What You Don’t Know About Financial Aid (but Should)
Colleges typically want, in addition to a share of parents’ incomes, about 5 percent of the value of their assets, plus 20 to 25 percent of the students’ (Penn settles for just 5 percent of student assets). But there are differences in how colleges define assets. Cornell, Stanford, Columbia and Duke, for example, take into account home equity.
.. In addition, the Common Application used by more than 500 colleges asks prospective students to check a box if they intend to apply for financial aid. Some independent admission consultants advise students not to check it — to wait until they are admitted before giving the college any hint they will ask for aid.
.. The promise of need-blind admission, no matter how genuine, usually has an even more profound drawback: Many colleges accept students who can pay only a fraction of the price, but most do not guarantee enough aid to make up the difference.
.. Adding to the confusion, colleges and the government label some federally subsidized loans as aid but not others, and not private borrowing. In addition, colleges find part-time work-study jobs for hundreds of thousands of needy students. Those earnings, too, are counted as aid. Should a job — with the same hours and pay as, say, a Starbucks barista — be considered aid?