Caesar Storlazzi, Yale University Daniel T. Barkowitz, Mass. Institute of Technology
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Transcript of Caesar Storlazzi, Yale University Daniel T. Barkowitz, Mass. Institute of Technology
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Caesar Storlazzi, Yale University
Daniel T. Barkowitz, Mass. Institute of Technology
Kate Gentile, Amherst College
International Needs Analysis:
Building Towards a Global Consensus
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AgendaAgenda
1. International Application Materials 1. International Application Materials
2. Global Consensus Methodology2. Global Consensus Methodology
3. Case Studies3. Case Studies
4. Limitations and Considerations4. Limitations and Considerations
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Caesar StorlazziCaesar Storlazzi
1. International Application Materials 1. International Application Materials
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Application MaterialsApplication Materials
Financial Information Gathering: Income and Assets
Institutional Form
CSS International Student Application
Verification of Data ProvidedLetters or other documents from employers or banks
Income tax returns, if such exist.
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Basic Information NeededBasic Information Needed
Name, Place of Birth/Nationality, Place of Residence, Place of WorkSize of Household, Number in College, Parents’ Marital Status, Parents’ OccupationsHousehold Income (Mother, Father, Other Family Members, RE Holdings, Business Income, Interest/Dividend, Etc.). Exchange Rate Used.
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Basic Information (cont.)Basic Information (cont.)
Family AssetsHome, Other Real Estate
Business Worth/Equity
Savings Accounts, Investments
Jewelry, Art Works (?)
Savings/Investments Held in Other Countries
Student AssetsSavings/Investments in the Student’s Name
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Basic Information (cont.)Basic Information (cont.)
Family ExpensesFor comparison to the adjusted IPA used in the GNA or other calculation.Some family expenses reveal a different cultural norm (servants, dowry, and so on) and such information can be used to perform a case-sensitive review as necessary.
Family Support AvailableWhat the family believes they can afford over the length of the student’s educational period.
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Ancillary InformationAncillary Information
Information for Non-custodial Parent
Details regarding Income and Assets of a Business
Exchange Rate Trends for the country/area of the world.
Historical income information/predicted income information to help inform a decision about EFC
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Verification of InformationVerification of Information
International Families tend to complete the forms accurately and carefully. However, we need to read all forms carefully in order to ensure accuracy and that all questions were understood. Be suspicious of blanks!
Obtain letters, documentation and income verification (tax returns) in the original, together with a translation into English.
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Daniel BarkowitzDaniel Barkowitz
2. Global Consensus Methodology2. Global Consensus Methodology
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Global Consensus: A HistoryGlobal Consensus: A History
Grew out of 568 Group / Consensus ApproachDesire to streamline various types of International Needs Analysis:
Spreadsheet Method (flat %ge of Income / Asset)GDP methodBase Institutional Methodology (IM)Offer
Survey completed 2006Pilot proposed 2007Pilot year completed 2007-0810 – 15 schools used method in 2007-08
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Global Consensus: A FrameworkGlobal Consensus: A Framework
Uses IM as adjusted by 568 group as a base (reliable / valid / well-known)
Home projection / Home Equity Cap
Allowances for Private School Tuition (with cap)
Concept of Family Assets
Limited to non-US Citizens (regardless of country of residence)
Includes Canada and Mexico
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Global Consensus: Comparing CountriesGlobal Consensus: Comparing Countries
“Global Coefficient” used to measure purchasing power parity between countries (US and Home Country)
Consistent Measure Globally
Determined by Dividing Gross Domestic Product by Population
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Global CoefficientGlobal Coefficient
GDP per Capita (PPP) kept by the CIA as Part of World Factbook (http://www.cia.gov/cia/publications/factbook/)
Determine CoefficientPercentage by Country as Compared to US
Apply Percentage to Fixed Formula Values (examples: tuition cap, Income bands, Asset bands, etc.)
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Sample CoefficientsSample Coefficients
Africa
S. Africa .3036 Zimbabwe .0479 Botswana .2488 Kenya .0273
Asia
India .0867 China .1780 Vietnam .0707 Nepal .0342
Turkey .2077 Philippines .1141
South & Central America
Argentina .3470 Guatemala .1141 Colombia .1963 Mexico .2242
Eastern Europe
Bulgaria .2442 Czech Rep .5022 Romania .2077 Russia .2785
Western & Northern Europe
England .7260 Italy .6894 Sweden .7351 Greece .5479
Others
Australia .7602 Hong Kong .8515 Taiwan .6757S. Korea .5593
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Global Consensus ContinuedGlobal Consensus Continued
Taxes paid as reflection of total mandatory contributions (no need for FICA or State taxes)
One-time currency conversion (minimizes currency fluctuation risk)
For 2007-08, used common spreadsheet to analyze cases
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Kate GentileKate Gentile
3. Case Studies3. Case Studies
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Case Study 1Zimbabwe
Case Study 1Zimbabwe
Very low coefficient (.0479)
2 family members in college
High taxes and mandatory assessments including Aids Levy, pension and medical
Country experiencing hyper-inflation
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Case Study 2Greece
Case Study 2Greece
Higher coefficient (.5479)
Other income is from rental property
Significant non-liquid assets. Home-equity capped, other real estate value adjusted under professional judgment (ISFAA does not ask about ORE mortgage, purchase date, price)
Significant sibling secondary educational costs
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Case Study 3People’s Republic of China
Case Study 3People’s Republic of China
Relatively low coefficient (.1781)
Fairly typical application for families from People’s Republic of China
High offer relative to income
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Case Study 4South AfricaCase Study 4South Africa
Slightly higher coefficient (.3036)
Slightly above middle income family for South Africa
Home equity capped
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Case Study 5Romania
Case Study 5Romania
Relatively low coefficient (.2077)Father self-employed, significant increase in 2006 income over previous years18 year old sibling deferring college entrance for one yearHigh income for this country, US equivalent for this family would be $224,200Home equity cappedGNA calculated PC equaled 31% of gross income determined to be too high, adjusted under PJ to $8700 or 19% of gross income (closer to the percentage of income assessed in previous years)
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PanelistsPanelists
4. Limitations and Considerations4. Limitations and Considerations
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Known LimitationsKnown Limitations
High income for low co-efficientFace validity of $40,000 income with a high EFC (or income %ge)
No measure of difference of local economy within the country
Paris vs. Provence / Madrid vs. Seville
Educational allowance for sibs in low co-efficient countries reaches maximum quickly
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Other LimitationsOther Limitations
How to treat foreign colleges (full allowance?)
Using local (US) formula to apply to foreign economies
Home Value Projection?
Asset Conversion Rate?
Tuition limits?
Making sure all mandatory expenses are listed as “taxes”
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Other ConsiderationsOther ConsiderationsNo needs analysis system will be accurate in 100% of cases
Professional judgment
Appeals
Where is the “good enough” point?When will we have critical mass (# of schools)?
Have we reached consensus?
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Other ConsiderationsOther Considerations
Can the College Board provide a solution?Spreadsheet vs. online international app with GC built in (like the new NCP process)?
If the Board builds it, who will bear the fee?
Next steps568 General Adoption?
FASSAC?
Other groups?
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QuestionsQuestions
Questions / comments / suggestions?
Evaluations
Thanks!