As we made the final left turn into my driveway, I sighed a breath of relief. The traffic on the Merritt Parkway had reached its peak — bottlenecks, bumper-to-bumper congestion and a sea of dull red brake lights rose and fell as what seemed like all of New England made its southbound Thanksgiving migration.
As I approached my front door, I was greeted by a bulky real estate lock box hanging from the handle. I turned to the front yard where, surely enough, a Coldwell Banker sign was posted.
Shortly before I arrived home, my parents told me that we were putting our house on the market. “Why?” I asked them. We had lived there for so long, I didn’t want to move out of my hometown, it has everything we need — all of which I would argue to them. My parents later explained to me the difficulty in maneuvering Yale’s financial aid formula. “We didn’t know it at the time, but Yale weights the value of your house more than nearly all of its peer institutions when they calculate your aid,” they said.
Valuing home equity to the extent that Yale does disqualifies many prospective Yalies from getting aid that they would otherwise receive at peer universities. Yale should join its peers. Yale should discount home equity when determining financial aid.
While most financial aid calculations are hyperdetailed, the basic function of the aid formula is to consider a family’s income. And after factoring in the parents’ dependents, taxable income sources, investments and a load of other financial minutiae, it calculates an expected family contribution given the family’s financial capabilities.
When applying for financial aid, most schools couldn’t care less about the value of your home. But, for roughly 260 (mostly elite private) universities, students must also submit a separate financial aid application — the CSS profile — that asks about, among other things, families’ home equities.
Each of the nearly 260 schools will take a given family’s home equity and count a percentage of it as income for that family. Thus, the greater the value of a family’s house, the less likely that family is to receive aid for schools that take into account home equity in financial aid calculations.
Consider our friends in Cambridge. Since their university doesn’t take into account the value of one’s home when calculating financial aid packages, our chums up north don’t have this problem when applying for aid like we do.
Our buddies in Boston aren’t the exception. Princeton also discounts home equity in assessing financial aid; Caltech, too. Yale has the second-largest university endowment in the world. Surely if Princeton and Caltech can afford to discount home equity, Yale can, too.
I want to be very clear: My intent is not to slander Yale’s financial aid policy. On the contrary, more than half of Yale’s students receive need-based financial aid, and for many of those students, Yale’s aid is the reason they can afford their education. But we would be kidding ourselves if we were to say that Yale’s financial aid methodology is as generous as can be.
The fact of the matter is that Yale could be doing more. Doing away with home equity when calculating students’ financial aid would make Yale more affordable for hundreds of more families than it currently is. We ought to embrace any such change with open arms.
And if Yale is reluctant to renege on home equity altogether, it can at least settle on weighing it less than it does now. Cornell, Dartmouth, Duke, Stanford, Columbia and the University of Chicago all take home equity into account, but they do at nearly half the level that Yale does. For this very reason, several of my friends and peers who were accepted to Yale with no aid applied to a slew of other competitive schools with better aid policies, and then returned to Yale, asking them to match those packages. This labyrinthine policy is inefficient, stress inducing and unsound.
Back home, when my parents broke the news to me, I had a lot of trouble realizing that my attachment to my house simply could not coexist with the intractable financial realities that constrain us — realities that, since coming to Yale, have made staying in our house infeasible. I haven’t completely reckoned with the fact that I soon won’t be living in my hometown anymore.
Nevertheless, let’s call for Yale to be as financially accessible as its peer institutions — a change for which I’m sure we would all be grateful.
Sammy Landino is a first year in Hopper College. Contact him at firstname.lastname@example.org .