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The Cost of College. Public - $10K to Private
- $40K
Presented By: Michael Lopata CPA, CCPS The Cost of College. Public - - PowerPoint PPT Presentation
Presented By: Michael Lopata CPA, CCPS The Cost of College. Public - - PowerPoint PPT Presentation
Presented By: Michael Lopata CPA, CCPS The Cost of College. Public - $10K to Private - $40K Undermatching and Overmatching in college enrollment Largest sources of financial aid. $185 Billion. Financial Need=COA EFC
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Paying for Private University at the cost of a
Public University
Focus on desired outcome – Payscale ROI 4, 5, and 6 Year Grad Rates – 27% vs. 48% Types of Scholarships Loans to Pay for College Academic Fit to Financial Aid Student Positioning and Financial Fit IN THE NEWS – Converse College announced that
it was cutting its tuition for next year by 43%.
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- 2. A Georgia student majoring in business can study Coastal
Environmental Science at which of the following colleges and pay in- state tuition:
- a. University of Florida
- b. West Virginia University
- c. Louisiana State University
- d. Mississippi State University
- 5. Which of the following colleges has the highest average financial aid
package?
- a. Furman University
- b. Davidson College
- c. Rhodes College
- d. University of the South
- 6. Which of the following would be included in financial aid income for
the FAFSA?
- a. Contributions to or payments from flexible spending accounts
- b. Loan Proceeds
- c. Current year retirement plan contributions
- d. Employer Education Assistance Plan
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- 11. The FAFSA (Free Application for Student Aid) has an asset protection
allowance that allows individuals or families to exclude a portion of their assets from the financial aid calculation. The allowance is based
- n the older parent. The asset protection allowance for a 52 year old
that is married is:
- a. $65,900
- b. $49,200
- c. $38,500
- d. $17,235
- 12. Assets that are reported on the financial aid application are
reported as of what date?
- a. Year End
- b. Latest Statement Date
- c. Date of Signing the Application
- d. Date of Filing the Application
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AGI-Adjusted Gross Income Federal Methodology Institutional Methodology $50,000 $3,228 $2,694 $75,000 $10,076 $8,227 $100,000 $18,225 $13,770 $125,000 $25,316 $19,559 $150,000 $33,817 $27,863 Family of 4 with one child in school
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AGI
FM 1 student FM 2 students IM 1 student IM 2 students $50,000
$ 3,228 $ 1,646 $ 2,694 $ 1,724
$75,000
$10,076 $ 5,139 $ 8,227 $ 5,265
$100,000
$18,225 $ 9,295 $13,770 $ 8,812
$125,000
$25,316 $12,911 $19,559 $12,518
$150,000
$33.817 $17,472 $27.863 $17,832
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FAFSA A Data for Family 1 1 a and 2
Student cash/investments $1,000 Student AGI $300 Parent AGI $25,000 Father’s income from work $5,000 Mother’s income from work $20,000 Nontaxed income $2,700 Parents’ cash and savings $1,000
Nonta taxed ed Income come – Famil mily 1 Disability $1,200 EIC $1,500 Rent payment $800 Prior year income $45,000
Nontaxed ed Income – Family 2
Tax-exempt interest $2,700 Parent investment in sibling’s name $150,000 Business net worth $200,000 Home value $900,000 Home debt $600,000 Mortgage payment $3,600 Prior year income $250,000 Famil ily 1 Famil mily 2 Federal Methodology – FM $645 $645 Institutional Methodology
- IM
$250 $24,071 Fee-Waiver Designation Yes No
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Award Letter Results:
- Hiram University, Hiram, OH
initial award letter of $5,000/yr
- FAFSA submitted
Updated award letter of ½ tuition waiver and opportunity to earn other ½ from scholarship competition.
- College of Wooster, Wooster, OH
Initial award letter of $15,000/year
- A private education is now at parity with many large,
public universities.
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The student was invited to Hiram for personal interview and scholarship competition.
Results: The University President called him and
- ffered a full tuition waiver for 4 years.
Special note: this is unusual in the current world of college funding. “Full rides” are VERY infrequently seen.
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Increase your financial aid award by 15% by
having 2 or more competitive offers.
Selecting competitive schools. Example:
GWU – Marquette, Univ. of Rochester, Univ.
- f Miami, American Univ.
The FAFSA gives schools a view of where
they rank in regards to your interest.
Pay attention to the timing of your filing
date.
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School Home Equity Additional Info.
Wake Forest, NC
2x income Use NC Profile
Rice, Tx
2.5x AGI Use NC Profile
Elon, NC
100% No NC Profile
Amherst College
1.2x AGI Use NC Profile
Duke, NC
1.2x AGI Use NC Profile
Brown, RI
3x AGI Use NC Profile
Let’s compare Elon against Amherst. Using the chart for $100,000 income w/$400K equity, Elon will expect a family to contribute $15,680 more per year. A calculation of financial aid eligiblity is as follows: Elon – COA $43,546 less EFC $36,170 = Financial Need $7,376 Amherst – COA $62,544 less EFC $20,490 = Financial Need $42,054
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Take control of your capital gains,
distributions, and liquidations at year end.
Conversion of IRA’s to Roth IRA’s may result
in excessive income.
Cancelling life insurance policies. $20,000
Gain results in $10,000 in financial aid.
Surrendering annuities can increase reported
income.
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Lassiter High GPA – 4.125 Weighted SAT – 1710 Expected Family Contribution
- Federal Methodology - $8,200
Institutional Methodology - $22,150
College Selection
- University of Georgia
- Georgia College and State University
- Auburn University
- Virginia Tech
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Chattahoochee High
GPA – 3.77 SAT – 2270
Expected Family Contribution
- Federal Methodology - $21,800
Institutional Methodology - $36,970
College Selection
Williams Yale Brown Swarthmore
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Paying for college is the most complex financial transaction a family will make. More complex than buying a house. More complex than getting a car loan. The reason is the escalating costs accompanied with the variety
- f systems that must interact to get to the
difference between price and cost.
- Dr. Joseph Moore, President of Lesley
University
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