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Nap Time!!!

Thursday, January 17, 2008
Who should subsidize?

Do you like budgeting anomalies? Chancellor Bob 2.0 and some Regents are looking at fee increases as the path to affordable education. Increasing fees increases financial aid, because a certain percentage of fee increases are allocated to financial aid, and so a fee increase would in fact make education more affordable for people who can't afford it.

I don't have the report, so maybe some things are being left out of these stories, but this part from the Daily Cal report leaves me scratching my head:
The report projects that, if fees increase, the amount of money each undergraduate student will be expected to contribute to their education will total $16,700 by the 2017-18 school year, down from the $18,300 students would have to pay in the same year if fees do not increase.
I simply don't see how boosting financial aid through fee increases can decrease the expected contribution. To do so would require that the total amount of money being taken in from all students goes down, and moving money around after a fee increase doesn't accomplish that. (Maybe they're talking medians?)

posted by Beetle Aurora Drake 1/17/2008 03:04:00 AM #
Comments (5)
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i think its shoddy reporting.

the way i understand it, the EFC (expected family contribution) would be the same if fees were increased, but then that percentage of money allocated to financial aid (university grants im assuming) would increase. so you have the same efc but with more financial aid money available.

so i think the daily cal author was either misinformed or didnt understand.
no... the reporter was right... Here is how it works:

EFC is based on need... so the needier you are, the less your EFC. When the fees increase, your total expenses for the semester increase, while your living expenses stay the same... This means that you will have to pay more... given your family income stays the same, you will be in a lower bracket, because the formula for determining the EFC takes into account the ratio of your family income to your total expenses (it also includes other factors such as the size of the family and number of college students and etc.)

This means that you will look needier according to the formula and your family contribution goes down; i.e. you will allotted more money for living expenses.

I am pretty sure that all of the grants (federal or university) that undergraduates receive (scholarships excepted) have a ceiling and most people take out all of it... So the additional fees will have to be taken out in loans, probably with steeper APRs. The total budget increases, but to get more money, poor students will have to take out more loans, which means that in the long-run they will just be poorer, since their BA is not going to get them jobs to pay off their exorbitant loans.
I was under the impression that EFC is not based on need. Financial aid is based on need, and need is determined through a comparison of costs of attendance and EFC.
No. Your total Financial Aid budget is set and does not change. It is based on tuition and expected cost of living. EFC changes based on need.
efc is set by the federal govt, right? how would that change if uc fees go up? whether it costs 18k or 20k a year to go here, my parents make the same.
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