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View Diary: According to USA Today's logic, you should ask your boss for a pay cut (122 comments)

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  •  I had a relative who just went through (0+ / 0-)

    trying to get college financial aid.  And several friends who are as well.  It's not a hypothetical.  

    There's a formula that supposedly figures out, after necessities like food, shelter, clothing, etc., how much a family is "supposed" to be able to contribute to a child's college education, (it's called the EFC) and that's the basis of financial aid.   Cross over the six figure line for household income (remember, that can be two people working), and they pretty much expect the family to pay for it all.  

    •  Okay -- quick and dirty comparison. (0+ / 0-)

      And let's remember the point of financial aid -- to assist the neediest of students.

      There are two criteria: available assets and net income (excludes payroll taxes) for both parents and the student.  To keep it simple, the student has no assets or income, and the family size is three.

      finaid quick calc

      1) Parent(s) $50,000 assets and $50,000 income.  EFC=$4,047.  Probably qualifies for a Pell Grant (maximum $5,550).

      2) Parent(s) $75,000 assets and $75,000 income - EFC- $12,712 (probably doesn't qualify for grant)

      3) Parent(s) $100,000 assets and $100,000 income - EFC $21,972.  (probably doesn't qualify -- 10% of SUBSIDIZED Stafford loans are awarded to those in the $100,000 plus income category)

      With 50% more in assets and income, the additional EFC for #2 is $8,685.

      100% more - additional EFC is $17,925.  

      Doesn't look as if the higher wealth and income families are getting a raw deal in comparison with low wealth/income families.  I personally would submit that that $4,047 EFC is more dear to family #1 than $21,972 is to family #3.  

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