Are we too wealthy for financial aid for 3 kids?

[Anonymous]

"So, is that my choice -- go back to work, or move to the suburbs? "

Yes, this is your choice and still a pretty good one. You could also consider taking a smaller equity loan only for the first two years of private school to get ahead of the nanny time if you still have a younger child at home. Interests are low and even a $250,000 equity loan would run you less per month than one 30K spot. At the end of two years you could decide whether to go back to work to stay in DC with the private or sell and move to the burbs. The extra 2 years would give the market a chance to recover and you could probably still find a good place close in. Waiting until all three kids are in school would avoid a full time nanny for the youngest one.

DC is not that urban and there is not too much difference between Bethesda and Arlington and NW IMO anyway. The upside is that if you don't go for a mega mansion and stay with a modest house you could possible not only cover the original equity loan but have some saved for college.

I would not tak on the 90K hit just to stay in DC. If you believe in private school, smaller class size, and really want this experience for your kids it would be worth it. If this is your reason you may still want to consider moving to the suburbs for a cheaper house and sticking with private schools.

[Anonymous]

I would be outraged at a school that gave OP any financial aid. DH makes twice what OP's DH makes, however, we don't have tons of equity in our home and have a big mortgage. I struggle constantly with whether it's better for me to SAH and go the public school route or go back to work just to pay tuition because we certainly can't afford to do both. Life is all about choices and priorities.

[Anonymous]

Anonymous wrote:

After all, the decision to be a SAHM is a luxury, in a way...something many families can't afford

I am a SAHM because it would be more expensive for our family if I worked and we hired help......I did not have a high paying job before. And from what I have learned on this board - in this city - nannies need to make almost 50K or more per year. It's cheaper for me to be home.

Hire a SITTER then. Nannies are a luxury as well.

[Anonymous]

Anonymous wrote:Will someone with knowledge please answer my 401K question?

(Also, FWIW, we have a house worth about $1.4M that is nearly paid off. We intentionally maintain a small mortgage for tax purposes, which our accountant said made good financial sense due to our income structure, tax bracket, etc. We are NOT wealthy. We just bought at a good time).

(point being, it's not necessarily remarkable or fishy that a DC area family owns or nearly owns a $1M home outright.)

But it is fishy that the $1 M in equity cannot be tapped for tuition.

[Anonymous]

I'm not an accountant but not having a mortgage is not usually a good tax strategy. Unless you don't itemize for some reason on your taxes, but if you do, then the interest you pay on a mortgage is deductible and usually makes financial sense.

Next, yes definitely the OP has to make choices. There is not a stark choice: hire a nanny and go to work or not work. First as others have siad there are other options. You could at least work part time while the kids are at school. or you could work in the home. You could investigate schools with good after school care programs. A nanny is not a necessity to make working work. There are also student babysitters too.

Second, if you really want private school, has the husband looked at increasing his income at all? no one even thought of that...


But most importantly, your house and mortgage (and lack thereof) and any investments -- including your kids -- are part of the financial aid application! So the $1 million in equity will likely shut down any possibilities

[Anonymous]

Why should OP expect that her financial needs would shut out a family that is genuinely on the cusp of not being able to afford private school?

[Anonymous]

I'm the OP. We inherited the house, didn't pay much for it, and it's worth $1M, mortgage-free. It's our only savings, and DH will not take out equity in it to pay private school tuition.

To the PP whose DH makes 300K: How is it you can't make ends meet and pay private school tuition on that salary? I could definitely do it and stay at home with my kids. I can't do it on 150K for 3 kids. DH wants to go into a field where he'll make less money, so more income from him is unlikely.

Perhaps my ignorance is showing. I guessed endowments for financial aid were given by wealthy donors, not working mothers whose entire salaries go to paying school tuition. So, now I can understand your resentment that someone in a similar situation wants to get financial aid so her kids can attend private schools.

Still, I find it hard to believe that you would work simply to pay private school tuition for your kids. Working is more fun than staying home with kids, but it's not necessarily the best thing for the kids. Perhaps you are rationalizing enjoying your job(s) by saying you work to pay private school tuition. I would not go back to work simply to put my kids in private school because I don't think the benefit they would get from private school would outweigh the benefit they get from having me at home. That said, I'd love to go back to work and get out from under the SAHM lifestyle!

BTW, have any of you looked for part-time jobs recently? I have, and I can tell you they pay a pittance, and no benefits. I never made much money, and my earnings potential is probably less than that of a decent nanny. So, it would cost me money to back to work--lowering our available income and paradoxically making us eligible for financial aid.

It looks like it's public school or the suburbs for me. I won't leave my kids to be cared for by a nanny/sitter/aftercare/whatever.

[Anonymous]

Sorry OP, but are you kidding me???? FA is for those who really need it. Sell your $1M house and move to a more reasonably priced one if private school is that important to you. And yes, you need to go back to work. You should be ashamed for even considering FA.

[Anonymous]

You say,

"DH will not take out equity in it to pay private school tuition"

and

"DH wants to go into a field where he'll make less money, so more income from him is unlikely. "

Therefore, you and DH want someone else to donate funds to the school so that YOUR DC can get financial aid? I echo the pp.

p.s Even if you go back to work and earn whatever (did you go to college by the way?), you will not paradoxically be eligible for FA -- I am just guessing here -- due to the enormous amount of equity in your home. Are you getting the point here?

[Anonymous]

I don't think the OP is getting the pint at all. She made that snappy thing "I won't leave my kids with a nanny/sitter/aftercare/daycare." Yet she does not realize -- she is making a choice. She snubs any other childcare options yet wants a school to subsidize her kids in the school. Good luck with that honey. It isn't even about your $1 million house. Financial aid is for people who NEED it. Who cannot be there otherwise, and have already exhausted any other way to make it work. People who make 1/3 of what your husband makes. And yes, some people who make more than your husband too -- but they don;t get full aid, and they also have mortgages and debts and no other available resources. You have the equity in your house, which you choose not to touch. You have the ability to work, which you choose not to pursue. The financial aid process is formulaic and will impute an income for you. Even a $50,000 income would pay for 1.5 kids.

But most important of all, if your husband makes $150,000 a year, that means he makes over $12,000 per month. Granted you pay taxes (I assume) on that income and have no mortgage to decrease that burden. But what the hell else do you spend your money on then if you have NO mortgage??????? So let's say you pay a third in taxes. That still leaves $8000 a month and no matter what you eat or how high utilities are, I cannot fathom how you would not have at least several thousand per month to pay out in tuition.

The financial aid process considers your monthly obligations, your other investments, even your kids college funds and savings accounts etc, but it asks for what you spend on cars (an dwhat kind they are) and on vacations and on things like that. No school in their right mind is going to hand out money to someone unwilling to tap their equity first. There is one school in the area which wouldn't even give someone who owned a house any financial aid at all (I found that harsh and my child does not go there because of that)!

[Anonymous]

Wow, did she actually imply that it's OK for "poor people" to have to get a job and put their kids in horrid daycare, but not for her and her kids?

And the whole thing about working being more fun than staying home -- I know a lot of working moms who would tell you otherwise. It's called SACRIFICE.

It looks like this is something for you and your husband to solve -- take out a home equity loan, or not. Don't expect the school financial aid committees to solve it for you.

[Anonymous]

Hard to feel sorry for someone who hates staying home with her own children....

[Anonymous]

It is about choices and priorities. I take offense to the comment about sitters/after care. As a single parent I do not have a choice to put my child in these as I do need to work in order for us to eat. Also, private school would be a better option for my DC (has special needs), but we cannot afford it (even with financial aid, and her had has a lot of money that he will not share and will not fill out the FAFSA making us ineligible). I would be pretty upset if a stay at home Mom with a $1M house got to sit around and get a free ride for her three kids - without having to work, or mortgage her future (ie house).

There are lots of families in this town that would be considered middle class that cannot afford to purchase a house, nor send their kids to private schools... though they make choices on what is best for their families AND make sacrifices to make this happen.

[Anonymous]

OP - Work is definitely not more fun. I hate my job, I earn a pittance but I do it so my child can have a better education. I suggest you get a job if you want your children to go to private. Otherwise, stay home and send them to public.

[Anonymous]

The way the cost of childcare is set up, many women do not have the choice of going to work (because salary will not cover child care costs).
I do agree that it makes no sense to work just to send kids to private school. But people work for many reasons.
I agree that 150K per year is not enough for 3 kids at private. Getting into a private with a low income will be hard. From what I hear they only accept a few financial aid kids per year, and this year with the economy affecting their investments, other parents not donating what they used to, it will be that much harder.
At most you will probably hear that you do qualify, but they do not have the funds.
There is a scramble for full tuition paying kids. These are the kids that apply to several schools. So the applicant pool is smaller than what many people like to believe.