The new financial aid initiative
I get a lot of questions about some of the details of our new initiative, so I wanted to give you a breakdown of what this might actually mean for you, the student, and for your parents.
Beginning 2009-2010, Cornell will:
- Eliminate the parental contribution for students from families with incomes below $60,000 and assets below $100,000;
- Cap need-based student loans at $7,500 annually for students who have financial need and whose families have annual incomes above $120,000; and
- Reduce the parental contribution for selected students who have financial need and whose families have annual incomes above $60,000.
Component #1
In order to qualify for #1, the $60,000 cut-off is for total family income. Total family income includes the following income for the tax year prior to the aid year (i.e. for the 2009-2010 academic year, we will look at the 2008 tax year):
- Custodial parent taxed and untaxed income
- Noncustodial parent taxed and untaxed income
- Contributions to retirement plans
- Income from Social Security and child support
- Any other untaxed income
- Business and other losses taken on the tax return
Keep these things in mind; don’t make any assumptions or predictions about where you and your parents fall as far as total family income!
Component #2
What this means for you is that if you receive a financial aid package from Cornell, there will be no more than $7,500 in loans in that package. You can always borrow more if you like, but the amount of loan in your aid package will not exceed $7,500. AND… to reiterate the initiative implemented a year ago, loan levels are already reduced or eliminated for family incomes less than $120,000 per year. Here’s a quick chart to show you how it breaks down:
| Total Family Income | Loan in Aid Package |
|---|---|
| Under $75,000 | $0 |
| Between $75,000 and $120,000 | $3,000 |
| Above $120,000 | $7,500 |
The same rules apply here for total family income, so if you missed component #1, now is a good time to revisit it.
Component #3
The important thing that you need to know about this component of the initiative is that there is nothing extra you need to do to apply. These students will be selected during the admission process. Students may be selected based on their personal background, interests, geographic residence or other factors that will contribute to the academic diversity of the Cornell community.
I hope this has helped take out some of the guess work in understanding our newest aid initiative. Please feel free to reply with any questions or comments you may have!
Ruth
I guessed I missed the fine print for Component #3 when the New Initiative announcement was made. I thought all parents were going to get a break.
My ex-husband is not interested in sending our son to college.. do I still have to get information from his taxes? I’m not sure how this will work.
Hi Beth,
This is a good question. Cornell has an expectation that both biological/adoptive parents contribute to the student’s education and so we ask both parents to submit income and asset information during the financial aid application process. Noncustodial parent information is submitted separately by the noncustodial parent so personal financial information is never shared unless all parties agree in writing. For students with extenuating circumstances regarding noncustodial parents, we have a Noncustodial Parent Waiver Petition that can be submitted. It can be found on our website (www.finaid.cornell.edu) under “Forms.”
Wow, I also did not see the “selected students” part of Component #3. Cornell still isn’t really helping out families with incomes around 120-160k that can’t afford to pay 30 or 40k a year. Or unless I’m mistaken and it will help all families in that income range out in some way at least.
Cornell’s commitment to the families with incomes over 120k annually is a lowered loan level (component 2). Previously, our starting loan levels were over $10,000 in student aid packages. Now we will cap them at $7,500 for those in the higher income bracket. Additionally, 58 percent of students from families with incomes over $120k were awarded need-based grant aid in 2008-2009.
Hi Ruth – As we submit our financial aid applications(child has already been accepted) is there opportunity for the student to demonstrate why they should recieve special consideration under Component #3 or is this something the admissions office will evaluate based on existing application materials. Thanks
Hi Tom,
The selections take place behind the scenes during the admission process, so unfortunately, there isn’t a process in place for students to apply for consideration under component #3.
Is there a web link you can forward to me that explains more details related to “parental contribution?”
THANK YOU for this Blog!!!
Todd,
This link on our web page explains a little bit about how we determine aid eligibility: http://finaid.cornell.edu/eligibility/index.cfm
We were shocked when we received our award letter today.
Can you explain why aid was computed based on 2007 income from those returns instead of the projections provided on the CSS Profile?
If this is the case all the time, then I think it should be explained in more detail on the website as we thought 2008 returns were not due until 5/15 like it says on the website and that the award would be based upon the projects provided on the CSS Profile.
Nick,
We use both 2007 numbers and estimates provided on the PROFILE.
What is the parental contribution for a family with an income below 60,000 but assets above 100,000? Also, when do 2008 W-2s need to be submitted?
Alexis,
That will depend on the value of the assets and the total net worth of the household.
What is the parental contribution for a family with an income of 65,000 but assets of 150,000
If I receive an outside scholarship award of 2000; do I designated which portion of the self help to offset?
Tea, the parent contribution amount would depend on all the other factors that go into evaluating eligibility for aid, so that’s not a question I can answer without seeing the entire aid application. For an outside scholarship award, we would reduce the loan component first, then the work component. If you want the scholarship to reduce work first, you should that indicate to us in writing.
Ruth,
My son have applied as transfer student from another university from another state. He is finishing his first year in this may in diff state.Is it time to file for financial aid right now? Do we have to provide tax information for 2007 and 2008? both?
Please clearify
Thanks
Paresh,
Transfer applicants should be sending their applications for aid to Cornell now, yes. We would prefer to review 2008 tax returns if you have them. Thank you!
Do you consider parents’ 401(k)’s or IRA’s in the calculation of assets?
If a parent has taken a loan from their 401(k), will that amount be excluded from the calculation of parental assets?
John,
We don’t consider the amount of principal in retirement accounts, but we do take a look at the amount that is contributed on an untaxed basis in a given tax year. If a parent takes a loan from the account, it is usually counted as income on the federal tax return, and would be counted as income in turn when we review for financial aid for the following academic year.
i actually have a sponsor who is ready to sponsor part of my fees…..because my parents are not ready for my fees.in that case,what do i do because i’m actually applying as an international transfer student.i would be completing my second year in may.thankyou
Ken,
You should apply as an international transfer student. The financial aid application and instructions for international students (freshman and transfers use the same application) can be found on our website under ‘Forms'(www.finaid.cornell.edu/forms). The deadline for fall transfers is March 15.
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