The Query
A whole lot of these ‘free tuition’ insurance policies are extra PR than actuality as a result of they use the CSS Profile fairly than the FAFSA and maintain the worth of the first residence and retirement accounts towards the household (even when the dad and mom are too younger to faucet the IRA or 401k and not using a hefty penalty).
— Nameless Fb Person
Welcome to the Friday mailbag, the place we take one reader query and reply it. Have one? Ship it to us — particulars on the backside.
The Quick Reply
This remark confirmed up beneath our protection of why elite schools are racing to supply free tuition, and the frustration behind it’s actual. The CSS Profile asks for way over the FAFSA does, and plenty of households discover it invasive. However the remark treats the shape and the components as the identical factor, they usually aren’t.
The CSS Profile does ask on your residence’s worth, your mortgage stability, and the present worth of each retirement plan, however it’s solely an utility. What a school does with every reply is its personal coverage, which is a part of why school pricing works like a black field for therefore many households.
Would you want to avoid wasting this?
We’ll e-mail this text to you, so you’ll be able to come again to it later!
What Does The CSS Profile Ask About Your Dwelling And Retirement Accounts?
The CSS Profile asks dad and mom for the yr they purchased their residence, the acquisition worth, its present market worth, and what they nonetheless owe. It additionally asks which retirement plans every dad or mum has, from 401(okay)s and IRAs to pensions, and the present worth of these retirement plans as of the day you file.
The FAFSA asks for none of that. The federal monetary help guidelines exclude a household’s principal residence, the worth of retirement plans, a farm the household lives on, and a household enterprise with 100 or fewer staff. That’s why we inform households you don’t report a 401(okay) or IRA on the FAFSA.
The CSS Profile additionally goes additional on revenue. Payroll contributions to a 401(okay) or 403(b) don’t present up in adjusted gross revenue, so many CSS colleges add them again.
Tufts, for instance, says its revenue determine counts contributions to tax-deferred retirement plans and withdrawals from retirement accounts. That’s one cause a household with a good SAI on the FAFSA can nonetheless get a better household contribution at a CSS faculty.
Do Schools Use Each Quantity On The CSS Profile?
No. The School Board, which runs the CSS Profile, tells schools they’ll regulate the components to mirror their institutional mission, values, and objectives. One faculty can ignore your house completely whereas one other counts each greenback of fairness, and each are utilizing the identical utility.
Right here’s how 11 schools with free-tuition or full-tuition help tiers describe their very own guidelines on their monetary help web sites. It’s necessary to understand that many of those colleges speak about “typical belongings” they usually don’t outline it. A whole lot of households get hung up on this phrase as a result of they really feel like several residence fairness or any worth of their retirement account will negatively affect them.
Nonetheless, in our conversations with monetary help officers, most of them are typically looking out for the outliers. This implies households that may have a $10 million residence or a $50 million IRA. They’re actually not attempting to penalize middle-income Individuals who’ve constructed up a bit residence fairness and a bit bit in retirement.
Our story on what assembly 100% of demonstrated want truly means covers how these colleges construct their help presents.
How 11 Free-Tuition Schools Deal with Dwelling Fairness And Retirement Financial savings
| School | Major Dwelling Fairness | Retirement Accounts | Asset Rule For High Help Tier |
|---|---|---|---|
| Harvard | Sometimes Ignored | Sometimes Ignored | Not specified |
| Stanford | Ignored | Ignored | “Typical belongings,” not outlined |
| Princeton | Ignored | Ignored | Value figures assume belongings beneath $175,000 |
| Johns Hopkins | Ignored | Ignored | Property typically beneath 3x revenue |
| Penn | Ignored | Not Acknowledged | Liquid belongings of $50,000 or much less, no different actual property |
| Duke | Capped By Revenue | Ignored | Not specified |
| Columbia | Counted | Ignored | Typical belongings as much as about $250,000 |
| Tufts | Counted | Ignored | “Typical belongings,” not outlined |
| Notre Dame | Counted | Ignored | Typical for revenue stage, not outlined |
| Dartmouth | Counted | Not Acknowledged | “Typical belongings,” not outlined |
| Yale | Counted | Not Acknowledged | “Typical belongings,” not outlined |
Insurance policies as revealed on every school’s monetary help web site, October 2026. Supply: School monetary help places of work. The School Investor.
On retirement, the reader’s fear principally doesn’t maintain up at these colleges. Duke says retirement funds akin to 401(okay), 403(b), and IRA accounts “are all the time excluded from consideration.” Johns Hopkins goes additional and says it by no means expects households to make use of retirement financial savings to pay for school. On retirement balances, these colleges line up with the FAFSA, which additionally leaves out 401(okay) and IRA balances.
Dwelling fairness is the place the reader has a degree. Columbia lists residence fairness alongside money and investments as a dad or mum asset, and so do Tufts, Notre Dame, Dartmouth, and Yale. A household with a paid-down home can miss the free-tuition tier at these colleges even with revenue beneath the edge, which is similar drawback we flagged with belief funds and monetary help.
How A lot Can Dwelling Fairness Change What A School Counts?
The distinction between insurance policies might be a whole lot of hundreds of {dollars} on the identical home. Take a household incomes $180,000 that owns a $900,000 residence with a $250,000 mortgage, leaving $650,000 in fairness. The FAFSA’s Pupil Help Index counts none of it.
How $650,000 Of Dwelling Fairness Counts Beneath Totally different School Insurance policies
| Coverage | Dwelling Fairness Counted | Share Of Fairness Counted |
|---|---|---|
| FAFSA | $0 | 0% |
| CSS College That Ignores Dwelling Fairness | $0 | 0% |
| Capped At 1.2x Revenue | $216,000 | 33% |
| Capped At 2x Revenue | $360,000 | 55% |
| Capped At 3x Revenue | $540,000 | 83% |
| Full Fairness Counted | $650,000 | 100% |
Instance household: $180,000 revenue, $900,000 residence, $250,000 mortgage. Supply: The School Investor.
Colleges that cap residence fairness tie the cap to revenue. Duke caps residence fairness primarily based on dad or mum revenue stage, although it doesn’t publish the a number of. A cap protects a household that purchased many years in the past in an costly market from trying wealthy on paper, a spot that reveals up in what households actually pay for school.
Schools assess a proportion of countable belongings as a part of the dad or mum contribution, and every faculty units its personal asset safety and evaluation guidelines. Nonetheless, $650,000 of counted fairness strikes a household properly previous what most colleges name “typical belongings.”
Is It Truthful To Rely Dwelling Fairness And Retirement Financial savings?
Each side have a good argument, and that’s why schools land somewhere else.
The arguments that households really feel that is unfair are fairly simple: A home isn’t money, and most dad and mom can’t faucet an IRA earlier than age 59½ with out the 10% further tax on early distributions on prime of revenue tax. Our record of methods to withdraw from an IRA or 401(okay) penalty-free reveals how few of these exceptions match a tuition invoice.
Households additionally argue that counting financial savings punishes the individuals who deliberate forward. A household that maxed out a 401(okay) for 15 years shouldn’t get much less help than a household with the identical revenue that spent the cash. However most CSS Profile colleges agree on not counting retirement financial savings.
The opposite facet has a degree, although. The FAFSA ignores the first residence, retirement plans, and small family-owned companies completely, so a household with a $5 million home and $5 million in IRAs can report little greater than money and a brokerage account. A university handing out institutional grant cash, which comes from its personal endowment and different college students’ tuition, has a cause to see the entire stability sheet earlier than calling that household needy. That’s the identical logic behind the FAFSA itself assuming dad and mom will help pay till age 24.
Once more, we see the aim as to not punish middle-class households, however fairly to verify help will not be being handed out to millionaire and billionaire households who could have a number of levers to tug to shelter these belongings.
Are Free-Tuition Insurance policies Actually “PR Over Actuality”?
Partly. The revenue ranges are the headlines, however the “typical asset” situation decides who truly qualifies. At Penn, the Quaker Dedication ignores main residence fairness. It additionally requires liquid belongings of $50,000 or much less and no actual property past the first residence.
The faculties that outline “typical belongings” in {dollars} are probably the most sincere about it. Johns Hopkins makes use of belongings typically beneath 3 times annual revenue, and Princeton’s free-tuition figures (PDF File) are primarily based on households with belongings beneath $175,000. Our roundup of tuition-free schools tracks the revenue thresholds, and the asset guidelines sit beneath them.
Free tuition additionally isn’t free school. A Brookings evaluation discovered college students nonetheless face $20,000 to $25,000 a yr in housing, meals, and different prices even when tuition is roofed. And whereas a few of these colleges’ “free” insurance policies do embrace housing and different prices, they usually have a good decrease revenue and asset threshold.
What Ought to Households Do Earlier than Submitting The CSS Profile?
Search for every faculty’s asset coverage earlier than you assume the worst. The reply is normally one sentence on the faculty’s personal help web site.
- Search every faculty’s monetary help web site for “residence fairness” and “retirement.” Many of the insurance policies within the desk above got here straight from the colleges’ personal web site.
- Run every faculty’s personal internet worth calculator. Use the calculator on the faculty’s web site, since a generic estimate received’t mirror that college’s asset guidelines.
- Report precisely. Each quantity goes in as of the day you file, and schools can confirm it. Our walkthrough of the CSS Profile dad or mum asset questions covers what goes the place.
- Use the particular circumstances part. In case your fairness is excessive since you purchased in 1998 or your house is in a high-cost space, say so within the CSS Profile particular circumstances field.
- Enchantment with competing presents. If one faculty ignores your house and one other counts all of it, that disconnect belongs in a monetary help enchantment.
The Backside Line
The CSS Profile collects the whole lot, however schools don’t use the whole lot. Retirement accounts are excluded at almost each free-tuition faculty we checked, and residential fairness is a coin flip that will depend on the faculty. Learn every faculty’s coverage, run its internet worth calculator, and decide the supply on the total price of attendance over 4 years.
Steadily Requested Questions
Does The CSS Profile Rely Retirement Accounts As Property?
The CSS Profile asks for retirement balances, however most selective schools go away them out of the help calculation. Duke, Columbia, Tufts, Notre Dame, Princeton, Stanford, and Johns Hopkins all say they exclude retirement accounts. Many CSS colleges do add 401(okay) and 403(b) contributions again into revenue.
Does The CSS Profile Rely Dwelling Fairness?
It will depend on the faculty. Princeton, Stanford, Johns Hopkins, and Penn ignore main residence fairness, Duke caps it by revenue, and Columbia, Yale, Dartmouth, Tufts, and Notre Dame rely it. The FAFSA doesn’t rely your house in any respect.
How A lot Does The CSS Profile Value?
Columbia’s 2026-27 directions put the CSS Profile at $25 for the primary school and $16 for every further faculty. It’s free for households with adjusted gross revenue as much as $100,000, amongst different charge waiver guidelines.
Which Schools Require The CSS Profile?
Practically 350 schools, universities, and scholarship packages (PDF File) use it, in response to the School Board. Verify our CSS Profile walkthrough for the total record of questions and tips on how to reply every one.
Ship Us Your Query
Bought a scholar mortgage, monetary help, or cash query you’ll be able to’t get a straight reply on? Ship it to us and we could reply it in a future Friday mailbag.
Robert Farrington is the founding father of The School Investor and is widely known as one of many nation’s main voices on scholar mortgage debt and saving for school. He holds an MBA from UC San Diego Rady College of Administration and has spent over 15 years researching, writing, and advising on scholar loans, 529 plans, monetary help packages, and saving and investing for younger professionals.
Robert has been featured within the The New York Instances, The Wall Avenue Journal, The Washington Put up, NBC Information, and Forbes, the place he has been an everyday private finance contributor for over a decade. His work combines each skilled experience and private expertise – he efficiently navigated his personal scholar mortgage compensation journey and has helped hundreds of readers do the identical.
He’s dedicated to creating the intersection of non-public finance and schooling clear and accessible. You may study extra about Robert on the About Web page or on his private web site RobertFarrington.com.
