FAFSA gripes

[surprising]

Next year I will be fully retired with no wage income. I've filled out the FAFSA estimate tool for next year and it came up with $85K family contribution with best-case $0 entered for income. I don't think the FAFSA takes into account early retirement folks like us very well. Few issues I see:

1. Value of rental properties needs to be included in assets. That's not very liquid, do they expect us to sell rental properties to pay for college? Perhaps a better metric would be rental income received.
2. No way to fill in expected expenses for the year.
3. Since I'm ER'd, there are a lot of taxable investments that are set aside to pay for expenses for the next 8 years before I turn 59.5 and can tap retirement accounts. FAFSA doesn't know this, so they just see a big pile of money.

I've put one daughter through college and another has 1 year to go. I was hoping for at least 1 year of federal assistance after all the money I paid so far for college out of pocket.

 

[athena53]

My parents cheerfully told us we wouldn't qualify for needs-based scholarships because they'd saved for our educations. When DS was a HS senior in 2003 I used a calculator on Princeton U.'s site to estimate what my contribution would be. I was making $110K/year at the time and had a $250K mortgage. The result was that not only could I afford to pay in full for one kid at Princeton, I could afford to pay for two.

Sure, if I lived on rice and beans and stopped saving for retirement. DS ended up going to Drake in Des Moines after we relocated form NJ to KS. Drake cost about half what Princeton did and my ex-SIL paid half (not requested but much appreciated). I cash-flowed the rest.

 

[GrayHare]

I don't understand something about FAFSA. I see some college data claiming that on average financial aid covers 80% of their tuition. That 80% can be $40,000 per year. Sounds high. Where is that money coming from? Are students working on campus to earn that much?

 

[ivinsfan]

LOL ...they don't give 2 hoots what your "expenses" are and why should they?

Wage income is just one part of your income, if you have rental income that is income.
A property you don't live in is an investment, just like any other investment.
You have a large pile of non retirement assets, and a part of that pile they expect to be used for your kid and their college expenses.

In contrast to ACA subsidies FASFA can be a real wake up call...

 

[ivinsfan]

No... colleges often have access to BIG piles of money to give out to in need students. Some of them will work but many of them qualify for extra money. However I will say in a lot of cases the income of the students family is one factor they look at.

 

[surprising]

The new thing is colleges offering free tuition for family income less than some amount. MIT is < $200K, Reed college near me in Portland is free with < $100K for Oregon and Washington residents.

 

[SecondCor521]

Universities are more and more doing a thing where they raise their prices and then hand out "scholarships" (aka discounts). This has several effects:

1. You think it must be a great school because they charge $60K a year. More applicants, thus a better applicant pool.

2. Some families will end up paying $60K a year. Helps the school's bottom line.

3. Your kid thinks they are cool/amazing/impressive because they got a $20K a year scholarship. The school didn't come up with $20K from some big pile of money, they just discounted their price somewhat to get your kid to come there.

 

[surprising]

Universities are more and more doing a thing where they raise their prices and then hand out "scholarships" (aka discounts). This has several effects:

1. You think it must be a great school because they charge $60K a year. More applicants, thus a better applicant pool.

2. Some families will end up paying $60K a year. Helps the school's bottom line.

3. Your kid thinks they are cool/amazing/impressive because they got a $20K a year scholarship. The school didn't come up with $20K from some big pile of money, they just discounted their price somewhat to get your kid to come there.

This is another area where people with means end up paying way more than the people without means because the government is willing to step in and help pay for them. Since the government is paying, might as well jack up the prices, which hurt those people with the means to pay. Daughter went to out of state public school that cost over $30K/year for just tuition. Her roommate was in state without much family income and not only was tuition and room and board fully paid, but she also got need based scholarships and had about $2K/month extra. Doesn't seem fair.

I'm not saying there shouldn't be assistance for those that need it. I just wish the cost of things were reasonable so that everyone can afford it.

 

[ivinsfan]

SecondCor I do think some of these schools have BIG piles of money. Some from donors, some from income from their "invested" donor funds...college costs and funding are kind of like making sausage...you don't want to look too closely in case you see something "odd". But the sticker price is definitely too high.

 

[ivinsfan]

This is another area where people with means end up paying way more than the people without means because the government is willing to step in and help pay for them. Since the government is paying, might as well jack up the prices, which hurt those people with the means to pay. Daughter went to out of state public school that cost over $30K/year for just tuition. Her roommate was in state without much family income and not only was tuition and room and board fully paid, but she also got need based scholarships and had about $2K/month extra. Doesn't seem fair.

I'm not saying there shouldn't be assistance for those that need it. I just wish the cost of things were reasonable so that everyone can afford it.

Well in your case going to an out of state school was a choice. An instate public school is getting money from taxpayers so its reasonable that you would pay more over an in state student.

 

[SecondCor521]

SecondCor I do think some of these schools have BIG piles of money. Some from donors, some from income from their "invested" donor funds...college costs and funding are kind of like making sausage...you don't want to look too closely in case you see something "odd". But the sticker price is definitely too high.

Sure. Most of those are probably schools people can name.

The school knows their endowment, what it costs to educate a student on average per year, and their sticker price. On average, it might look like a $60K sticker price, $25K to educate the student per year, $20K of which comes from the student and $5K from the endowment.

My point is that the $35K difference between the sticker price and the actual cost to educate the student is just discounting and not actual money being used / spent / moved anywhere.

It's similar to Chevy trying to sell you a new Silverado pickup truck for $80K and giving you $35K in "holiday incentives". And a $35K kidney stone removal procedure that the insurance company only pays $6K for.

 

[ivinsfan]

Sure. Most of those are probably schools people can name.

The school knows their endowment, what it costs to educate a student on average per year, and their sticker price. On average, it might look like a $60K sticker price, $25K to educate the student per year, $20K of which comes from the student and $5K from the endowment.

My point is that the $35K difference between the sticker price and the actual cost to educate the student is just discounting and not actual money being used / spent / moved anywhere.

It's similar to Chevy trying to sell you a new Silverado pickup truck for $80K and giving you $35K in "holiday incentives". And a $35K kidney stone removal procedure that the insurance company only pays $6K for.

Sadly I'm hard pressed to think of anything that isn't sold or marketed in this manner. And yes the cost is the cost no matter what they call it. Although I think we might be surprised by how low your 25K example is, but I guess we'll never know the ACTUAL cost to educate a student, pretty sure that's a trade secret.

 

[Texas Proud]

I don't understand something about FAFSA. I see some college data claiming that on average financial aid covers 80% of their tuition. That 80% can be $40,000 per year. Sounds high. Where is that money coming from? Are students working on campus to earn that much?

There are a number of colleges that have a big enough endowment that they could not charge any student tuition and be just fine...

Rankings | Largest college endowment per student - Highest endowment per student

Want to know the best colleges for 2025? Raptor® ranks colleges in over 20 different categories. Check out all our 2025 rankings here!

www.collegeraptor.com

 

[RetiredHappy]

You have the means to pay for your children's education and that's what the calculations show. You also chose to retire early. As parents, we are financially responsible for our children. "Others" shouldn't be paying for your children's education if you are financially able to. I don't see any reason to gripe over fafsa numbers.

 

[athena53]

I don't understand something about FAFSA. I see some college data claiming that on average financial aid covers 80% of their tuition. That 80% can be $40,000 per year. Sounds high. Where is that money coming from? Are students working on campus to earn that much?

Sometimes "financial aid" includes loans.

 

[SnowballCamper]

Is there a website that translates the new FAFSA score to the old expected family contribution number? The current FAFSA gives a "student aid index" and grant/loan eligibility, but not an expected contribution number in the submission summary.

Griping here for more federal assistance when you don't quality seems a bit out of touch. Maybe just take out loans and petition the government to forgive them in the future...

I do concur that there is a serious policy problem where the government effectively subsidizes higher education institutions that clearly don't need the subsidy.

 

[FlaGator]

I don't understand something about FAFSA. I see some college data claiming that on average financial aid covers 80% of their tuition. That 80% can be $40,000 per year. Sounds high. Where is that money coming from? Are students working on campus to earn that much?

I saw a few of those "packages" with my two from the private schools they applied to. They all included student loans. Yeah, it's "financial aid", but not the kind I taught them to accept. Both ended up at Florida public unis.

 

[FlaGator]

This is another area where people with means end up paying way more than the people without means because the government is willing to step in and help pay for them. Since the government is paying, might as well jack up the prices, which hurt those people with the means to pay. Daughter went to out of state public school that cost over $30K/year for just tuition. Her roommate was in state without much family income and not only was tuition and room and board fully paid, but she also got need based scholarships and had about $2K/month extra. Doesn't seem fair.

I'm not saying there shouldn't be assistance for those that need it. I just wish the cost of things were reasonable so that everyone can afford it.

Nothing unfair about, IMO. Taxpayers fund their state universities primarily for the benefit of residents, not out-of-state students. True that non-residents help cover the costs.

OTOH, I have friends in CA where that state has failed to increase the size of the UC system to accommodate the growth, leaving the CSU system overloaded as well. The result is resident kids are often not admitted, even if in the top range of their class. Two of their kids went to Arizona (at a ridiculous price), one received an athletic scholarship to CO State, one ended up at a military academy.

I considered sending my kids to Arizona as their mom and I are alums. I declined due to the price - $50-60K/yr for non-residents. Clearly Arizona, Arizona State and several others are taking advantage of the underfunding of quality schools in other states. Sad to see that happen. I'm glad FL is doing a better job keeping up with demand, although the admission standards have been raised substantially for the top 4 schools in the last several years

 

[Texas Proud]

You have the means to pay for your children's education and that's what the calculations show. You also chose to retire early. As parents, we are financially responsible for our children. "Others" shouldn't be paying for your children's education if you are financially able to. I don't see any reason to gripe over fafsa numbers.

And this is where I disagree... we like to help out but we have no legal requirement to send them to college... they are adults and should be responsible for their lives...

Also, not all parents do want to help... I had one coworker ask his kid if he wanted to go to college... kids said 'yes'... Dad said 'good luck with that'...

A couple of my DWs friends are divorced and their dads have zero interest in paying for their DDs college.. and the new husband also has zero interest in paying for someone else's kids when the dad can easily afford it (one is a lawyer)...

 

[donheff]

And this is where I disagree... we like to help out but we have no legal requirement to send them to college... they are adults and should be responsible for their lives...

Also, not all parents do want to help... I had one coworker ask his kid if he wanted to go to college... kids said 'yes'... Dad said 'good luck with that'...

A couple of my DWs friends are divorced and their dads have zero interest in paying for their DDs college.. and the new husband also has zero interest in paying for someone else's kids when the dad can easily afford it (one is a lawyer)...

So, what's the answer? We could adopt a model where some level of tuition is covered for all kids who can qualify for admission. We can wag our fingers at the parents you describe who don't give a sh** about their kids, but let the kids fend for themselves. Or, what?

 

[RetiredHappy]

And this is where I disagree... we like to help out but we have no legal requirement to send them to college... they are adults and should be responsible for their lives...

Also, not all parents do want to help... I had one coworker ask his kid if he wanted to go to college... kids said 'yes'... Dad said 'good luck with that'...

A couple of my DWs friends are divorced and their dads have zero interest in paying for their DDs college.. and the new husband also has zero interest in paying for someone else's kids when the dad can easily afford it (one is a lawyer)...

Didn't you bring them into the world? It is not a legal requirement to send them to college but you chose to have them. They didn't ask to be born. I didn't ask them to be born. When applying for FAFSA, it should absolutely consider parents' means of paying for their college education. Your children are not other taxpayers' responsibilities.

In your example, just as you have indicated, my position is no different from having the biological parents pay for their children's education.

 

[surprising]

Nothing unfair about, IMO. Taxpayers fund their state universities primarily for the benefit of residents, not out-of-state students. True that non-residents help cover the costs.

Another gripe. My daughter, for all intents and purposes, lived in that state from sophomore year on. She had apartments 12 months a year, she worked to pay for rent and food and used 529 money for tuition. However, she was unable to apply to become a resident because she was there primarily for school. After graduation she got a job in that state. Yet, even today she wouldn't be able to go back to that school as a resident because they require at least 12 months of non-school residence (she graduated this year).

 

[Sunset]

OP - Maybe you need to move to the other State if going to some out of State school is so important and funds are tight.

Or maybe have your child apply to the College of the Ozarks, where tuition can be free. We have toured there a few times and talked to some students. Some even from other Countries, all that we talked with have gotten free tuition (with doing 15 hours works per week at the College).

https://www.usnews.com/best-colleges/college-ozarks-2500

 

[Texas Proud]

Didn't you bring them into the world? It is not a legal requirement to send them to college but you chose to have them. They didn't ask to be born. I didn't ask them to be born. When applying for FAFSA, it should absolutely consider parents' means of paying for their college education. Your children are not other taxpayers' responsibilities.

In your example, just as you have indicated, my position is no different from having the biological parents pay for their children's education.

Do not get on my case... I paid and am paying for my kids college... I am just saying that it is not, nor should it be, a legal requirement for parents to fund their kids college.... college is not a 'right'... it is a decision students make to hopefully get a better job (as we see, that is not always the case)...

Society has determined that K-12 should be free... we all pay taxes for this right... after that it is the decision of the kids what to do... some go into the trades and some go to college.. society leans that it is the parents job to do so... but it is not universal...

Also, the current system says what they think the parent SHOULD contribute but there is no requirement to do so... I do think there is a way for a student to get out of the parent being considered if they do not help.. I have heard about it but do not know much...

The student themselves can always get loans etc. to pay... I have a nephew who became a Dr and had $500,000 of debt... he has now worked it off.. parents had little at the time so did not help...

 

[RetiredHappy]

Also, the current system says what they think the parent SHOULD contribute but there is no requirement to do so... I do think there is a way for a student to get out of the parent being considered if they do not help.. I have heard about it but do not know much...

The children can disown their parents.