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The June issue of Kiplinger's reports that some major universities have changed their formulas for determining family contributions, in ways that will be more favorable to middle-income and upper-middle-income families.

At Princeton, home equity doesn't count at all for families earning up to $90,000, and is pro-rated for others. Yale doesn't count the first $150,000 of a family's assets. Some other colleges and universities, not mentioned in the article, have made similar changes.

Also, it says that Stanford now uses outside scholarships (those that students bring with them, not those awarded by the university) to reduce a student's loan allocation instead of to reduce the university's grant award. Stanford doesn't count home equity above three times the household income.

My guess is that many other schools will also break from the College Board's formula, and not all in the same ways. This could result in substantially different aid packages for the same student from apparently similar schools.

On the negative side, a College Board representative is quoted as saying that colleges want to start figuring a family's retirement investments into the calculation. My guess about this is that some of them will probably start to count a higher percentage of non-retirement investments if retirement investments are above a threshold. Some might also start to count the contribution portions of Roth IRAs, since those can be withdrawn at any time.
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