I used the online EFC Estimators of Yale’s and Harvard’s. I found Yale’s estimator includes the equity of parent’s primary home while Harvard’s excludes the primary home from the parents assets. Consequently, the EFCs of the two colleges are very different if a student’s parents own a primary home, especially when the mortgage principal is low.
Can any one comment if the online EFC Estimators of the two colleges are good estimators?
One of my children went to Yale, the other to Harvard – and yes, the on-line EFC estimators for HY are pretty much accurate, so long as you input accurate information and understand how financial aid offices look at income and assets. Aside from home equity (Yale includes home equity in your primary residence, while Harvard does not, so if you own your primary residence Yale is going to be more expensive than Harvard), both colleges add back CURRENT (not past) contributions made to a retirement account to your overall gross income. I guess the theory is that parents don’t have to contribute to a 401K while their kids are in college, but could use that money for educational purposes. I never understood the logic in that argument, but that’s the way most financial aid offices do it.
@gibby thanks for the explanation. About adding back the contribution to retirement accounts, it is tricky for colleges to calculate/add correctly. In FAFSA and CSS, we enter parents’ income and AGI (adjusted gross income) as well. Do they add the retirement contribution back to parent income?
I have W-2 income, my 401K contribution reduces my W-2 income, so it is fine to add the 401K contribution back to my income. On the other hand, my wife is self-employed and makes contribution to her SEP-IRA. Her business income reported on form 1040 is all she makes (is not reduced by SEP-IRA contribution). So it is NOT correct to add her SEP-IRA back to her business income.
I’m not trying to cloud the issue but it is interesting to note that Yale offered my kid quite a bit more in financial aid than Harvard, given the home equity considerations.
SEP is an adjustment to income. Line 32, I believe, on the 1040. There’s a line on CSS where you enter contributions to SEP. It will be added back in to her AGI.
@Boswind: Yes, the financial aid office adds back your retirement contribution to your AGI. I’m not sure how the financial aid office deals with the self employed, but I assume retirement contributions are also added back. You could call Yale’s FA office and ask.
@Jon124: Good for you! Financial aid is anything but transparent, which is why I posted additional details in another post
Just curious what you think is NY’s flagship state school. Binghamton? Cornell contract colleges?
@Brantly: As SUNY Binghamton is the number-one ranked public university in New York State, I consider it to be NY’s flagship state school! I believe SUNY Binghamton considers themselves that as well.
While I agree that Bing is the (unofficial) flagship of NY, I think Stony Brook is equally well thought of, at least in the STEM fields.