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

[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.

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.

Most Americans do not own two homes. Buying an investment property is not something "middle class" families regularly do, unless you have the DCUM definition of middle class being anyone with an income under 400K/year.

[Anonymous]

Anonymous wrote:

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.

I am OP. The post you quoted is also me. I thought it was clear but I should have said. Between my income and the survivor benefits my kids get our family income is around 100K, which is below the median for a family our size in the state where we live.

I have about $400K equity. If I leave that out of the net price calculators they say we would get need based aid at our state schools.

[Anonymous]

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.

All of this is unfair. Financial aid is not free. It's funded by others previously donating to the school, or those paying full price.

[Anonymous]

Anonymous wrote:

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.

$400-500k at what point? Our home in ffx co has gone up 40% in value since we bought it more than 15 years ago. We could not afford to buy it now. So do we get dinged for the housing market when we actually made a frugal choice?

[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.

That has to be the dumbest comment I've heard. I could sell my home today and factoring in the cost to sell that home, I might have enough to pay for 2 years of college. And then, where the hell am I supposed to live? In the street? In a crappy rental apartment that would cost more than my mortgage?

[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.

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.

Most Americans do not own two homes. Buying an investment property is not something "middle class" families regularly do, unless you have the DCUM definition of middle class being anyone with an income under 400K/year.

NP nope, but I grew up in Iowa where my grandparents owned a rental and my parents owned a rental. neither owned a stock in their lives. it's actually more common than you might imagine (imagine!)

[Anonymous]

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.

All of this is unfair. Financial aid is not free. It's funded by others previously donating to the school, or those paying full price.

nope. I feel like I'm going to post this every time now bcs it's so annoying to me. full pay does not subsidize FA at all. it costs yale 140k a year per students. ALL students are subsidized, and this is true up and down the selectivity level. Universities are helped by the donor class to some minor extend, but mostly by the tax benefits from the community and state, funding from governments, million-billionaire donations, and slow and steady gains over a century plus in investments include in the stock market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

$400-500k at what point? Our home in ffx co has gone up 40% in value since we bought it more than 15 years ago. We could not afford to buy it now. So do we get dinged for the housing market when we actually made a frugal choice?

you should get dinged exactly the same way someone who gave up some luxury to invest in apple stock 15 years ago.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I am OP. The post you quoted is also me. I thought it was clear but I should have said. Between my income and the survivor benefits my kids get our family income is around 100K, which is below the median for a family our size in the state where we live.

I have about $400K equity. If I leave that out of the net price calculators they say we would get need based aid at our state schools.

I would hope your child would get aid. Apply around to a bunch of colleges and see. $400K equity in a house is very different than $400K savings with retirement and lots of other stuff. Remember here people call themselves middle class with 2-4 times that income. Just explain the situation that you bought the house married, spouse passed away, went to live with family as they needed a caretaker and kept the house as you will need to move back into it one day when relative passes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

$400-500k at what point? Our home in ffx co has gone up 40% in value since we bought it more than 15 years ago. We could not afford to buy it now. So do we get dinged for the housing market when we actually made a frugal choice?

400-500K 15 years ago was a lot of money.

[Anonymous]

Anonymous wrote:

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.

That has to be the dumbest comment I've heard. I could sell my home today and factoring in the cost to sell that home, I might have enough to pay for 2 years of college. And then, where the hell am I supposed to live? In the street? In a crappy rental apartment that would cost more than my mortgage?

No one is expecting you to sell the house. Stop being dramatic.

[Anonymous]

Anonymous wrote:

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.

So you can run your home as a business and deduct several things a homeowner cannot: mileage, repairs, etc. Clearly, you're being coy about where you currently live because who would pay far market rent AND do some caretaking without there being more to the story? Typically it would be caretaking in lieu of rent or in lieu of market rent. One doesn't take care of a landlord in a home without something out of it (relationship connection, money, etc). Perhaps the person you are caring for is paying for private school for your kid or something else (vehicle, etc.) but no one moves out of their home, rents it, moves in with a stranger to take care of them for no benefit at all, and then pays more to live in two bedrooms in someone else's home than they would in the home they already own (and take less in rent than their monthly two bedrooms cost) so they are at a loss every month...unless the story has holes that you're not filling in on purpose.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I am OP. The post you quoted is also me. I thought it was clear but I should have said. Between my income and the survivor benefits my kids get our family income is around 100K, which is below the median for a family our size in the state where we live.

I have about $400K equity. If I leave that out of the net price calculators they say we would get need based aid at our state schools.

I would hope your child would get aid. Apply around to a bunch of colleges and see. $400K equity in a house is very different than $400K savings with retirement and lots of other stuff. Remember here people call themselves middle class with 2-4 times that income. Just explain the situation that you bought the house married, spouse passed away, went to live with family as they needed a caretaker and kept the house as you will need to move back into it one day when relative passes.

That’s not at all what happened.

[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.

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.

It's a "loophole" that doesn't need to be fixed because it doesn't happen. No one is going to put $10 million cash into a house and live on poverty level income so they can get financial aid for their kid (not to mention that most of your income would go for the upkeep of your $10 million house). If you have $10 million, you pay tuition. The real issue here is people who have modest incomes and own a home that has greatly appreciated in value. *Some* colleges (not all) have made a policy decision that they are not going to encourage people to sell or borrow against their home to pay college expenses. You may not agree with that, but it's not hard to understand why they made that decision. It's also pretty clear why income producing property wouldn't be excepted. If you start making exceptions for homes that are not residences, where does that stop?

Several people have given OP the advice to call the university and explain the situation and see what they say, which is really the only thing to do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I am OP. The post you quoted is also me. I thought it was clear but I should have said. Between my income and the survivor benefits my kids get our family income is around 100K, which is below the median for a family our size in the state where we live.

I have about $400K equity. If I leave that out of the net price calculators they say we would get need based aid at our state schools.

I would hope your child would get aid. Apply around to a bunch of colleges and see. $400K equity in a house is very different than $400K savings with retirement and lots of other stuff. Remember here people call themselves middle class with 2-4 times that income. Just explain the situation that you bought the house married, spouse passed away, went to live with family as they needed a caretaker and kept the house as you will need to move back into it one day when relative passes.

That’s not at all what happened.

Clearly your situation is fairly complex and uncommon. No one here can help you without a lot of detail that you (reasonably) don’t want to provide here. CALL THE SCHOOL.