ok, don't crucify me.. question about financial aid.

[Anonymous]

For all of you who are appalled by the middle class needinf FA please do tell exactly who is deserving in your mind? I find it utterly hilarious that you actually believe really poor people are the ones applying for FA. Really poor people are worried about meeting their basic needs, not private school.

Y'all are really delusional about who FA goes to. LMAO

[Anonymous]

Anonymous wrote:OP here.
The home equity thing is frustrating.

Obviously, it's part of our financial picture and at some point in our lives it may turn into cash (not a guarantee but it MAY). So I get that it's considered an asset.

But it's not a secure asset. It's not cash now. It MAY turn into cash some day.

And would anyone in their right mind actually USE home equity (and pay interest on it) to pay for private school? Baring some sort of real extenuating circumstance (kid is floundering and NEEDS to attend private in which case I understand it), it seems like an incredibly foolish thing to do.

Gee - if I had 700 k in home equity I would not be frustrated.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sounds like you are overspending.

No, we're currently saving.
But let's say a tuition bill of $126k a year.

$350K
-$36K (401K)
-105K (taxes we pay between federal and state)
-$48K ($3150 total house payment plus I'm rounding up all house-related expenses to $4K a month--expected repairs/utilities--etc).
-126K tuition.
-$5K health insurance premium.

$2500 a month. Could you raise 3 kids in DC on that? (ALL expenses either than housing. Yes, of course it could be done... It's done by MANY people in DC all the time). But that $2500 would cover ALL food, cleaning supplies, clothing, any school or after school/sports activities for 3 high school kids, college savings, travel, medical copays and costs, gas, life insurance, cell phones, TV, car insurance, etc.
You have to admit it would be tight.

It would be tight because one medical or house emergency and you are toast.

The school sports would be free and really you should drop the travel stuff for kids anyway - school sports should be enough.

Also - with that home equity you are getting zero FA for college. So - I'd save it for college unless you do get significant FA. How smart are your kids?

You have to realize that many of the people with kids at those schools have incomes in excess of 500k at least.

Even without home equity, and even with three kids in college and/or private schools, a family with a HHI of $350K will get zero FA for college.

Not if all 3 are in college at once they will get something

I can tell you from personal experience that they will not.

I can tell you that if you have no assets or savings they will.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here.
The home equity thing is frustrating.

Obviously, it's part of our financial picture and at some point in our lives it may turn into cash (not a guarantee but it MAY). So I get that it's considered an asset.

But it's not a secure asset. It's not cash now. It MAY turn into cash some day.

And would anyone in their right mind actually USE home equity (and pay interest on it) to pay for private school? Baring some sort of real extenuating circumstance (kid is floundering and NEEDS to attend private in which case I understand it), it seems like an incredibly foolish thing to do.

Gee - if I had 700 k in home equity I would not be frustrated.

OP is right, though. It's not cash right now. It's potential future cash, just like if you have a stock that is at an all-time high. Would you take a loan against your stock, knowing that if the stock fell you'd have to give up some other asset (like, say, your house) to pay it back?

We have equity in our house, but that's only because we've lived there for many years. We spent four years owing twice as much on the mortgage as it was "worth." Our neighbors--upper middle income household with HHI of $150K--were foreclosed on during that period because they had taken a second mortgage at the tail end of the last boom. There is no way I'd ever tap home equity to pay for anything other than direct reinvestment into the home.

Now, if you want to sell your home and realize that equity--sure. But most private schools (and colleges) have no expectation that you will sell your home in order to pay when they assess your need for aid, even if there are people who choose to do so. (Schools might, and some do, decide to grant some predetermined allowance for cost of living in an area, and then decide you don't qualify for aid if the reason you can't afford it is that your mortgage payment is double that allowance because you live in a pricey neighborhood. Then you always have the option of selling and downsizing, and in OP's situation with three kids coming up on high school, that might make sense to do. But the problem with having lots of equity due to appreciation is usually that anywhere else you might move to has also gone way up in cost.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here.
The home equity thing is frustrating.

Obviously, it's part of our financial picture and at some point in our lives it may turn into cash (not a guarantee but it MAY). So I get that it's considered an asset.

But it's not a secure asset. It's not cash now. It MAY turn into cash some day.

And would anyone in their right mind actually USE home equity (and pay interest on it) to pay for private school? Baring some sort of real extenuating circumstance (kid is floundering and NEEDS to attend private in which case I understand it), it seems like an incredibly foolish thing to do.

Gee - if I had 700 k in home equity I would not be frustrated.

OP is right, though. It's not cash right now. It's potential future cash, just like if you have a stock that is at an all-time high. Would you take a loan against your stock, knowing that if the stock fell you'd have to give up some other asset (like, say, your house) to pay it back?

We have equity in our house, but that's only because we've lived there for many years. We spent four years owing twice as much on the mortgage as it was "worth." Our neighbors--upper middle income household with HHI of $150K--were foreclosed on during that period because they had taken a second mortgage at the tail end of the last boom. There is no way I'd ever tap home equity to pay for anything other than direct reinvestment into the home.

Now, if you want to sell your home and realize that equity--sure. But most private schools (and colleges) have no expectation that you will sell your home in order to pay when they assess your need for aid, even if there are people who choose to do so. (Schools might, and some do, decide to grant some predetermined allowance for cost of living in an area, and then decide you don't qualify for aid if the reason you can't afford it is that your mortgage payment is double that allowance because you live in a pricey neighborhood. Then you always have the option of selling and downsizing, and in OP's situation with three kids coming up on high school, that might make sense to do. But the problem with having lots of equity due to appreciation is usually that anywhere else you might move to has also gone way up in cost.)

The sensible thing to do is downsize, not to move to someplace equally expensive. When you have an amount of equity in your house that makes sense in the context of your income and area cost-of-living, then it won't affect financial aid. But when you're just sitting on top of a huge pile of cash like OP, yeah, you bloody well should downsize if you want FA.

[Anonymous]

Since you said you were starting in high school - FA normally goes first to established families. Sometimes new families may not get anything their first year.

[Anonymous]

Anonymous wrote:For all of you who are appalled by the middle class needinf FA please do tell exactly who is deserving in your mind? I find it utterly hilarious that you actually believe really poor people are the ones applying for FA. Really poor people are worried about meeting their basic needs, not private school.

Y'all are really delusional about who FA goes to. LMAO

Exactly!!

[Anonymous]

Anonymous wrote:$650k HHI but a large portion goes directly into DH's retirement account and we can't use it. We happily take the 10% we get from one of the Big 3.

Do you understand that parents with a LOT less income and a LOT less in retirement savings (forced savings or not) are paying for that 10%? And doing so without FA or a discount?

Some people with high HHI act like they are the only ones who would like tuition to be lower. And I think it would be if it weren't for people like PP, who aren't willing to sacrifice their lovely lifestyles to pay full tuition.

[Anonymous]

Anonymous wrote:For all of you who are appalled by the middle class needinf FA please do tell exactly who is deserving in your mind?

Please tell us, what HHI constitutes "middle class" in your mind?

[Anonymous]

Anonymous wrote:

Anonymous wrote:For all of you who are appalled by the middle class needinf FA please do tell exactly who is deserving in your mind?

Please tell us, what HHI constitutes "middle class" in your mind?

You shouldn't answer a question, with a question. So please you go first...who exactly do you believe is deserving? What's that magice HHI number that you are comfortable with? I mean who is worthy of your charity? Please do tell.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$650k HHI but a large portion goes directly into DH's retirement account and we can't use it. We happily take the 10% we get from one of the Big 3.

Do you understand that parents with a LOT less income and a LOT less in retirement savings (forced savings or not) are paying for that 10%? And doing so without FA or a discount?

Some people with high HHI act like they are the only ones who would like tuition to be lower. And I think it would be if it weren't for people like PP, who aren't willing to sacrifice their lovely lifestyles to pay full tuition.

This person has posted before, and I strongly suspect that they get the 10% not because of their income--unless they're outright lying about it on the forms and on their taxes--but because they have multiple kids there. The school my younger child currently goes to offers 10% aid to families with two or more kids there, independent of income. It's mostly an incentive to have both kids attend (and an acknowledgment that tuition x2 or x3 is a lot of money). I also suspect that on the backend, a second child from the same family doesn't cost them as much administratively, either (though maybe not 10% less).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For all of you who are appalled by the middle class needinf FA please do tell exactly who is deserving in your mind?

Please tell us, what HHI constitutes "middle class" in your mind?

You shouldn't answer a question, with a question. So please you go first...who exactly do you believe is deserving? What's that magice HHI number that you are comfortable with? I mean who is worthy of your charity? Please do tell.

You're the one who used the vague term "middle class" first, not me. Assuming we want to play the label game and say that folks are either upper, middle, or lower class, I suppose you could divide them into upper class as top 20 percent, upper-middle class as the second quintile, followed by middle class, lower-middle, and lower. But it sounds to me like you think that "middle class" constitutes a much wider range of HHIs than simply the third quintile.

In any event, there's pretty clear-cut data out there about the median HHI of families in the DC area. Which is why citing actual numbers is much more useful than your vague terminology.

[Anonymous]

Anonymous wrote:For all of you who are appalled by the middle class needinf FA please do tell exactly who is deserving in your mind? I find it utterly hilarious that you actually believe really poor people are the ones applying for FA. Really poor people are worried about meeting their basic needs, not private school.

Y'all are really delusional about who FA goes to. LMAO

As someone who is by no means wealthy but pays full freight for two kids, through saving, working hard and doing without, I'm happy to answer this.

"Really poor people" are never going to be recipients of FA at these schools, because there are too many other barriers to them going. But I would be MUCH more excited about my FA "donations" (that I am required to make) if I thought they were going to kids whose families would support them but otherwise truly would not have a chance to be there. Where are the kids of firefighters, police officers, and other first responders? Where are the kids of the new immigrant family whose parents work more than one job to support the family, but want the best for their kids in education?

No, "y'all" are not delusional at all about who FA goes to. Too many times it goes to families like OPs, who are doing nothing to diversify our schools or add help any child who would not otherwise have a perfectly fine if not brand-name education. That is why many of us are resentful of it.

[Anonymous]

Anonymous wrote:As someone who is by no means wealthy but pays full freight for two kids, through saving, working hard and doing without, I'm happy to answer this.

"Really poor people" are never going to be recipients of FA at these schools, because there are too many other barriers to them going. But I would be MUCH more excited about my FA "donations" (that I am required to make) if I thought they were going to kids whose families would support them but otherwise truly would not have a chance to be there. Where are the kids of firefighters, police officers, and other first responders? Where are the kids of the new immigrant family whose parents work more than one job to support the family, but want the best for their kids in education?

No, "y'all" are not delusional at all about who FA goes to. Too many times it goes to families like OPs, who are doing nothing to diversify our schools or add help any child who would not otherwise have a perfectly fine if not brand-name education. That is why many of us are resentful of it.

+1 to your whole post, though the part about required donations confuses me. How are they "required"? Mostly interested in knowing so that I can see the signs if/when our school starts to make donations mandatory.

[Anonymous]

Police officers' kids and firefighters' kids are doing jut fine in public school, thanks. I don't think small class sizes are enough to persuade them to go to school with kids of corporate lawyers and investment bankers.