Financial aid if you own a house but don’t live in it

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - call the financial aid office of the school (s) you are interested in to find out how they calculate financial aid for your specific situation. And if you don't like the answer, move on.

Nothing in life is fair. I'd rather be in your position (of having significant equity in my home) than that of a family who has rented their entire lives in a squalid apartment because they can't afford a home of their own. Do you think you deserve more financial aid than they do?

Of course I don’t think I deserve that. I would assume that family has lower income than mine, since my income would stretch to renting a decent apartment. I would like to think that my kid deserves the same opportunity as a family of a similar size with a similar income and similar savings who is doesn’t face an emergency situation that requires them to live outside their home.

Most schools will also take into consideration other expenses as well as assets. So for example if a family is facing a medical situation where they have to move to be near a treatment center, they can report all those medical expenses. If you’re not sure how to handle your situation, call the school and explain it. If you are facing a true emergency situation, schools can help you navigate how to explain that and take it into consideration. No guarantee, of course, because the house is still an asset that could be sold but you are choosing not to. But talk to the school, not DCUM. We don’t know the specifics of your “emergency” or how a given school might adjust for it.

Every family that has equity in their home could sell it to pay for college.

[Anonymous]

I dont get shielding primary home.

This idea - "we dont expect you to sell your home" is so weird. They do expect you to sell your stocks. It pretends like there aren't completely normal financial tools to take some money out of your equity.

If you had a huge run up in your equity, any equity, take some off the table and pay your bill.

If you've decided to hide all your millions into a 10 million dollar house because some schools ignore that or cap it at some multiple of income, gross. Let's fix that loophole.

Either way, it's weird. Buying an investment property is something middle class families have done for generations - it far predates mutual funds even.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - call the financial aid office of the school (s) you are interested in to find out how they calculate financial aid for your specific situation. And if you don't like the answer, move on.

Nothing in life is fair. I'd rather be in your position (of having significant equity in my home) than that of a family who has rented their entire lives in a squalid apartment because they can't afford a home of their own. Do you think you deserve more financial aid than they do?

Of course I don’t think I deserve that. I would assume that family has lower income than mine, since my income would stretch to renting a decent apartment. I would like to think that my kid deserves the same opportunity as a family of a similar size with a similar income and similar savings who is doesn’t face an emergency situation that requires them to live outside their home.

Most schools will also take into consideration other expenses as well as assets. So for example if a family is facing a medical situation where they have to move to be near a treatment center, they can report all those medical expenses. If you’re not sure how to handle your situation, call the school and explain it. If you are facing a true emergency situation, schools can help you navigate how to explain that and take it into consideration. No guarantee, of course, because the house is still an asset that could be sold but you are choosing not to. But talk to the school, not DCUM. We don’t know the specifics of your “emergency” or how a given school might adjust for it.

Every family that has equity in their home could sell it to pay for college.

or borrow against it. or refi their mortgage. or take out of HELOC. it's an asset that's actually far more flexible than stocks - which are totality hit in FA calculations. Those you have to sell and take a cap gain hit on. And lock in the price that moment. Using a home is really a lot easier.

[Anonymous]

Anonymous wrote:I dont get shielding primary home.

This idea - "we dont expect you to sell your home" is so weird. They do expect you to sell your stocks. It pretends like there aren't completely normal financial tools to take some money out of your equity.

they don't if the stocks are in retirement like 401k or ira.

[Anonymous]

You live in another house that you don't own? What does that mean? Are you renting? Are you paying fair market rent? Is it rent free? Is it a home you will inherit one day? Are you taking care of someone in the home who is paying the expenses?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I dont get shielding primary home.

This idea - "we dont expect you to sell your home" is so weird. They do expect you to sell your stocks. It pretends like there aren't completely normal financial tools to take some money out of your equity.

they don't if the stocks are in retirement like 401k or ira.

but why should they care? it really favors white collar people who have had jobs that allowed this - and maybe even matched this. you need earned income to even do this. so that leaves out a lot of people. or maybe some people couldn't contribute during a period of years in their life. and then they make some windfall - they sell that business or get an inheritance. You can't shift that much into a retirement account, but you might very well consider that money your retirement.

I just dont know why colleges care. It's classist.

if you have 100k in your vanguard account and 10 million in your retirement and a 4 million home, you get FA?
but if you work as a nanny,, rent, have nothing saved, and win a 2mm lottery, you pay full price.

so bizarre to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I dont get shielding primary home.

This idea - "we dont expect you to sell your home" is so weird. They do expect you to sell your stocks. It pretends like there aren't completely normal financial tools to take some money out of your equity.

they don't if the stocks are in retirement like 401k or ira.

but why should they care? it really favors white collar people who have had jobs that allowed this - and maybe even matched this. you need earned income to even do this. so that leaves out a lot of people. or maybe some people couldn't contribute during a period of years in their life. and then they make some windfall - they sell that business or get an inheritance. You can't shift that much into a retirement account, but you might very well consider that money your retirement.

no, self-employed people can contribute to (self employ) 401k and IRAs

Yes it may be strange. But not anymore strange than the holistic admissions process that precedes it.

[Anonymous]

Anonymous wrote:You live in another house that you don't own? What does that mean? Are you renting? Are you paying fair market rent? Is it rent free? Is it a home you will inherit one day? Are you taking care of someone in the home who is paying the expenses?

My kids and I live in someone else’s home. I do do some caretaking and pay what is probably market rent for the two bedrooms we use but is less than what I receive in rent for my own home. I do not expect to inherit from the person I live with.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I dont get shielding primary home.

This idea - "we dont expect you to sell your home" is so weird. They do expect you to sell your stocks. It pretends like there aren't completely normal financial tools to take some money out of your equity.

they don't if the stocks are in retirement like 401k or ira.

but why should they care? it really favors white collar people who have had jobs that allowed this - and maybe even matched this. you need earned income to even do this. so that leaves out a lot of people. or maybe some people couldn't contribute during a period of years in their life. and then they make some windfall - they sell that business or get an inheritance. You can't shift that much into a retirement account, but you might very well consider that money your retirement.

no, self-employed people can contribute to (self employ) 401k and IRAs

Yes it may be strange. But not anymore strange than the holistic admissions process that precedes it.

of course. that's what we do. but there are people with much lower earned income who can't do this ie most Americans.

and for sure some people have access to mega back door Roths than other people. I had a lawyer friend who, in one year, shifted over 1mm into a roth (on income that was under 250k).

as usual, some rich people can find loopholes.

just dont know why we protect any one thing over another. it should be much simpler - spell out how much ALL your assets are worth and then colleges can take 1 or 2 percent instead of 5.6% of non-protected assets and 0% of your home or retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I dont get shielding primary home.

This idea - "we dont expect you to sell your home" is so weird. They do expect you to sell your stocks. It pretends like there aren't completely normal financial tools to take some money out of your equity.

they don't if the stocks are in retirement like 401k or ira.

but why should they care? it really favors white collar people who have had jobs that allowed this - and maybe even matched this. you need earned income to even do this. so that leaves out a lot of people. or maybe some people couldn't contribute during a period of years in their life. and then they make some windfall - they sell that business or get an inheritance. You can't shift that much into a retirement account, but you might very well consider that money your retirement.

no, self-employed people can contribute to (self employ) 401k and IRAs

Yes it may be strange. But not anymore strange than the holistic admissions process that precedes it.

of course. that's what we do. but there are people with much lower earned income who can't do this ie most Americans.

and for sure some people have access to mega back door Roths than other people. I had a lawyer friend who, in one year, shifted over 1mm into a roth (on income that was under 250k).

as usual, some rich people can find loopholes.

just dont know why we protect any one thing over another. it should be much simpler - spell out how much ALL your assets are worth and then colleges can take 1 or 2 percent instead of 5.6% of non-protected assets and 0% of your home or retirement.

But at least we're not India or China or Korea and we admit strictly on an entrance exam and charge reasonable tuition

right? right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP - call the financial aid office of the school (s) you are interested in to find out how they calculate financial aid for your specific situation. And if you don't like the answer, move on.

Nothing in life is fair. I'd rather be in your position (of having significant equity in my home) than that of a family who has rented their entire lives in a squalid apartment because they can't afford a home of their own. Do you think you deserve more financial aid than they do?

Of course I don’t think I deserve that. I would assume that family has lower income than mine, since my income would stretch to renting a decent apartment. I would like to think that my kid deserves the same opportunity as a family of a similar size with a similar income and similar savings who is doesn’t face an emergency situation that requires them to live outside their home.

All kids deserve the same, but that's not how life works. Ours will go to state schools. There is also community college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - call the financial aid office of the school (s) you are interested in to find out how they calculate financial aid for your specific situation. And if you don't like the answer, move on.

Nothing in life is fair. I'd rather be in your position (of having significant equity in my home) than that of a family who has rented their entire lives in a squalid apartment because they can't afford a home of their own. Do you think you deserve more financial aid than they do?

Of course I don’t think I deserve that. I would assume that family has lower income than mine, since my income would stretch to renting a decent apartment. I would like to think that my kid deserves the same opportunity as a family of a similar size with a similar income and similar savings who is doesn’t face an emergency situation that requires them to live outside their home.

All kids deserve the same, but that's not how life works. Ours will go to state schools. There is also community college.

Cmon, why stop there? There is also flipping burgers ....

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - call the financial aid office of the school (s) you are interested in to find out how they calculate financial aid for your specific situation. And if you don't like the answer, move on.

Nothing in life is fair. I'd rather be in your position (of having significant equity in my home) than that of a family who has rented their entire lives in a squalid apartment because they can't afford a home of their own. Do you think you deserve more financial aid than they do?

Of course I don’t think I deserve that. I would assume that family has lower income than mine, since my income would stretch to renting a decent apartment. I would like to think that my kid deserves the same opportunity as a family of a similar size with a similar income and similar savings who is doesn’t face an emergency situation that requires them to live outside their home.

Most schools will also take into consideration other expenses as well as assets. So for example if a family is facing a medical situation where they have to move to be near a treatment center, they can report all those medical expenses. If you’re not sure how to handle your situation, call the school and explain it. If you are facing a true emergency situation, schools can help you navigate how to explain that and take it into consideration. No guarantee, of course, because the house is still an asset that could be sold but you are choosing not to. But talk to the school, not DCUM. We don’t know the specifics of your “emergency” or how a given school might adjust for it.

Every family that has equity in their home could sell it to pay for college.

They should have a limit to around $400-500K. If you choose a more expensive home, you should not get financial aid over some who chooses to live more modestly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - call the financial aid office of the school (s) you are interested in to find out how they calculate financial aid for your specific situation. And if you don't like the answer, move on.

Nothing in life is fair. I'd rather be in your position (of having significant equity in my home) than that of a family who has rented their entire lives in a squalid apartment because they can't afford a home of their own. Do you think you deserve more financial aid than they do?

Of course I don’t think I deserve that. I would assume that family has lower income than mine, since my income would stretch to renting a decent apartment. I would like to think that my kid deserves the same opportunity as a family of a similar size with a similar income and similar savings who is doesn’t face an emergency situation that requires them to live outside their home.

All kids deserve the same, but that's not how life works. Ours will go to state schools. There is also community college.

Cmon, why stop there? There is also flipping burgers ....

And, if my spouse and I need to flip burgers to help pay for college that is what we will do...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It counts as an asset and will hurt your chances of FA. You can sell it or borrow against it.
Unfortunately, you'd be better off living in ithe house you own because some colleges give generous exemptions for the value of the house you actually live in.

What happens to other families who have periods where they can’t live in their homes? Children of Foreign service Officers, or people who need to live near transplant centers because they have a child who is on a waiting list, or whatever reason. (Neither of those is my actual reason but it’s similar in that it’s truly not a choice). It seems unfair that everyone else can shelter hundreds of thousands of dollars worth of assets and we can’t, because I will need those assets in retirement or an emergency as much as anyone else.

+1 Perhaps hire a financial aid counselor. Your situation isn't the norm, but if you have a lot of equity in a house, yes, you have to report it and yes, that will be an indication of wealth. And not sure how people are sheltering hundreds of thousands of dollars worth of assets legally on a financial aid form...

If you have hundreds of thousands of dollars in equity in your house that you live in that’s sheltered. It’s not taken into account on your financial
aid application.

We are a solidly middle class family, but we bought our house 15 years ago, so between 15 years of mortgage payments and 15 years of appreciation I own a large percentage of it. It just seems unfair that other families whose financial situations might be identical other than the fact that they live in their house would get significantly more aid.

I highly doubt you are solidly middle class. Many who claim that make $150-400K. OP sounds lower income so they would probably qualify regardless of the house.