What a $300,000 College Might Cost a $200,000 Family

College is so expensive that even the affluent can be considered needy.

Oct. 1 is opening day for financial aid season, but the Free Application for Federal Student Aid — the dreaded FAFSA that families were able to start filing on Thursday — is by no means the last aid form that many of them will fill out. If they want a discount on their favored schools’ list prices, which approach $80,000 annually at some private colleges, those forms will help financial aid administrators determine just how needy any given family is.

All that data entry can pay off, because lots of people can qualify for financial aid that is based solely on need. In fact, over a four-year span, families with annual household income of $200,000 can get a third or more of the cost knocked off an education with a $300,000 list price.

But that doesn’t satisfy everyone. Even if you have to pay a mere $40,000 per year — about what a $200,000-earning family could owe at Northwestern, Rice and Vanderbilt, according to the net price calculators on their financial aid websites — that can be a tough check to write. At the same time, outside observers often wonder why a $200,000 family is being subsidized instead of one making $20,000.

A fresh set of families encounters the undergraduate financial aid system for the first time each year, and only a small minority end up understanding exactly what is happening to them. Much of the confusion rests with the fact that there are different kinds of families, different kinds of aid

Keep reading this article on The New York Times Your Money.

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