You Can't Divorce Tuition Bills

November 1, 2005

When colleges first started developing systems for allocating financial aid dollars, an unchallenged assumption was that Mom and Dad were a single economic unit. That assumption can no longer be made, and colleges have struggled to find a way to deal with many scenarios of family life today -- the parents who aren't just divorced but aren't speaking, the prenup that covered college expenses, the millionaire step-parent.

This year, 75 colleges are new using a new system for handling aid applications from the children of divorced parents. The system is based on using an identical way to collect information from both parents, collecting information from parents' new spouses but not expecting them to pay college costs, assuring both parents that their financial information will not be shared with their ex-spouses, and refusing to consider prenuptial agreements or court orders that cover college costs.

The system -- which was described at the College Board's annual meeting, taking place this week in New York City -- was developed by the board's Financial Aid Standards and Services Advisory Committee. The emphasis of the system is on gathering correct information; colleges still have leeway to make their own decisions about who should pay what, but they will be doing it based on consistent (and, the panel hopes, more accurate) information.

The 75 colleges trying the new approach are almost all private institutions, although public institutions will be welcome to use it. Among those using the system now are Amherst, Bates, Dartmouth, Hamilton, Mount Holyoke and Wabash Colleges; Colgate, Cornell, Fordham, Georgetown, Harvard, Johns Hopkins and Southern Methodist Universities; and the Universities of Chicago, Michigan, Pennsylvania and Rochester. (Some institutions are using it for aid applications to some programs, but not all.)

Donald A. Saleh, associate vice president for enrollment management at Syracuse University and one of those who helped develop the new system, said it was based on the "bedrock" principle of allocating student aid dollars -- that families should contribute to their children's education based "not on willingness, but on ability" to pay.

Saleh said that colleges have been all over the board on dealing with this issue, with some making efforts to count both parents and others focusing on the parent who had custody of the child. As a result, some colleges may benefit on yield -- the percentage of accepted students who enroll -- by not pushing for financial information from both parents, he said. Students may be getting better aid packages at such institutions.

But Saleh says such an approach is wrong. "We have a limited amount of aid," he said, so any penny of aid going to someone who doesn't really need it is coming from someone who does.

Julia Benz, director of financial aid at Rice University, said that such situations also create distrust on campuses. "The kids know about one another's situation," she said, so a student on aid who has a wealthy father isn't something that will escape the notice of other students.

The new system kicks in as soon as a student applying for aid indicates that he or she has parents who do not live together. The College Board sends the student an e-mail indicating that financial information will be needed from both parents. The student then forwards that e-mail to both parents, so it is clear to both parents that this request is part of the aid process and not related to the desires of one spouse. The student also has evidence that another entity (the College Board) wants the information. Parents are given a password, which they then change, to keep their information private as they enter it online.

Student are told that there are no exceptions to the requirement -- even if a divorce court order was issued concerning college expenses. In certain rare situations, such as one parent who was abusive or whose whereabouts are unknown, the college can waive the requirement. Data is also gathered about the spouses of parents, even though they are not asked to contribute to college costs. The thinking there is that a parent married to a wealthy individual can use more of his or her income for college costs than could a single parent or someone married to a non-wealthy individual. The aid formulas also assume that assets are shared equally by married couples.

Then, the student receives an estimate for the family contribution based on what the two parents can contribute. The family contribution is given as a lump sum; to provide a breakdown for each parent would undermine the confidentiality of the process, aid officials said. However, they added that campuses can informally have talks with the students and their parents about how to meet the family contribution.

Some high school counselors who attended a briefing on the system expressed skepticism about whether non-custodial parents would provide the financial information and then pay their share. As one counselor put it, "Who's going to tell Dad?"

But those who have been using the process say that it is working. "We underestimate the willingness of parents to support their children," said Youlanda Copeland-Morgan, vice president and dean of admission and financial aid at Harvey Mudd College. While the system isn't perfect, Copeland-Morgan noted that if colleges don't ask for the information or for financial support from non-custodial parents, there is far less chance of those parents contributing.

Many counselors at the briefing said that they were interested in the process, and said that they hoped it would improve the situation facing children of divorced parents, who are sometimes forced to deal with squabbling parents over and over again if the colleges to which the students are applying handle the question in different ways. In this system, which organizers hope to expand to include more colleges, the parents only need to submit the information once and it can be used by any participating college authorized by the applicant.

Other counselors pointed out other potential inequities, such as the way the system does not seek to count the wealth of grandparents who may be supporting a family. Copeland-Morgan said that aid officials have to "seek a balance between the equity issue and how many fights you want to have."

Saleh also stressed colleges using this system to gather information are under no obligation to use it strictly to award aid. They can make adjustments as they feel appropriate, given on the specifics of the case. Even if they deviate from the formulas, he said, they are more likely to be gathering accurate and complete information because of the confidence the process will generate in all parties involved. And most colleges so far are using the formulas and reporting that they believe it is resulting in aid awards that are more equitable than those given out previously. Perhaps most important, the colleges say that the system seems to help the students.

"Invariably, students are in the middle," he said. "This could help them out."

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