles are, they may be close to the cost of new cars in their savings. So if they were on the Honda Civic/Toyota Corolla price range (i.e. not luxurious vehicles), they may have another $50-60k in the bank to replace two aging cars (and inflation is real in the car market).
Having enough money in savings to pay for healthcare deductibles, which is not an “emergency” but a known type of expense that will come up is also going to fall outside of protected retirement vehicles, but is a recommended financial practice as well.
So it is very feasible that simply by following some best financial practices, families earning less than (but nearish) $200k will have assets exceeding the “typical” ones. But if they prefer to fly by the seat of their pants with no emergency fund and being one accident or layoff away from disaster, then they would pay nothing for tuition.
The median sales price in the U.S. as of the 4th quarter of 2025 was $405,300 (source). So if a family with an income in the high $100s has a median value house, they can’t have more than $100k in assets for Colby. And since their income is well above the median, there’s an excellent chance the cost of their house is, too, in which case they have too much in assets for Colby (but it’s the family’s choice whether to spend more than the median). But this essentially means that a family can’t have a median value house and an emergency fund of appropriate size and qualify for the “deal” that Colby offers, as that would not be considered “typical” assets.
And this says nothing about the schools that exclude home equity when families decide to spend a much larger portion of their income on a house, even if it’s much larger than what might be financially advisable, and then those families get that extra equity excluded even though they often will choose to sell their house and downsize into a less expensive place once the kids graduate, pocketing that extra equity into liquid accounts.
Moreover, if a family has a senior in high school, one would hope that they had been saving some money for college in advance, but this will count against the “free tuition” offers. So families who spent every last dollar on expensive family vacations or designer labels or whatever and never saved for their kid’s education are rewarded by having “low” assets while the families that saved instead are penalized.
Suffice it to say, I’d much prefer that colleges increase their definitions of “typical” assets and lowered the income thresholds so that families would be incentivized to have healthy financial habits than to have a high income threshold with financially unhealthy asset limits in order to access their most generous financial aid offers. Of course, they’re private institutions and can do what they wish, but that would still be my preference.
/Rant over