I reviewed this page three weeks ago, and I decided that my references to inherent NPC variability here are accurate but confusing. I will re-write it soon, but not until I've published a few paragraph explaining NPC variability on my new "Top Topics" page. I am sorry that, due to the death of a close relative, this process has been delayed. I will complete it as soon as my schedule allows, and you will know it's complete when this red note is gone.
Notes: 1. This page takes a look at the Obama family's college search for their eldest daughter last year, and I'm leaving it up because it illustrates the key points you are learning about in this website. The college cost and aid data are still numbers from 2015/2016, and they aren't much different from the current data except for the aid for nonresident students at Berkeley, which really dove this year - see the Bad News Section near the top of my Examples & News page. But Berkeley's need-based aid for nonresidents has been so weak in recent years, that there was no chance a nonresident student who read this site and needed aid would choose Berkeley anyway. 2. This a good time to mention that bane of financial aid officers, the election year ideas of politicians. Senator Sanders won't stop pushing free tuition at state universities, an idea that would obviously be regressive as applied. But, beyond that, let's look at Senator Sanders' own education. He didn't graduate from a state school, he graduated from the University of Chicago, one of the top universities in our country and a school with one of the most generous financial aid programs in America. And, while still in office, President Obama pushed free community college tuition, but obviously community colleges were not the right choice for his own daughter as they were not the right choice for President Obama himself when he was a student. Although his family didn't have much, Barack Obama spent his first two years at Occidental College, a high quality and generous school in Los Angeles; and he spent his last two years at Columbia University in New York City, again a top university which is also a remarkably generous school. I doubt that Columbia's generosity has changed much since President Obama studied there, and let's take a look at an Apples-to-Apples analysis of Columbia at both of our income levels for the last three years.
So, the takeaway is that good students can go to good schools, whatever the economic background of their families might be. It was true back when President Obama and Senator Sanders went to college, and it is even more true today.
THE FIRST FAMILY'S COLLEGE SEARCH
Our President and First Lady's eldest daughter applied for admission to college last year, and we can use the First Family's college search as an example of how college costs really work. I saw an article last spring saying that the Obamas' eldest was actively considering two schools in California - not the first time that's ever happened - and that she had narrowed her choice to Stanford University and the University of California at Berkeley. I don't know how her search worked out, but it provides a great platform for understanding the primary theme of this website.
NOTE: THE COMPARISONS ON THIS PAGE SHOW 2015/2016 AMOUNTS FOR COSTS AND AID, AND THE GRANT AID AMOUNTS AVAILABLE TO MIDDLE INCOME NON-RESIDENT STUDENTS AT UCLA AND BERKELEY HAVE GONE DOWN SIGNIFICANTLY IN THE MONTHS SINCE I WROTE THIS PAGE.
Now, the Obama family earns way more than $300,000 per year, their eldest will be their only child in college next year, and I doubt the Obamas suffered any significant business losses last year. So, the Obamas are among the small percentage of American families who are going to pay the "sticker price" at even the most generous colleges in America. Let's take a look at some examples of what that meant last year for a selection of California schools:
As you review that table, you will see that it probably confirms all your preconceived expectations concerning college costs. All the schools are expensive, and the privately-funded schools are more expensive than publicly-funded schools. Looking at the numbers for the Obama family's two target schools, we see that Stanford costs $6,274 more than Berkeley per year, equaling an expected difference of $25,096 over four years. But let's change the facts a little and see what it does to the data. Instead of getting into politics, let's say that the Obamas stayed in Chicago and that Barack Obama kept working for community service agencies as he once did. Obviously, the Obama Family would not have changed at all. They would be exactly the same people with exactly the same intelligence and with exactly the same goals for the educations of their daughters. The only thing that would have changed is their income. So, let's assume that their adjusted gross income dropped from the stratospheric range to the middle range for Illinois. Specifically, let's assume their family income was $60,000 last year, an amount that's a little higher than our national median household income but right in line with Illinois - along with California, Colorado, Minnesota, New York, Washington, and a number of other states. And let's assume that the Obamas' financial data exactly matched the data listed for my sample family at the $60,000 income level. What difference would that make? Plenty, and a lot more than you might think, but I need to remind you about the analytic basics for this website before I show you the numbers:
To assure accuracy and consistency in my comparisons, I have established two sample families, one with an income of $60,000 per year, one with an income of $40,000 per year, and full profiles for those families are in Section II ("Input Data") near the top of my Examples page. Since your NPC results will be unique to your family, your results will not be the same as the results for my sample families. And the next table follows the pattern you will always see in this site, with the names of the colleges on the left, the costs and aid for those schools in the middle, and the "Remaining Balance" - what's left for parents to pay or for students and parents to borrow - on the right. The "Student Work" amount of $5,000 assumes a 25 hour per week summer job and an 8 hour per week Work Study job during the school year with both paying $10 per hour. The schools are ranked by the generosity of their financial aid programs at the given income level, with the most generous schools at the top and the least generous schools at the bottom. Finally, I never include any loans as financial aid anywhere in this site. Loans really aren't financial aid, loans are a way to defer the payment of a present cost to a later time while paying an interest fee to cover the amount of delay. So, all the financial aid you will see in this website is loan-free.
So, here are the results for the Obama family at the same colleges, but now assuming that the Obamas stayed in the Chicago area and that Barack and Michelle earned a total of $60,000 last year, roughly the median household income for Illinois. I think you will agree that the Sticker Shock table up above has "gone Biblical."
Well, how about that, ladies and gentlemen? "The first shall be last, and the last shall be first." And what happened to all your preconceived expectations? They flew out the window. Because now all of the privately- funded schools are less expensive than all the publicly-funded schools, and more than half of the schools look workable for a middle-income family, making this table a great introduction to American college generosity. But let's take a closer look at the numbers, concentrating on the Obama family's target schools - Stanford and Berkeley - the top and the bottom schools in the table. Please remember that the grant data in this table is for students who are not residents of California, so the costs would be much lower for California residents at state schools, and the grant aid might be higher for them too, but let's not change the facts. The Obamas really aren't California residents, their daughter really was applying to these two schools, and the table reflects what non-residents at that income level really pay.
Please also note in the table that the Remaining Balance for Stanford looks a little odd because it's a negative number. That's a somewhat rare event in this website. Only 5 out of 130 schools I analyze at the $60K income level and 23 out the same 130 schools at the $40k income level have negative Remaining Balances. They only occur when highly generous schools expect students to earn less each year than the standard amount we use in this site, and negative Remaining Balances are not refunded to students or their parents.
Adjusting for that negative number, Stanford is now expected to cost the Obama family a whopping $34,119 less than Berkeley per year for all four years, meaning that a four-year education at Berkeley is expected to cost a non-California family with an adjusted gross income of $60,000 per year a total of $136,476 more than a four year education at Stanford. Obviously, if the Obamas' eldest daughter chose Stanford and - more importantly - if Stanford concurred, she would graduate after four years with no loans at all. But if she chose Berkeley, the total indebtedness after four years for herself and her family would probably exceed $100,000, and that illustrates the central premise of this website. After the Net Price Calculator requirement went into effect, excessive college costs and excessive college loans became a matter of choice for the American families who use NPC's in their college searches. What constitutes "excessive" is up to the individual family, but I'll illustrate my point by considering typical families. I think that most families would find an annual cash contribution higher than their Expected Family Contribution to be excessive, and I think the same families would find loan amounts higher than the maximum loan amount under the Stafford Loan Program to be excessive too. For our sample family earning $60,000 per year, its EFC calculates out to about $4,500 per year, and the Stafford loan maximum for incoming freshmen is about $5,500 per year, for a total of about $10,000 per year. This means that schools in the $60,000 income table above with Remaining Balances of $10,000 or less are relevant to that family's college search, and schools with Remaining Balances higher than $10,000 are irrelevant to their search because they don't meet that family's affordability standard. Realizing that Net Price Calculator programs have an inherent standard-of-error of about $1,500 per year and taking another look at that table, that makes the schools in that table from Stanford through the University of Southern California relevant to that family's search and the schools from Whittier through Berkeley irrelevant. Specifically, that family can expect no-loan financial aid offers - where its Remaining Balances don't exceed its EFC - at Stanford, Cal Tech, and Pomona College. And that family can expect moderate-loan offers - where its Remaining Balances aren't higher than a total of its EFC and the Stafford Loan amount - at Scripps, Harvey Mudd, Pitzer, Claremont McKenna, Occidental, and USC. Obviously, if the Obamas really were a middle-income family and if they did their homework early - and they seem like that kind of people - they would have learned about the Stanford/Berkeley cost disparity way before their daughter applied to either school, and they would have looked for alternatives to Berkeley. They could have just looked at the eight other schools on this list that would rate as "affordable" at some level, but my list only includes a sample of California schools, and there are about 175 other four-year colleges in California that I don't rate at all. I'm certain that many of them are affordable, and they're out there, ready to be discovered by American families. But using the same input data, if our middle-income Obamas were willing to extend their college search nationwide, they would find among the 130 schools I analyze - which is just five percent of the total number of four-year colleges in America - another 32 schools from which they could expect no-loan offers and another 22 from which they could expect moderate-loan offers nationwide. And the admission requirements of those schools run the full range, from very strict to not strict at all. For lower-income American families the affordability results are even better, and Compilations of my results for all 130 schools I analyze at both income levels are included near the top of my Examples page. As you review those results, especially the one for lower-income families, think how that information could change the expectations of lower-income families for the futures of their children. See those Compilations as a message of real hope available now, and imagine how the lives of real people in real American families could change today, if they only knew.
Let me sum up this page by answering a question, i.e. how did I learn all of this? I learned it because I did the work, I did the data. And I was able to do the data because Congressmen and Senators on both sides of the aisle supported a piece of legislation in 2008 that made it possible. And that same piece of legislation - the work of all those legislators, their staffs, and the U.S. Department of Education - might change your life as it changed the lives of myself, my wife, our son, and our daughter along with about 3,000 other families who benefited from this site last year.
Thanks to everyone behind that marvelous law, best wishes to you on your college search, and special thanks to our American colleges for their exemplary generosity.