Anyone making a 6-figure salary (combined or not) receiving financial aid?

[Anonymous]

Since we dont' have any retirement savings (I know I know that is terrible) I'm not 100% sure but from what I read they do not hold against you for a certain amount of retirement and I assume that is why they ask for you and DH's age. So if you have $ 100,000 in retirement and your 40 years old that is totally fine and won't be held against you (the normal amount I assume is what the IRS allows each year---$ 15,000 or so per person). They just want to make sure you don't have your normal retirement (the 15k per yr I just mentioned) and on top have IRA's with a few hundred thousand sitting in there. As you probably already know, you can tap into your IRA's for education purposes but would be penalized for taping into your retirment. So if you have IRA's with lots of money in them they would take that into account.

[Anonymous]

Friends of mine recently sent two of their kids to college. They told me the lesson they learned is that you are better off NOT having any savings for college because then you DON'T ever qualify for ANY kind of aid. If you have savings, they "hold it against you'.

Again, kind of a warped perspective I think, b/c it is not really based on NEED. But something to think about as you allocate your budget!

[Anonymous]

Do these 200k families have two working parents? Would the schools give aid to a family with a SAHM? Isn't that unfair, assuming the SAHM could go to work and make money?

[Anonymous]

Anonymous wrote:Do these 200k families have two working parents? Would the schools give aid to a family with a SAHM? Isn't that unfair, assuming the SAHM could go to work and make money?

It is not held against the SAHM if there are small children at home. If all children are school-aged, then it is expected that both parents work in order to receive financial aid.

[Anonymous]

At our school both parents must work to receive financial aid. There is no exception for those with small children.

[Anonymous]

Most schools have this info on their financial aid page. Some schools expect both parents to work no matter what the age of the kids. Some allow one parent to stay home w/ children who are not in FT school yet. They do take into account how much you contribute to your kids' college funds. That money could be spent right now on school instead of socking it away for later.

[Anonymous]

As an insider to this whole process (head of a small school that also administers the financial aid process) I think that you need to ask questions of each specific school. Many schools use SSS which has a complex formula that takes into account income, number of children, investments (other than retirement), allowable debt (such as student loan debt as opposed to consumer debt), home equity etc. After taking that into account, they arrive at an amount that they believe a particular family can afford to pay for education. So if they determine that the family contribution is $20,000 and the tuition is $12,000, you won't qualify for aid. If however, they determine that the family contribution is $20,000 and the tuition is $30,000, you would qualify for aid. However, even if you qualify, financial aid administrators need to make difficult decisions and often families do not receive the entire amount they qualify for because school's need to spread around the available scholarship funds. Therefore the administrator may make a decision to give everyone who qualifies 70% of what they qualify for rather than the full amount.

Many schools will also have a written financial aid policy that differs from school to school. It might outline whether or not returning students are preferenced over newly enrolled students or whether both parents are expected to work even if there is a baby or toddler at home or if there is an exception for there to be a stay at home parent in the case of a young child.

Our school does have slightly inflated tuition to generate funds for our scholarship fund, but our tuition is extremely low for the area ($6250) and the families at our school who are receiving aid are making in the neighborhood of $30,000-$50,000. Even so our policy states that no student will receive more than 50% financial aid because we are just unable to raise enough funds to offer full scholarships. Unfortunately, this means that every year some families must choose not to re-enroll, even though they've been awarded financial aid.

Parents who can afford to pay the tuition send their children here for many reasons, but often one of the reasons is that they want their children in an economically diverse school environment, so their commitment to that economic diversity makes them willing to pay a little more in tuition knowing that it enables a student from a low-income family to attend. And we still desperately need them to contribute to our annual appeal and our auction and other events.

In terms of donations, most schools will allow you to designate a charitable gift to a certain fund. If you designate it to operations, then it can help support faculty salaries. If you agree with the financial aid policies and processes, you can designate it to scholarship, and it will help others attend the school. Some schools also have building or facility funds that help contribute to upkeep, renovations etc.

Hope this sheds a little light for everyone on the process.