Determining Aid Eligibility for International Students
Higher education is a valuable investment. Reed College believes that you and your family, as beneficiaries of that investment, have the primary responsibility for paying for your college costs.
The college assumes that you and your family will contribute to the fullest extent possible from income and assets, but recognizes that a family's resources may be insufficient to fully fund the cost of a Reed education. Reed is committed, therefore, to providing a comprehensive, need-based financial aid program that seeks to bring the college's educational opportunities within reach of all qualified students.
To achieve equity and consistency in awarding institutional grants, the college uses the nationally standardized need analysis formula, Institutional Methodology (IM), developed by the College Board, to calculate your expected family contribution (EFC).
Your family's ability to pay, not willingness to pay, is measured in the IM formula. The purpose of the methodology is not to produce an estimate of available cash or to reflect how parents may wish to use their income, assets, and borrowing power. Rather, its function is to calculate similar contributions for families in similar circumstances, and to expect families with different circumstances to contribute appropriately different amounts.
Your family's current circumstances (particularly family size, income, and assets) form the basis for determining your family's ability to pay for educational expenses. Similar to other major purchases such as a home or car, your family may choose to finance this resulting contribution from savings, current income, or future income (borrowing).
The formula used to calculate your expected family contribution is fairly complex. Four resources are considered when determining your expected family contribution: parents' income, parents' assets, your income, and your assets. The following sections will provide a brief overview of how your expected family contribution is calculated using these four resources.
Your expected family contribution is subtracted from the cost of attendance and the result is your demonstrated financial need. The college will meet your demonstrated financial need for up to eight semesters, as long as you are making satisfactory academic progress and submitting the appropriate applications and required documents by the established deadlines.
Cost of attendance
The cost of attendance is what the college estimates it will cost you to attend Reed for one year. Included in the cost of attendance are direct (billed by Reed) and indirect costs:
- Direct costs for tuition, fees, housing and food (if you live on campus).
- Indirect living expenses (if you live off campus).
- Indirect expenses for books and supplies, personal expenses, and transportation.
The amount used for off-campus living expenses is determined using student surveys, the Consumer Price Index, and other publicly available data. Every other year, the Office of Institutional Research surveys Reed students living off-campus to determine average amounts spent on housing, food, and other expenses. In the years in which the survey is not conducted, the amounts will be adjusted at the same rate as the Consumer Price Index in conjunction with other publicly available data.
The average cost of living off-campus for the 2023-24 academic year is $12,690. Reed uses this amount to replace the costs of room and board in your cost of attendance. If you will be living off-campus, your bill with the college will not include dorm and meal plan charges; however, your aid will be packaged to meet your demonstrated need using a cost of attendance that includes off-campus living expenses.
Living in Reed/Birchwood Apartments
Students living in the Reed College Apartments or Birchwood Apartments who participate in the college's meal plan will have their cost of attendance calculated using the actual cost of the apartment and meal plan A. Students living in the apartments without a college meal plan will have their cost of attendance calculated using the cost of the apartment and an off-campus food allocation amount of $3,730.
Students who have successfully petitioned Residence Life/Disability Support Services to be exempt from the meal plan requirement will be packaged using the off-campus food allocation amount of $3,730. Students with extenuating circumstances (i.e. dietary restrictions, etc.) who demonstrate their food costs are higher than the standard amount may submit documentation of higher food expenses to the Financial Aid Office. Adjustments may be made on a case-by-case basis.
Expected parent contribution
The analysis of your parents' income begins with income reported on their tax documents. For international tax filers income includes wages, salaries, interest and dividend income, and business/farm income. To determine the total income to be used in the need analysis calculation, however, adjustments are made, such as disallowing certain losses and adding income not taxed by the government. Adjustments are made based on the student's country of residence.
The analysis of your parents' assets includes the amount of any cash, savings, and checking accounts; the equity they have in their home; the equity they have in any investments, real estate, business, or farm; and assets held in the name of your siblings, including pre-paid tuition plans. Retirement savings are not included as assets in the need analysis formula.
As with income, allowances are made to exclude a portion of your parents' assets from the need analysis calculation. An emergency reserve allowance, which is based on the size of your family and represents six months of average family expenses, is calculated to protect assets in case of unanticipated events such as illness or unemployment. A cumulative education savings allowance recognizes the need for a family to save to finance their children's college expenses; it calculated based on parental income and family size to protect assets equal to the amount the family would have accumulated if they had saved a specified percentage of their income each year for each child. This allowance is designed to prevent families who have conscientiously saved for college from being penalized in the need analysis system. Finally, a low-income asset allowance is calculated for families with very low income to recognize that those families may need to draw on assets to cover basic living expenses. After subtracting these allowances from your parents' income, a percentage of the remaining available assets is calculated, and the result becomes your parents' contribution from assets.
As with parental income, student taxable and non-taxable income is considered in the need analysis formula.
Your student contribution from income is compared to the college's minimum student contribution from income. The college includes a minimum contribution from each student when determining eligibility for institutional financial aid. The minimum contribution is $2,000. If your student contribution from income is greater than Reed's minimum contribution, then your contribution from income is used. If your calculated student contribution from income is less than Reed's minimum contribution, the minimum contribution will be used in calculating your eligibility for financial assistance.
The college uses 25 percent of the current value of your savings, stocks, bonds, and other assets as your contribution from assets.