Forty private universities, including Harvard and Yale, are facing a lawsuit for including the assets of non-custodial parents in students’ financial aid calculations amid a growing trend of heightening standards of student aid evaluation.
The lawsuit pits students against colleges and universities that charge excessive tuition to combat financial hardship, and the outcome of the lawsuit is expected to have a significant impact on the trend toward heightened application evaluations.
At issue in the lawsuit is the College Scholarship Service Profile (CSS Profile), which colleges require when reviewing student financial aid applications. The CSS profile includes the income of parents who are not practically involved in the child’s upbringing due to divorce or separation.
Starting this year, colleges are also using the Student Aid Index (SAI), which is based on the CSS Profile and includes parental income and assets.
The SAI is an index that calculates a student’s financial aid amount through the federal government’s calculation formula. The SAI is calculated based on the CSS Profile and the Free Application for Federal Student Aid (FAFSA). Non-taxable income from a student’s family and even Social Security benefits and unemployment compensation are factored into the SAI calculation. This means that colleges are eagerly looking for ways to reduce students’ financial aid as much as possible.
“The answers to the questions asked in the CSS Profile all go into the calculation of the SAI amount,” says Richard Myung, CEO of AGM College Planning, “and this year, the number of questions specifically asking about change in income and asset increased, resulting in changes in the students’ SAI amount eventually in more financial aid reductions or penalties.”
In the case at issue in this lawsuit, for example, the inclusion of noncustodial parental assets in the CSS profile would increase the SAI. The lower the SAI, the more aid a student is eligible for, and colleges are increasing this index by to reduce students’ financial aid.
Notably, the CSS Profile cannot be changed once submitted. If you make a mistake, your SAI could go up and you could be penalized.
“Any discrepancy in the CSS Profile and FAFSA, even if unintentional, can raise suspicions of fraud,” said a financial aid consultant in the Los Angeles area. “This is in line with the Department of Education’s recent crackdown on the use of ’third parties’ to complete the FAFSA.”
The controversy began when Eileen Chang of Cornell University and Maxwell Hansen of Boston University filed a class action lawsuit in the U.S. District Court for the Northern District of Illinois alleging that the College Board and 40 private colleges violated antitrust laws. The Ivy League universities included Harvard, Carnegie Mellon, Johns Hopkins, the University of Pennsylvania, and Yale. In California, USC, Caltech, and Stanford were named as defendants.
BY YEOL JANG, HOONSIK WOO [woo.hoonsik@koreadaily.com]
