"Typical Assets" as considered by University Financial Aid departments

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figured for most schools it was about 200-250k. One school publishes that (maybe Princeton) and when I did a lot of NPCs, that number seemed to be the line. Then it ramps up after that.

It's all pretty classist, imo. A two income family making 200k gets a lot of aid per marketing materials at these schools. And if you have a million dollar home? Fine! But if you have 400k in an account because grandma died? Not okay. You could drive an uber, have zero retirement, zero assets, and win a 1million dollar lottery and have to pay Princeton full fare. But if you had a million dollar house and 3 million in retirement, you'd get aid.

This might me the dumbest post I've ever read on this topic, and there's some pretty stiff competition.

In the first scenario, yes, if you inherit money it is considered an asset, and you will be expected to use it for college. Why on earth wouldn't you be?

And in the second scenario, yes, you are expected to use your lottery winnings (!!) to pay for college. Good lord.

I call bullshit. If I'm feeling irritated that my full freight tuition payments are essentially paying for not only my kid to attend college, but also paying for 2 - 3 of their cohort, I have a right to question why the overall cost of college has become sky high. And that's after reckoning with the fact that the income and assets being used against me in the tuition calculation process were already used against my kid in the admissions process.

If you took the total cost to run a top private school and distributed that over the entire student body, the average annual cost to each family would be no more than $20 - $30K (and not $90K+) ...

I know. Boo hoo. "Great problem" to have. Whatever.

Did . . . you respond to the wrong post?

[Anonymous]

Anonymous wrote:It's my understanding that each college calculates a family's assets differently, which can result in very different financial aid packages. This is particularly true for home equity.

I work for the government and have a middle-class income. But the house that I bought in 2014 has more than doubled in value, making it a seemingly big asset on paper. It's far from the worst problem to have. Still, for a school like Vassar, it means we'd get almost no financial aid. On the other hand, Skidmore does not seem factor in home equity in the same manner, and thus provides more than twice as much financial aid despite having a much smaller endowment than Vassar. These are just two examples, but I've gotten very different financial aid estimates from peer schools.

Anyhow, most people can get a pretty good sense of potential financial aid by taking out their tax returns and using a school's Net Price Calculator. I've found that many school's financial aid officers are very willing to have a call or Zoom to discuss things in greater depth.

What do you consider middle class? How much did you pay for your house? Middle class is not $150K for one parent a year.

[Anonymous]

Our non-retirement stock portfolio sunk us. Full pay it is (with a little merit to swallow the pill).

Obviously it's nicer to have the portfolio and be full-pay than not have the portfolio and receive aid. I keep that thought front and center!!! Makes it easier to pay the bill twice a year

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figured for most schools it was about 200-250k. One school publishes that (maybe Princeton) and when I did a lot of NPCs, that number seemed to be the line. Then it ramps up after that.

It's all pretty classist, imo. A two income family making 200k gets a lot of aid per marketing materials at these schools. And if you have a million dollar home? Fine! But if you have 400k in an account because grandma died? Not okay. You could drive an uber, have zero retirement, zero assets, and win a 1million dollar lottery and have to pay Princeton full fare. But if you had a million dollar house and 3 million in retirement, you'd get aid.

This might me the dumbest post I've ever read on this topic, and there's some pretty stiff competition.

In the first scenario, yes, if you inherit money it is considered an asset, and you will be expected to use it for college. Why on earth wouldn't you be?

And in the second scenario, yes, you are expected to use your lottery winnings (!!) to pay for college. Good lord.

I call bullshit. If I'm feeling irritated that my full freight tuition payments are essentially paying for not only my kid to attend college, but also paying for 2 - 3 of their cohort, I have a right to question why the overall cost of college has become sky high. And that's after reckoning with the fact that the income and assets being used against me in the tuition calculation process were already used against my kid in the admissions process.

If you took the total cost to run a top private school and distributed that over the entire student body, the average annual cost to each family would be no more than $20 - $30K (and not $90K+) ...

I know. Boo hoo. "Great problem" to have. Whatever.

Did . . . you respond to the wrong post?

Maybe. Thought it was adjacent enough to the idea of "Just be happy you can afford to pay!" to respond ...

[Anonymous]

I see no difference btw 2mm in wealth in your vanguard retirement account and 2mm in your home and 2mm in lottery winnings in non-retirement (you can’t put it in retirement beyond 7k a year).


We’re all saving money for the same thing - our future.

I don’t know why colleges care. Instead of taking 5% of non retirement and maybe home equity blah blah, they should take a flat 2% of everything. You can borrow against any asset.

[Anonymous]

Anonymous wrote:I see no difference btw 2mm in wealth in your vanguard retirement account and 2mm in your home and 2mm in lottery winnings in non-retirement (you can’t put it in retirement beyond 7k a year).


We’re all saving money for the same thing - our future.

I don’t know why colleges care. Instead of taking 5% of non retirement and maybe home equity blah blah, they should take a flat 2% of everything. You can borrow against any asset.

Because as a matter of public policy, requiring parents to use retirement assets is A Very Bad Idea. We *want* people to (i) save for retirement, and (ii) have sufficient funds to live on in retirement. If someone is has two kids, and knows that a significant portion of any retirement assets they save are going to be diverted to pay for college, that disincentivizes retirement savings. Then, we have a retirement crisis, in addition to higher education costs further spiraling.

I'm with you on the homes, though.

[Anonymous]

A lot of people - most people - don’t feel secure enough to tie up money for decades.

And most people don’t have jobs w 401ks. Nevermind jobs that have employers contribute. I haven’t since I was 23. DH either. We have solo stuff but I mostly paid down mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I see no difference btw 2mm in wealth in your vanguard retirement account and 2mm in your home and 2mm in lottery winnings in non-retirement (you can’t put it in retirement beyond 7k a year).


We’re all saving money for the same thing - our future.

I don’t know why colleges care. Instead of taking 5% of non retirement and maybe home equity blah blah, they should take a flat 2% of everything. You can borrow against any asset.

Because as a matter of public policy, requiring parents to use retirement assets is A Very Bad Idea. We *want* people to (i) save for retirement, and (ii) have sufficient funds to live on in retirement. If someone is has two kids, and knows that a significant portion of any retirement assets they save are going to be diverted to pay for college, that disincentivizes retirement savings. Then, we have a retirement crisis, in addition to higher education costs further spiraling.

I'm with you on the homes, though.

Yes, well what if our home is our main retirement asset? How is that fair?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see no difference btw 2mm in wealth in your vanguard retirement account and 2mm in your home and 2mm in lottery winnings in non-retirement (you can’t put it in retirement beyond 7k a year).


We’re all saving money for the same thing - our future.

I don’t know why colleges care. Instead of taking 5% of non retirement and maybe home equity blah blah, they should take a flat 2% of everything. You can borrow against any asset.

Because as a matter of public policy, requiring parents to use retirement assets is A Very Bad Idea. We *want* people to (i) save for retirement, and (ii) have sufficient funds to live on in retirement. If someone is has two kids, and knows that a significant portion of any retirement assets they save are going to be diverted to pay for college, that disincentivizes retirement savings. Then, we have a retirement crisis, in addition to higher education costs further spiraling.

I'm with you on the homes, though.

Yes, well what if our home is our main retirement asset? How is that fair?

Well, a home isn't a "retirement asset" - it's an asset that you plan to use for retirement. A retirement asset is one that is given preferential tax treatment by the IRC.

And that's really the crux of it. Colleges don't want to be in the business of determining what constitutes a "retirement asset" for every family (and not only because every family will argue that every asset is meant for retirement, so none should count). Tey have to have a bright line rule, so they use retirement accounts. That seems pretty reasonable to me.

But apart from what I think, home value isn't considered in FAFSA, and only minimally in the CSS.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see no difference btw 2mm in wealth in your vanguard retirement account and 2mm in your home and 2mm in lottery winnings in non-retirement (you can’t put it in retirement beyond 7k a year).


We’re all saving money for the same thing - our future.

I don’t know why colleges care. Instead of taking 5% of non retirement and maybe home equity blah blah, they should take a flat 2% of everything. You can borrow against any asset.

Because as a matter of public policy, requiring parents to use retirement assets is A Very Bad Idea. We *want* people to (i) save for retirement, and (ii) have sufficient funds to live on in retirement. If someone is has two kids, and knows that a significant portion of any retirement assets they save are going to be diverted to pay for college, that disincentivizes retirement savings. Then, we have a retirement crisis, in addition to higher education costs further spiraling.

I'm with you on the homes, though.

Yes, well what if our home is our main retirement asset? How is that fair?

Well, a home isn't a "retirement asset" - it's an asset that you plan to use for retirement. A retirement asset is one that is given preferential tax treatment by the IRC.

And that's really the crux of it. [b]Colleges don't want to be in the business of determining what constitutes a "retirement asset" for every family (and not only because every family will argue that every asset is meant for retirement, so none should count). Tey have to have a bright line rule, so they use retirement accounts. That seems pretty reasonable to me.

But apart from what I think, home value isn't considered in FAFSA, and only minimally in the CSS.

It seems reasonable to you, because we’re used to it. Why use this at all? I don’t buy a home based on my income. My knee replacement isn’t by HHI. My IRA isn’t “sheltered” when figuring out the price for .. anything but college.

Why not just price college lower? With state school options and low rate government loans? This is a crazy “only in America” system. Let’s be more like Canada. Or anywhere! Tell us the price upfront!!

[Anonymous]

Anonymous wrote:What do you consider middle class? How much did you pay for your house? Middle class is not $150K for one parent a year.

Other than providing fodder for a digressive argument, do any of the answers to your questions really matter? The OP asked about how colleges calculate assets. Viewing this as a practical question, I tried to provide an answer addressing the home-equity component, which is often the largest variable is asset calculations. For us, home equity was an X factor in determining whether we could afford a given college. So I ran dozens of NPCs, spoke to financial aid officers, and using this information, ultimately set the financial parameters on my kids' potential college list. I'm not complaining or criticizing; I'm just trying to understand the system and navigate it as best I can.

[Anonymous]

Anonymous wrote:Per Columbia’s website:

“When determining the parent contribution, we take into consideration the parents’ assets which include cash, savings, checking, investments, home equity, other real estate (other than home) equity, and business equity. We do not include retirement assets (i.e., 401K, 403b, IRA, Keogh) in our analysis.

For families with an income of $100,000, we would consider typical assets to be approximately $250,000.”

So if you bought your house awhile ago, you’re potentially in trouble just with the equity, depending on how they calculate it.

I believe Princeton’s “typical asset” threshold is a lot lower than Columbia. I think around $125k or $150k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Per Columbia’s website:

“When determining the parent contribution, we take into consideration the parents’ assets which include cash, savings, checking, investments, home equity, other real estate (other than home) equity, and business equity. We do not include retirement assets (i.e., 401K, 403b, IRA, Keogh) in our analysis.

For families with an income of $100,000, we would consider typical assets to be approximately $250,000.”

So if you bought your house awhile ago, you’re potentially in trouble just with the equity, depending on how they calculate it.

I believe Princeton’s “typical asset” threshold is a lot lower than Columbia. I think around $125k or $150k.

Yes. But home equity for primary residence is excluded at Princeton.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figured for most schools it was about 200-250k. One school publishes that (maybe Princeton) and when I did a lot of NPCs, that number seemed to be the line. Then it ramps up after that.

It's all pretty classist, imo. A two income family making 200k gets a lot of aid per marketing materials at these schools. And if you have a million dollar home? Fine! But if you have 400k in an account because grandma died? Not okay. You could drive an uber, have zero retirement, zero assets, and win a 1million dollar lottery and have to pay Princeton full fare. But if you had a million dollar house and 3 million in retirement, you'd get aid.

This might me the dumbest post I've ever read on this topic, and there's some pretty stiff competition.

In the first scenario, yes, if you inherit money it is considered an asset, and you will be expected to use it for college. Why on earth wouldn't you be?

And in the second scenario, yes, you are expected to use your lottery winnings (!!) to pay for college. Good lord.

I call bullshit. If I'm feeling irritated that my full freight tuition payments are essentially paying for not only my kid to attend college, but also paying for 2 - 3 of their cohort, I have a right to question why the overall cost of college has become sky high. And that's after reckoning with the fact that the income and assets being used against me in the tuition calculation process were already used against my kid in the admissions process.

If you took the total cost to run a top private school and distributed that over the entire student body, the average annual cost to each family would be no more than $20 - $30K (and not $90K+) ...

I know. Boo hoo. "Great problem" to have. Whatever.

With you, Bruh. Whatever.

[Anonymous]

Anonymous wrote:It's my understanding that each college calculates a family's assets differently, which can result in very different financial aid packages. This is particularly true for home equity.

I work for the government and have a middle-class income. But the house that I bought in 2014 has more than doubled in value, making it a seemingly big asset on paper. It's far from the worst problem to have. Still, for a school like Vassar, it means we'd get almost no financial aid. On the other hand, Skidmore does not seem factor in home equity in the same manner, and thus provides more than twice as much financial aid despite having a much smaller endowment than Vassar. These are just two examples, but I've gotten very different financial aid estimates from peer schools.

Anyhow, most people can get a pretty good sense of potential financial aid by taking out their tax returns and using a school's Net Price Calculator. I've found that many school's financial aid officers are very willing to have a call or Zoom to discuss things in greater depth.

We noticed that Wesleyan offered much better FA than Vassar (18k less per year). Also beat out 3 T15 universities. Both were less than NPC.