Moving $200,000 out of cash to improve chances for college financial aid?

[Anonymous]

You could get a secondary passport and dump the money into an investment account overseas to gain the passport. Just a thought.

[Anonymous]

Max out retirement and pay down your mortgage.

[Anonymous]

Anonymous wrote:You could get a secondary passport and dump the money into an investment account overseas to gain the passport. Just a thought.

You have to report that income to the IRS.

-signed spouse of dual citizen who has money overseas

[Anonymous]

Anonymous wrote:Max out retirement and pay down your mortgage.

You could do this but then the equity of the house increases. You have to file for aid every year. I don't know how much impact moving the money from your bank account to your mortgage would be to the EFC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Max out retirement and pay down your mortgage.

You could do this but then the equity of the house increases. You have to file for aid every year. I don't know how much impact moving the money from your bank account to your mortgage would be to the EFC.

I know Princeton doesn’t count home equity…assume there are a couple others.

I don’t know your interest rate, but maybe you want to refinance to a smaller mortgage amount vs just paying it down…this will at least lower your monthly mortgage payment to ease CF.

Not a great option to replace sub-3% with 6%+….but a good trade off if you are at 5%.

[Anonymous]

You’re not getting FA even if you try to hide your cash savings. You have healthy 529s and a healthy income. DD got zero, not even subsidized loans with a HHI under 200k and less assets. You’re not who FA is aimed at. We now have 2 kids in college and zero aid.

[Anonymous]

you could get new teeth.

[Anonymous]

or prepay for your funeral.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We currently have $200,000 in cash and stocks, and only $160,000 in two 529s for our kids who are starting college this year and next ($80,000 each.) We originally kept the $200,000 as an emergency fund, but now we realize that amount of cash is really hurting our changes for financial aid. (I know this because I've played around with the net price calculator for the expensive SLAC that my younger kid is interested in.)

I'm trying to figure out how to reduce our cash holdings. My options are:

1-Put all the money into retirement accounts and pay college only out of cashflow, but that puts us in a very tight spot with college payments if our income suddenly drops or if college ends up costing more than anticipated.
2-Put all the money into the 529s, and then use the cashflow we were planning to use for college to boost our retirement savings (so it doesn't end up accumulating as cash.)


I guess my question is, is there a downside to simply dumping $200,000 of cash into the 529 plans in a single year, before the first kid starts college? Will it trigger some kind of tax spike or raise a red flag for the colleges?

I wish that I could speak to you and to your kids in private.

Without privacy, can you share your kids' anticipated college majors and career plans if known ?

You just know the poster is above board when they are not comfortable making their advice public.

Sleaze meet sleaze.

Nothing sleazy about a private discussion when information--such as the particular LAC desired by one child--should remain confidential.

Specific school, major, & career plans matter.

Without more specific info., OP should consider whether paying full tuition for any LAC is worth it and whether the particular LAC is worth full tuition in light of a particular major, career plans, and likelihood of grad school.

The short version: OP, if you have to ask, you cannot afford to send two kids to private LACs at full tuition. You need to search out schools with merit aid which will fit for your kids goals & interests if you prefer a private school.

[Anonymous]

OP, why do you think you shouldn't have to spend your savings for college?

Why do you think colleges should give you free money over needy families with much lower incomes?

[Anonymous]

Anonymous wrote:OP, why do you think you shouldn't have to spend your savings for college?

Why do you think colleges should give you free money over needy families with much lower incomes?

Not OP but the colleges don’t even think you need to spend all your non-retirement savings. That’s why it’s only assessed at 5ish%. Why do you want to protect Harvard’s massive tax protected endowment over OP’s savings?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, why do you think you shouldn't have to spend your savings for college?

Why do you think colleges should give you free money over needy families with much lower incomes?

Not OP but the colleges don’t even think you need to spend all your non-retirement savings. That’s why it’s only assessed at 5ish%. Why do you want to protect Harvard’s massive tax protected endowment over OP’s savings?

OP here. Thanks PP your point about Havard's massive endownment vs our "wealth" is exactly right.

Those numbers might seem high to some folks in this thread but we are really not super wealthy at all, we drive old cars, live in a small house and don't spend money frivolously at all. It's not like we had high incomes our whole lives, all you judgers have no idea what our financial history is. And also, our savings ARE retirement. Just because we stupidly kept them in a bank account doesn't mean we don't need them for retirement, which is sorely underfunded.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, why do you think you shouldn't have to spend your savings for college?

Why do you think colleges should give you free money over needy families with much lower incomes?

Not OP but the colleges don’t even think you need to spend all your non-retirement savings. That’s why it’s only assessed at 5ish%. Why do you want to protect Harvard’s massive tax protected endowment over OP’s savings?

OP here. Thanks PP your point about Havard's massive endownment vs our "wealth" is exactly right.

Those numbers might seem high to some folks in this thread but we are really not super wealthy at all, we drive old cars, live in a small house and don't spend money frivolously at all. It's not like we had high incomes our whole lives, all you judgers have no idea what our financial history is. And also, our savings ARE retirement. Just because we stupidly kept them in a bank account doesn't mean we don't need them for retirement, which is sorely underfunded.

Then why allow one of your kids to entertain the thought of expectation of attending an unaffordable dream school ?

Any major or career plans ?

Is grad school likely ?

[Anonymous]

Anonymous wrote:or prepay for your funeral.

now we're talking.

[Anonymous]

OP, our HHI is less than yours, but we were also looking at how to full pay $80k/yr for private college. My kid just decided to go in state. I tossed all my spreadsheets and my anxiety. I did give them the choice, but man, the relief is real. I highly recommend it!

Whether you are in Maryland or VA, there are a whole range of public schools. Have your kid look.