Do families with $250K in income get financial aid? If not, how do they afford college?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:we make about 275k and receive 40k in aid annually from princeton

Out of curiosity, how much do you have in retirement savings, and how much equity do you have in your house?

princeton does not consider primary home equity or retirement savings, which is why we can get so much in aid.

600k in home, about 1.6 million in combined retirement accounts for the two of us.

Princeton’s (and every school we checked for that matter) net price calculator gave us zero. 250k HHI, 475k in house (we purchased a home well within our comfort zone), one child, 2.3 retirement accounts, 70k in 529, cash 1.3 million…the cash disqualified us…for fun I put in a HHI of 30k…still nada.

Princeton (and the few other very generous schools) do include a disclaimer that pretty much says "with typical assets" (for your income)

That is why you don't quality even with a HHI of 30k

DP and shouldn't qualify. 1.3mil in cash is plenty for 1 kid (+70k in 529). Even at 0 income, this person shouldn't qualify for aid. Aid is need based. These people don't need it.

[Anonymous]

Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

[Anonymous]

I understand the justification to attend a top college in a full pay situation. But really the question for me is why is the direct cost for those colleges and the next tier down $85-$90k? It doesn't make any sense. Even though I can afford that without impacting retirement, I can't understand why this product (college) is that expensive compared to all the other products big and small we purchase every day. But then, I don't really understand why someone would buy a Lexus instead of a Toyota. Same thing underneath the hood. just looks a little nicer on the outside.

[Anonymous]

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

Retirement is NOT included because you CANNOT access them without a penalty. And the system smartly realizes that we need people actually saving for retirement. The amount you can put into an IRA or 401 is "limited" yearly. But you cannot access them nor should you.

And person 2 made a choice not to "shelter their savings in retirement" IT was a choice. Most making 150HHI have some form of 401K option available and everyone has an IRA available.

[Anonymous]

Anonymous wrote:I understand the justification to attend a top college in a full pay situation. But really the question for me is why is the direct cost for those colleges and the next tier down $85-$90k? It doesn't make any sense. Even though I can afford that without impacting retirement, I can't understand why this product (college) is that expensive compared to all the other products big and small we purchase every day. But then, I don't really understand why someone would buy a Lexus instead of a Toyota. Same thing underneath the hood. just looks a little nicer on the outside.

If you cannot easily afford the higher price, then you should smartly choose what is affordable to you.
Same as with the car analogy. You buy what you can afford because both get you to work/etc. Same with college....you can get your BA/BS in XYZ at a state school or at an Ivy. The difference is minimal, it's more about what you do while you are at college.

[Anonymous]

We're going to do state schools in state (free). We have good savings but it seems silly to spend them all on college when we have good free choices.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:we make about 275k and receive 40k in aid annually from princeton

Out of curiosity, how much do you have in retirement savings, and how much equity do you have in your house?

princeton does not consider primary home equity or retirement savings, which is why we can get so much in aid.

600k in home, about 1.6 million in combined retirement accounts for the two of us.

Princeton’s (and every school we checked for that matter) net price calculator gave us zero. 250k HHI, 475k in house (we purchased a home well within our comfort zone), one child, 2.3 retirement accounts, 70k in 529, cash 1.3 million…the cash disqualified us…for fun I put in a HHI of 30k…still nada.

understatement of the year

475k is the equity, not purchase price.

so you are carrying debt on your home while sitting on million+ in cash?

Because my mortgage rate is very low compared to the near 6% we are getting in CDs and the like.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:we make about 275k and receive 40k in aid annually from princeton

Out of curiosity, how much do you have in retirement savings, and how much equity do you have in your house?

princeton does not consider primary home equity or retirement savings, which is why we can get so much in aid.

600k in home, about 1.6 million in combined retirement accounts for the two of us.

Princeton’s (and every school we checked for that matter) net price calculator gave us zero. 250k HHI, 475k in house (we purchased a home well within our comfort zone), one child, 2.3 retirement accounts, 70k in 529, cash 1.3 million…the cash disqualified us…for fun I put in a HHI of 30k…still nada.

understatement of the year

475k is the equity, not purchase price.

so you are carrying debt on your home while sitting on million+ in cash?

That makes perfect sense if mortgage rate is low like 4%. The cash can make you money at higher rate hence positive cash flow.

This. Thank you.

[Anonymous]

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

\

Cost of living!!! without stating the obvious, a $250k HHI is widely different in NYC, DC, San Fran than the middle of nowhere or a small town in the midwest, south.

I never could understand why COL/location isn't part of the calculus. I mean where you live also can get you in the school---the same places that are remote and not many applying from also get into the school at much higher rates.

When houses in your county/city average $1 million and rent is 3X the national average---you aren't living like kings on $250k like people with a brand new 4,000 square foot house they purchased for $275k.

[Anonymous]

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

That’s the exact opposite of this scenario. People who save for retirement are the opposite of slaughtered. People who essentially keep a huge pile of cash around are expected to use it for college, yes. It’s not “sheltering”, it’s “saving responsibly”. If you have saved up $1.5 million because you really want that private jet or whatever, yes you should use that money to educate your child. If you have saved up $1.5 million so that you won’t be eating cat food when you retire, you are not expected to use that money. Seems perfectly fair to me.

I don’t know why on earth your theoretical person has no retirement savings and $1.5m lying around much as that choice has tax implications, it also has financial aid implications.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

\

Cost of living!!! without stating the obvious, a $250k HHI is widely different in NYC, DC, San Fran than the middle of nowhere or a small town in the midwest, south.

I never could understand why COL/location isn't part of the calculus. I mean where you live also can get you in the school---the same places that are remote and not many applying from also get into the school at much higher rates.

When houses in your county/city average $1 million and rent is 3X the national average---you aren't living like kings on $250k like people with a brand new 4,000 square foot house they purchased for $275k.

I think COL may be part of the calculation at CSS schools.
As for 250k, it's still well off, even in DC. If we can manage on half that in MoCo, then 250k should still be UMC, even in dmv.
We are savers. More in retirement but a good amount in 529s. 2 kids at Ivies with good FA. Savings did not hurt us because they are reasonable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

\

Cost of living!!! without stating the obvious, a $250k HHI is widely different in NYC, DC, San Fran than the middle of nowhere or a small town in the midwest, south.

I never could understand why COL/location isn't part of the calculus. I mean where you live also can get you in the school---the same places that are remote and not many applying from also get into the school at much higher rates.

When houses in your county/city average $1 million and rent is 3X the national average---you aren't living like kings on $250k like people with a brand new 4,000 square foot house they purchased for $275k.

I think COL may be part of the calculation at CSS schools.
As for 250k, it's still well off, even in DC. If we can manage on half that in MoCo, then 250k should still be UMC, even in dmv.
We are savers. More in retirement but a good amount in 529s. 2 kids at Ivies with good FA. Savings did not hurt us because they are reasonable.

Just curious: how much saved for retirement, and how much in savings?

[Anonymous]

Rich parents.

I have friends who work in gov't/int'l development. They do relatively well living in DC because they had their university costs fully funded by parents and given financial gifts for housing down payments. They also have grandparents who are working towards their kids' 529 savings, which supplements act they are able to save.

This is not an uncommon scenario in this area. When grandparents foot the bill, anything is possible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

\

Cost of living!!! without stating the obvious, a $250k HHI is widely different in NYC, DC, San Fran than the middle of nowhere or a small town in the midwest, south.

I never could understand why COL/location isn't part of the calculus. I mean where you live also can get you in the school---the same places that are remote and not many applying from also get into the school at much higher rates.

When houses in your county/city average $1 million and rent is 3X the national average---you aren't living like kings on $250k like people with a brand new 4,000 square foot house they purchased for $275k.

YOU CAN get cheaper housing, you choose not to. So, when you make that money and scream poverty, that's on you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can we just agree that paying for college and the process to qualify for financial aid is one of, if not the most, effed up processes in America? Why are retirement assets not counted? If person 1 has HHI of $150k has the ability to shelter all their savings of $1.5M in a 401k and IRA, Princeton costs almost nothing. Person 2 has that same $150k HHI, but the same savings of $1.5M are unsheltered. They are full pay. And lifetime spending/saving choices with the same income have dramatically different financial aid outcomes, with savers being slaughtered. Spouse and I made peace with and accepted this insanity years ago. We have high income and good savings both in and out of retirement funds. We could do a fully pay private but have long tried to educate DS on the college value proposition. DS will attend UMD this Fall.

\

Cost of living!!! without stating the obvious, a $250k HHI is widely different in NYC, DC, San Fran than the middle of nowhere or a small town in the midwest, south.

I never could understand why COL/location isn't part of the calculus. I mean where you live also can get you in the school---the same places that are remote and not many applying from also get into the school at much higher rates.

When houses in your county/city average $1 million and rent is 3X the national average---you aren't living like kings on $250k like people with a brand new 4,000 square foot house they purchased for $275k.

I think COL may be part of the calculation at CSS schools.
As for 250k, it's still well off, even in DC. If we can manage on half that in MoCo, then 250k should still be UMC, even in dmv.
We are savers. More in retirement but a good amount in 529s. 2 kids at Ivies with good FA. Savings did not hurt us because they are reasonable.

We got zero financial aid at Ivies.