FA Question: Inherited house, now worth $1M, now what?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is stunning. Your net worth is over $1 million, and you want financial aid. What are you doing with your earnings? Just because you could not afford to buy this home does not mean you deserve FA. The sense of entitlement ...

. This

Sorry. +1

[Anonymous]

Anonymous wrote:You could sell the million dollar house, move into a 200k apartment, and use the 800k profit for college expenses.

What a freaking brilliant idea!! Stuff our four kids and two dogs into a what, 1 bedroom apartment? And then my younger kids can go to some crappy schools! Great idea!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The same thing happens on College Confidential all the time. Some person innocently posts about his/her financial situation, asks how that will affect their ability to qualify for aid, and is called out by scores of subsequent posters for being greedy. So tiresome - if you don't have information for her about how home equity is factored into colleges' need-based aid determinations, could you just move on and skip the comments about greediness.

More than ever, college financial aid is a game. Colleges want to use their aid dollars to improve the profile of their class and generate the greatest return they can - it's way better for them to give $25K to 2 kids, both of whom will then pay $25K in tuition than it is to give a full $50k ride to one kid who won't pay anything.

It's also a game for parents. What school will look at my financial situation/child's qualifications most favorably and give me the greatest amount of $. It is not selfish or in any way inappropriate for the poster to ask. My advice to her would be to find schools that don't take home equity into account when tabulating your assets. Most do, but many do not.

You sound like you know what you're talking about. As a follow up, how do you recommend the OP determine which schools do take home equity into account and which don't? Do colleges consider whether both parents work? Thanks.

If you are really interested, this is a great resource about how different schools consider home equity:
http://www.thecollegesolution.com/will-your-home-equity-hurt-financial-aid-chances/

As noted above, none of the FAFSA schools take it into account. But about 260 schools, usually private and including the most selective schools, do consider it. For substantive discussions about anything related to colleges, I would refer people to College Confidential's Parents forum and Financial Aid forum.

Thanks for posting this, PP. I'm the OP. I appreciate you taking the time to post something useful. I'm so sick of the haters on DCUM! I know most are trolls, and I'm feeding them by writing this, but I think one should be able to ask a reasonable question and get a reasonable response, not a bunch of accusatory nonsense from completely ignorant posters. Well, enjoy your lunch, Trollies.

[Anonymous]

Anonymous wrote:PP here with the similar situation. We decided that a state school at full pay was the answer for us. Just couldn't find the perfect fit otherwise with more expensive FAFSA only schools and merit options. FAFSA only schools also only provide a fraction of the calculated need. In our case it really didn't work out to much different than full pay at a state school, and you don't have to worry about next year's award. We spent a good bit of time figuring that out so I hope it helps. Yes, we have more kids in the pipeline, but so far so good. Like I said before there are many different choices at many different prices. One could be sending the kid to the NESCAC school if they will loan her the $60k/yr. We decided that wouldn't work for us and went another route, which has turned out just fine. Good luck to you and your daughter!

Thanks for posting, PP. DD will have to apply for merit scholarships to our state university. She's going to be very disappointed when I tell her this, but that's the way it's going to be because no way on earth are we going to sell our house.

OTOH, if we had $1M in a retirement fund, like a 401(k), don't most schools disregard that? I guess as a pp said, our house is our retirement fund. I'd imagine lots of people who receive FA also have 401(k)'s that shield their retirement money from colleges?

[Anonymous]

Anonymous wrote:

Anonymous wrote:PP here with the similar situation. We decided that a state school at full pay was the answer for us. Just couldn't find the perfect fit otherwise with more expensive FAFSA only schools and merit options. FAFSA only schools also only provide a fraction of the calculated need. In our case it really didn't work out to much different than full pay at a state school, and you don't have to worry about next year's award. We spent a good bit of time figuring that out so I hope it helps. Yes, we have more kids in the pipeline, but so far so good. Like I said before there are many different choices at many different prices. One could be sending the kid to the NESCAC school if they will loan her the $60k/yr. We decided that wouldn't work for us and went another route, which has turned out just fine. Good luck to you and your daughter!

Thanks for posting, PP. DD will have to apply for merit scholarships to our state university. She's going to be very disappointed when I tell her this, but that's the way it's going to be because no way on earth are we going to sell our house.

OTOH, if we had $1M in a retirement fund, like a 401(k), don't most schools disregard that? I guess as a pp said, our house is our retirement fund. I'd imagine lots of people who receive FA also have 401(k)'s that shield their retirement money from colleges?

But the point is that most people with your income don't have a million dollars in a retirement fund and they don't live in a million dollar house in a good school district. They do, however, get FA for college. Each family has some advantage, but none of you can have it all. That is how it works.

[Anonymous]

You seem so entitled OP. You can't have your cake and eat it too. I live in a tiny house so that I could pay for my kid to go to college. You can too. No one deserves to be in a $1M house and get FA. Sell the house and rent if you have to.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You could sell the million dollar house, move into a 200k apartment, and use the 800k profit for college expenses.

What a freaking brilliant idea!! Stuff our four kids and two dogs into a what, 1 bedroom apartment? And then my younger kids can go to some crappy schools! Great idea!!

Honey, what would you have done if you hadn't inherited that house? If you had to live like someone who makes your actual income? My HHI is a bit less than yours and we get along okay.

If you live like that, you'll have enough to pay for your daughter's private education. If you're not willing to do that then it isn't your priority, and that is okay. But I'm afraid you can't have your cake and still claim to be cake-less.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You could sell the million dollar house, move into a 200k apartment, and use the 800k profit for college expenses.

What a freaking brilliant idea!! Stuff our four kids and two dogs into a what, 1 bedroom apartment? And then my younger kids can go to some crappy schools! Great idea!!

Honey, what would you have done if you hadn't inherited that house? If you had to live like someone who makes your actual income? My HHI is a bit less than yours and we get along okay.

If you live like that, you'll have enough to pay for your daughter's private education. If you're not willing to do that then it isn't your priority, and that is okay. But I'm afraid you can't have your cake and still claim to be cake-less.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:You could sell the million dollar house, move into a 200k apartment, and use the 800k profit for college expenses.

What a freaking brilliant idea!! Stuff our four kids and two dogs into a what, 1 bedroom apartment? And then my younger kids can go to some crappy schools! Great idea!!

You're an idiot OP hopefully your stupidity doesn't lose the house

[Anonymous]

Anonymous wrote:This is stunning. Your net worth is over $1 million, and you want financial aid. What are you doing with your earnings? Just because you could not afford to buy this home does not mean you deserve FA. The sense of entitlement ...

This. Because frankly, The FA office does not believe you won't sell this house and take the cash right after your children graduate! They are not stupid.

[Anonymous]

If your dd wants a small LAC and has the grades and scores to be a candidate for a top 20 school, she should look at schools further down in the rankings that offer merit aid. Oberlin, Kenyon, Wooster, Lawrence, Kalamazoo, Beloit, Macalester, Dickinson, Rhodes, Allegheny, etc. Also are you in Maryland or Virginia? Don't forget to check out St Mary's in MD and Mary Washington in VA for smaller in state options.

[Anonymous]

"Anonymous wrote:This is stunning. Your net worth is over $1 million, and you want financial aid. What are you doing with your earnings? Just because you could not afford to buy this home does not mean you deserve FA. The sense of entitlement ...


Yes, I do want financial aid. I didn't earn $1M. My house increased in value, but that has nothing to do with me. I have saved what I've been able to save on my income. I think FA should take into consideration an individual's situation. I have been living on a fairly low income for a long time. I lucked into the house, but it's where my family lives. Would you sell your only home just to finance your child's education? I don't think that's reasonable. If I'd inherited stocks that increased in value, well, that's different, because I could sell them without jeopardizing my family. But our house? We're not making any income off of it. We live in it.

I'm not going to convince you. I just want to find out if anyone in a similar situation has dealt with this.

On an income of $104K (pre-tax) do you honestly think we could come up with anything close to $60K for college tuition?

That's insane. "

Truthfully you will not qualify for much, if any, financial aid. Your best bet is to set realistic expectations for your student. Living in the DC area is expensive and the HHI reflects that. Colleges do not.

If you offer an $$$$ college as an option for your student, you should be prepared for how to pay for whether student loans, home equity loans or lottery winnings.

[Anonymous]

So, what is she supposed to do? My parents paid less for my house than most DCUMers may pay for their car. It has appreciated in value significantly, more than tenfold. I could never afford this house. I thank god they left me a place to live. I really don't know where I'd be without this inheritance.

So, do I just plan on a gap year for my children? Something useful, an internship, that will make them more appealing to an expensive college/university? Will I have to take a job at a university so that my children may attend without paying tuition? Is a HYP selection the only answer? Is it two years of community college, a life enhancing internship, and self-study, before transitioning to a quality four-year institution with aid?

I mean, OP asked the question. So, are there any answers out there?

[Anonymous]

We're in the same boat, although our kids are not college age yet. We're saving what we can and the kids will split a GI bill, but we're not counting on FA because of the house.

Good luck, OP.

[Anonymous]

Yup. Be grateful that you have this immense asset, not angry that you can't have them AND the fancy education too. If you decide you'd rather have the fancy education then you can make that happen. But the only people who really can have it all are the people who can genuinely afford it all. We mere mortals have to make hard choices.