Step 1: Obtain Historical Household Income Distribution


Historical Income Tables: Households

Step 2: Obtain Approximate Expected Family Contributions by Family Income


2012-2013 EFC Quick Reference Guide

Step 3: Match 2013 EFC to Income Data

Result is expected family contribution (a proxy for what families can afford) at each household income quintile limit

Level Income Expected
Upper Limit Lowest 20% 20,900 0
Upper Next 20% 40,187 2,269
Upper Limit Next 20% 65,501 7,220
Upper Limit Next 20% 105,910 20,168
Lower Limit Top 50% 196,000 47,933
Quick observations
  • Only about 20% of households are expected to be able to afford our discounted tuition. This does not include other costs of attendance.
  • Even 95% households are not expected to be able to pay out-of-pocket an amount that matches our total cost of attendance.
  • These figures are conservative because
    • Expected family contribution tends to overstate what most families feel they can afford
    • These income numbers are based on total income but the EFC numbers are based on AGI, generally a lower figure
    • These income numbers include families without children. Since many of these are empty nesters further along in their careers they are probably over-represented in the upper parts of the income distribution. The families we court are more likely in the left end of the distribution

Since the income data is in constant dollars we can do a back of the envelope calculation about change over time. Let's match each income quantile limit with its corresponding EFC for 2013 and then put 2013 tuition on the same chart.


A not entirely unreasonable goal for a school that values access and wants to thrive in terms of having its pick of students in reasonable numbers would be to get its effective cost closer to $10,000 than $20,000. Actually, it's a bigger step than this since cost of attendance is not included in net tuition.

Consider a school with 1,000 students and a current average discounted tuition rate of about $20,000. If this school wanted to get to an average discounted tuition of $10k it would cost about 1,000 x $10,0000 or ten million dollars annually. To fund this out of endowment would require an additional endowment of perhaps $200 million.

Alternatively, what if the school could transform itself so that it could educate 2,000 undergraduates with more or less current staffing and facilities. The shift from 1000 x $20k in revenue to 2,000 students x $10k would leave the total revenue from students unchanged.

What that school would have to do is think very creatively about:

  • how it would teach the 2,000 with the same resources it uses for 1,000
  • how it would structure and market its offerings so as to attract the 2,000



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