"Typical Assets" as considered by University Financial Aid departments

[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?

Why is it fair that you get to live in a nice $1-2 million dollar house when some of us live in $400-500K sh$t shacks as we put a priority on saving for college and to save we have to live a "lesser" lifestyle of no vacations, basic home, etc.

[Anonymous]

Anonymous wrote:I don’t buy a home based on my income.

You don't?

[Anonymous]

how can a typical family in the DMV earning 200k plus have only 100k in liquid assets? Do they put everything in retirement accounts, pay down mortgages and invest heavily in the home and else spend like crazy?

Anonymous wrote:

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.