Affording College with HHI $100-$200k

[Anonymous]

Are families with HHI $100-200k still considered donut hole families or are they eligible for more FA these days?

What's the most prudent plan for affording college? Instate? Merit? Other?

[Anonymous]

A lot depends on assets. Our income is low but assets are high and we got nothing.

In every marketing line that said, “95% of families making under 150k pay 0 in tuition”, we’d say .. we’re the 5%!

[Anonymous]

Anonymous wrote:Are families with HHI $100-200k still considered donut hole families or are they eligible for more FA these days?

What's the most prudent plan for affording college? Instate? Merit? Other?

Open and regularly contribute to a 529 when you start trying to conceive the college student. Seriously.

[Anonymous]

That’s a big range OP 100k-150k will qualify for some aid. Above that the aid decreases and at 200k you’re at the start of the donut hole. Your strategy will depend also on how much money you already have saved, how many kids you have and how old they are. Also if they are stellar with top scores and grades. I would figure out how much money you can afford for college and then create a strategy from there

[Anonymous]

Anonymous wrote:A lot depends on assets. Our income is low but assets are high and we got nothing.

In every marketing line that said, “95% of families making under 150k pay 0 in tuition”, we’d say .. we’re the 5%!

This. And in markets like DC where housing value has risen rapidly, families who have owned their home for a while will be seen as having a lot of home equity they are expected to tap for college. At higher ranked schools we got some aid but still the cost was generally $60k+. Not what we considered in budget. What did fit for us (<$40k) was in-state publics and privates below the USNWR T50 that were generous with merit aid.

[Anonymous]

I've been running NPCs and it's wild how much they vary. Our household income is about 210K and it ranges from very generous to no money at all. Some schools consider home equity much more, that's likely the difference. We're planning on chasing merit, applying in state and taking a chance of a few of the generous schools (tend to be very highly selective so long shot).

[Anonymous]

Like another poster, our income is so low that we'd qualify for financial aid, but our assets are high, so we don't.

I filled out the FAFSA and CSS anyway. DS got merit aid.

[Anonymous]

We opened 529s right after they were each born. They’ll have tuition, room and board for three years in-state. Oldest has worked two summers in high school and will work over breaks. He may need to take out a small loan for whatever we can’t contribute from our paychecks for the final year. He’s applying to a couple of out of states and we’ll see what merit looks like. It could be hefty.

[Anonymous]

Anonymous wrote:A lot depends on assets. Our income is low but assets are high and we got nothing.

In every marketing line that said, “95% of families making under 150k pay 0 in tuition”, we’d say .. we’re the 5%!

Yep. Every college we visited brayed about how much financial aid they were giving away.

How about not making the cost so high in the first place, huh? That would streamline things, eliminate a ton of agonizing and hoping for aid, and make it so much more transparent.

[Anonymous]

Chances for aid decrease to zero if you own any rental properties. Lower chances if you own your own business too, or at least it complicates things. Add in money saved in 529 or other non retirement savings at 6% available, so that's not too bad. Schools consider 50% of student assets as available, so careful what grandparents gift them. Different schools have different calculations for primary home equity. Some have a cap. Some schools regard contribution to retirement accounts as a available, but depending on age of parents. Best to run the NPCs. The most prestigious schools will give the most need based financial aid at this income, part of why they get so many applications.

[Anonymous]

Anonymous wrote:Chances for aid decrease to zero if you own any rental properties. Lower chances if you own your own business too, or at least it complicates things. Add in money saved in 529 or other non retirement savings at 6% available, so that's not too bad. Schools consider 50% of student assets as available, so careful what grandparents gift them. Different schools have different calculations for primary home equity. Some have a cap. Some schools regard contribution to retirement accounts as a available, but depending on age of parents. Best to run the NPCs. The most prestigious schools will give the most need based financial aid at this income, part of why they get so many applications.

Is this 6% a year or over four years? If it's a year, then with two kids, you'd end up spending 48% of your non-retirement assets - that's something to think about!

[Anonymous]

6% per year.

Our hope was that our assets would rise in step with that and we’d be flat after 8 years and so far that’s been about true. Historically, our assets would have doubled in 8 years so I understand the cost. But we did not drawn down 48% of our assets

[Anonymous]

Anonymous wrote:
Like another poster, our income is so low that we'd qualify for financial aid, but our assets are high, so we don't.

I filled out the FAFSA and CSS anyway. DS got merit aid.

If your assets are high, aren't they generating a decent amount of interest and/or dividends (or rental payments if properties) for you? That's counted as income for tax purposes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Like another poster, our income is so low that we'd qualify for financial aid, but our assets are high, so we don't.

I filled out the FAFSA and CSS anyway. DS got merit aid.

If your assets are high, aren't they generating a decent amount of interest and/or dividends (or rental payments if properties) for you? That's counted as income for tax purposes.

I don’t have very many individual stocks w dividends and I picked etfs that don’t throw off income. I have mostly growth stocks so I have appreciation but no taxable income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Like another poster, our income is so low that we'd qualify for financial aid, but our assets are high, so we don't.

I filled out the FAFSA and CSS anyway. DS got merit aid.

If your assets are high, aren't they generating a decent amount of interest and/or dividends (or rental payments if properties) for you? That's counted as income for tax purposes.

I don’t have very many individual stocks w dividends and I picked etfs that don’t throw off income. I have mostly growth stocks so I have appreciation but no taxable income.

But it is assets. You are expected to use them for college. Up to you if you do or not. If you don't want to, then find a school you can afford.