Another Look at Tuition Deals
I enjoyed your article on Special Deals on College Tuition. Is the low-income test to qualify for free tuition also based on your overall net worth as well?
Even though these schools are offering to cover families' costs as long as they earn less than about $35,000 to $60,000 per year, the calculations are actually more complicated than that.
The colleges generally consider income first but then also look at assets -- so rich people without regular jobs don't try to take advantage of the system. Harvard, for example, counts taxable as well as non-taxable income then considers assets on a case-by-case basis -- including home equity and retirement and other savings. The University of North Carolina at Chapel Hill uses adjusted gross income as the first test (200% of the poverty level, which is now $37,000) then looks at assets such as home equity and some savings.
Even though the actual calculations are more complex, the schools started publicizing the income limits as a way to let people know that this financial aid is available. Most of these colleges always provided generous financial aid -- about 50% of Harvard's students receive some need-based grant aid, for example -- but many people didn't realize how much help they could get. "We needed to speak about our financial aid program in a simple, clear way in order to recruit talented students from low-income families who weren't applying because they didn't think the aid was available," says Sally Donahue, director of financial aid at Harvard.
Don't worry too much about the specific limits. You don't need to apply separately for these programs. You just need to submit the standard aid forms and may get a hefty aid package even if you don't get the full ride. About 1,000 families earning $100,000 or more still get need-based grant aid at Harvard, says Donahue. UNC-Chapel Hill meets 100% of families' need for everyone -- it's just that families with more money might have more loans in their financial aid packages.
The toughest part for most of these programs: You need to get accepted into the school first -- quite a feat when Harvard accepts fewer than 10% of its applicants.
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