A Brown education represents a major investment to students and their families. Cost is one factor, along with several others, that you will have to weigh when choosing a college. At Brown, we believe that the primary responsibility for paying for college lies, to the extent possible, with you and your family. Families typically pay for college from three sources: savings, current income, and future income (loans). Most families use a combination of these sources.

The overwhelming consensus among our students is that the growth, exposure and stimulation they gain from the range of opportunities available at Brown are well worth the commitment of time, energy and finances. Given the significance of the investment, it is important that you understand how we arrive at the contribution expected from you and your family.

Brown University utilizes an Institutional Methodology when calculating the EFC. Below is a list of the major factors comprising the EFC. These factors include:

 

Parent Income

For determination of federal aid the income used includes the Adjusted Gross Income, which appears on the bottom line of the tax return and any nontaxable income. However, for institutional aid, we consider a family's annual total income received which includes those items listed below in the IM column.

 

Parent Income           FM Factors   Additional IM Factors
Taxable Income
  • Wages
  • Interest
  • Dividends
  • Business Income
  • Farm Income
  • Pension/Annuity Distributions
  • Rental Income
  • Royalties
  • Trust Income
Add the following back to income:
  • Business and/or rental property losses
  • Capital losses
  • Depreciation on real and/or rental property

The purpose of adding back these losses is to assess true cash flow in the household.

Untaxed Income
  • Untaxed Interest
  • Untaxed Dividends  
  • Veterans' Benefits
  • Welfare Benefits
  • Child Support Received
  • Annual contributions to tax deferred savings/retirement plans, such as a 401(k)
  • IRA deductions and payments to SEP, SIMPLE and Keogh plans
  • Housing/living allowances
  • Untaxed portions of pension/annuity distributions
  • Worker's Compensation
  • Business distributions or payments not captured in personal income
  • Social Security Benefits

[back to top] 

Allowances Against Income

Once total income is established, allowances for certain non-discretionary expenses are deducted for FM and several additional allowances are considered for IM. After these allowances are deducted, the needs analysis formula assesses a percentage of any remaining income to be used for educational expenses.

    FM Allowances Additional IM Allowances

  Allowances 

  • Federal Income Tax
  • State and Local Taxes
  • Social Security or its equivalent
  • Employment allowance for single-parent households or when both parents work
  • Living allowance based on the number of household members and the number of dependents in college

*This living allowance is a provision for the basic living expenses of a family such as food, housing, transportation, clothing and personal care, and some medical expenses

  • Medical/dental expenses over the standard FM allowance
  • All, or a portion of, a sibling's private school education costs
  • Repayments on loans in parents' name for parents' education and/or education of siblings not currently enrolled in college
  • Elder care expenses
  • Child care expenses

[back to top]  

Parent Assets

Parent assets are considered in order to fully measure a family's ability to contribute toward educational expenses. Assets not included in the calculation for FM or IM include the following: the value of retirement plans, such as pension funds, annuities, non-education IRAs, Keogh plans, or the value of life insurance plans.  In fact, in regard to retirement, an allowance offsets the included assets in order to reserve a portion of the assets for parent retirement and/or family emergency. A percentage of the remaining net worth is added to the calculated parent contribution from income. In general, the asset contribution for parents will fall between 2% and 5% of net worth.

    FM Assets Additional IM Assets    
Assets
  • Cash, Savings, and Checking
  • Real Estate (Not including the home in which you live)
  • Trust Funds
  • Money Market Funds
  • Mutual Funds
  • Certificates of Deposit
  • Stocks
  • Stock Options
  • Bonds
  • Other Securities
  • Education IRAs
  • College Savings Plans
  • Prepaid Tuition Plans
  • Installment and Land Sale Contracts
  • Commodities
  • Business/Farm Net Worth
  • Business transactions that increase net worth
  • Home equity

[back to top] 

Number of Family Members in the Household

In general, this is the number of family members living in the same household, including your parents, siblings attending college or siblings living at home their first year out of college. Grandparents living in the home, declared dependent, may be included, but their income and assets may also be considered. "Adult children" who have finished their education and are capable of working are not included. Relatives living outside the home, even when supported by the family, are not included.

Number of Children Currently Enrolled in College

The calculations described above will produce a total expected parent contribution from income and assets to be used toward educational expenses. This total represents what families can contribute on an annual basis toward educational expenses. When families have more than one child in college at the same time, parents are not expected to double or triple their contribution. Instead, the contribution is adjusted to reflect the number enrolled in college. The contribution for each child may not be divided evenly, especially when a sibling attends an institution where the family’s out of pocket expenses are significantly less than what the family pays to Brown. In addition, siblings enrolled in graduate, medical or law schools are not included in the number in college for the determination of eligibility for institutional Brown Scholarship eligibility.

[back to top] 

Non-Custodial Contribution

When we determine a family contribution, this expectation may include a contribution from a non-custodial parent. Our policy for determining the financial need of a student whose parents are single, never married, separated, or divorced is based on the principle that we use to determine eligibility for all of our students; the primary responsibility for financing a student's education lies with the student and the family. Parents are responsible for the support and the educational expense of their children to the extent that they are financially able to do so. As such, Brown requires the submission of non-custodial income information detailing the parent's ability, not willingness, to contribute. Should parents discontinue their financial support for reasons other than ability to pay, Brown will not assume the parental responsibility for financial support of the student. For further details on the collection of non-custodial parent information, please read through our Applying for Financial Aid and Understanding My Financial Aid Award in the Frequently Asked Questions section of our website.

Student Income & Assets

As a student, you are expected to contribute towards educational expenses from your summer and academic year earnings and from your assets. The factors considered in student income and assets are the same as those indicated above for parent income and assets. All assets held in your name, such as savings, investments, trusts, and real estate, must be reported. Unlike parent assets, students must report retirement investments on the CSS PROFILE for purposes of Institutional Methodology. The expected contribution from a student's assets is 20% annually.

Determining a family's contribution to educational expenses is a complicated process. If you still have questions, be sure to contact our office for additional information.

[back to top]