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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

Um, what?

Umm, like OP is making very little money, probably because she SAHMed. Her kids went to great schools and she lived close to the city. So she lived very well, better than many people making more money (i.e. actually creating value for society) who live in shitshacks far away in crappy school districts. Not sure what is it that you are not getting.

Bah ha ha ha ha ha ha ha hah! You think that you deserve more FA because you chose to live in the middle of nowhere so you could also have a huge freaking house while you enjoy your fabu "value-creating" job in some cubicle 30 miles away?

You chose to buy a shitshack in Manassas. Deal with it.

no, actually, i don't live in DC (i did before) and my kids will go to college in europe. so, it's not personal for me. nevertheless i see how it is unjust. aid should be based on wealth not income. whether that wealth is in the form of real estate or cash in a bank is irrelevant.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

Um, what?

Umm, like OP is making very little money, probably because she SAHMed. Her kids went to great schools and she lived close to the city. So she lived very well, better than many people making more money (i.e. actually creating value for society) who live in shitshacks far away in crappy school districts. Not sure what is it that you are not getting.

Wow. You sound like a real charmer. What's the matter, you don't like it when the poors try to rise above their station?

People who make more money create more value for society? You mean like Bernie Madoff?

Here's a scenario, since we have clearly just talking out our asses now. Maybe OP is a social worker and her DH is a teacher. Or us that not the kind of value that interests you?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

You talk like FA is a public good. It is not. Colleges give out aid any way they see fit. You may think it should be distributed based on your own definition of need, but you don't make the decisions, or even get any say. It is not your money, it belongs to the college. Nothing governs their distribution of aid beyond their own internal guidelines.

Reasonable people can disagree about how to define need. You think it should be based more on wealth than income, but that has it's own potentially "ridiculous" outcomes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

You talk like FA is a public good. It is not. Colleges give out aid any way they see fit. You may think it should be distributed based on your own definition of need, but you don't make the decisions, or even get any say. It is not your money, it belongs to the college. Nothing governs their distribution of aid beyond their own internal guidelines.

Reasonable people can disagree about how to define need. You think it should be based more on wealth than income, but that has it's own potentially "ridiculous" outcomes.

It's amazing that there is so much outrage about this rare instance of a lower income family somehow getting an edge, when the vast majority of the time, it is high income families who get the advantage. The vast majority of colleges are not need blind, they are "need aware." That's a pretty way of saying that students who need less or no aid are more likely to be admitted. And the vast majority of college do not meet full need, so students needing financial aid typically get much less than they need. It's only an advantage to have a low expected family contribution if you have the credentials to be admitted into the handful of schools that are need blind and pledge to meet full need.

http://en.m.wikipedia.org/wiki/Need-blind_admission#U.S._institutions_that_are_need-blind_for_U.S._applicants_and_meet_full_demonstrated_need

So cheer up. Maybe OP's DD won't get into these schools. Will that make you feel better?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

You talk like FA is a public good. It is not. Colleges give out aid any way they see fit. You may think it should be distributed based on your own definition of need, but you don't make the decisions, or even get any say. It is not your money, it belongs to the college. Nothing governs their distribution of aid beyond their own internal guidelines.

Reasonable people can disagree about how to define need. You think it should be based more on wealth than income, but that has it's own potentially "ridiculous" outcomes.

thanks dr obvious. of course colleges can do as they see fit, they can spend it on a ten ton statue made of diamonds. that goes without saying, really. we are discussing their policies. it is my view that, insofar as they are as described in some of the previous posts (i.e. that is income rather than wealth that is overwhelming factor) they are unjust.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

You talk like FA is a public good. It is not. Colleges give out aid any way they see fit. You may think it should be distributed based on your own definition of need, but you don't make the decisions, or even get any say. It is not your money, it belongs to the college. Nothing governs their distribution of aid beyond their own internal guidelines.

Reasonable people can disagree about how to define need. You think it should be based more on wealth than income, but that has it's own potentially "ridiculous" outcomes.

Education is a public good. FA is a means to an education.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

You talk like FA is a public good. It is not. Colleges give out aid any way they see fit. You may think it should be distributed based on your own definition of need, but you don't make the decisions, or even get any say. It is not your money, it belongs to the college. Nothing governs their distribution of aid beyond their own internal guidelines.

Reasonable people can disagree about how to define need. You think it should be based more on wealth than income, but that has it's own potentially "ridiculous" outcomes.

Education is a public good. FA is a means to an education.

If you believe that higher education is a public good, I've got a bridge to sell you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

You talk like FA is a public good. It is not. Colleges give out aid any way they see fit. You may think it should be distributed based on your own definition of need, but you don't make the decisions, or even get any say. It is not your money, it belongs to the college. Nothing governs their distribution of aid beyond their own internal guidelines.

Reasonable people can disagree about how to define need. You think it should be based more on wealth than income, but that has it's own potentially "ridiculous" outcomes.

thanks dr obvious. of course colleges can do as they see fit, they can spend it on a ten ton statue made of diamonds. that goes without saying, really. we are discussing their policies. it is my view that, insofar as they are as described in some of the previous posts (i.e. that is income rather than wealth that is overwhelming factor) they are unjust.

Again, I will just ask you to consider how "justice" is typically meted out to lower income students versus higher income ones and whether in the scheme of things this policy really tips the scales unfairly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's hilarious that people here are telling the OP she doesn't deserve financial aid. I think most of the NESCAC schools will disagree. Clearly few people here understand how financial aid works.

No matter what form the school uses, financial aid is based predominantly on family income and savings/investments that are in the **student's** name. Parent savings, investments, and real estate count much, much less.

OP, have you run the net price calculator on the websites of the schools your DD is interested in? I pulled up Middlebury's and plugged in some dummy numbers based on the info you provided: a HHI of $104k, a home value of $950k, mortgage of $0, and 4 children, with $10k in savings. Middlebury's net price calculator spit out the following:

Total cost in first year: $61,360

Expected family contribution: $11,358

Total financial need: $50,002

Estimated financial aid package: $50,002
-Middlebury scholarship: $45,202
-Student loan: $3,000
-Campus job: $1,800

OP, please run the net price calculators yourself. Likely your DD will qualify for significant financial aid at schools that pledge to meet full need. No college really expects you to sell the family home in order to pay for college.

This just blows me away. I did it, and granted we have a good income (250K per year), but I was curious. And they are saying that our expected famiy contribution is $59K per year. How on earth do they figure that?! (FWIW we do have a well funded 529 account, I'm just making this observation -- private college is impossible for many people who have decent incomes.)

Here is how you do it:

1. Figure out how you would live if you made $191K.
2. Live like that.
3. Use the rest of the money to pay for college.

It's fine if you don't want to live like you would have to live if you made $191K ( although I can assure you, that wouldn't be living in a box). That just means that private college is less important to you than is living like someone who makes $250K.

If you are wealthy, every single one of these schools will expect you to either use savings or reduce your lifestyle. Do you really think that's unfair?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

Remember though that is not just the primary residence that receives some special treatment under the financial aid formulas. Retirement accounts--which are generally the province of families with incomes in the upper middle class and upper ranges--aren't counted at all towards financial aid. This certainly could be perceived as unfair. If you believe that OP should sell her house and use the equity to pay for college, shouldn't those of us with retirement savings also be required to cash those out for college?

And if you believe that OP should sell her house and use the equity to pay for college, why don't you believe that ALL of us should do this? Couldn't you free up a lot of cash for college if you sold your home? Why aren't you planning to do so?

And if your issue is that this family shouldn't be living in such a valuable home given their income level, that they should have sold the house, bought something more "in line" with their standard of living, and banked the cash for college, well, why do you get to make that determination? I mean, maybe if I closely examined your family's finances, I might argue that you have too much of *your* wealth tied up in real estate as well, that instead of buying a house worth $x, you should have sucked it up and bought a smaller home in a less desirable area and put the savings in college accounts. But if I said that to you, you'd tell me that to piss off. And you'd be right.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's hilarious that people here are telling the OP she doesn't deserve financial aid. I think most of the NESCAC schools will disagree. Clearly few people here understand how financial aid works.

No matter what form the school uses, financial aid is based predominantly on family income and savings/investments that are in the **student's** name. Parent savings, investments, and real estate count much, much less.

OP, have you run the net price calculator on the websites of the schools your DD is interested in? I pulled up Middlebury's and plugged in some dummy numbers based on the info you provided: a HHI of $104k, a home value of $950k, mortgage of $0, and 4 children, with $10k in savings. Middlebury's net price calculator spit out the following:

Total cost in first year: $61,360

Expected family contribution: $11,358

Total financial need: $50,002

Estimated financial aid package: $50,002
-Middlebury scholarship: $45,202
-Student loan: $3,000
-Campus job: $1,800

OP, please run the net price calculators yourself. Likely your DD will qualify for significant financial aid at schools that pledge to meet full need. No college really expects you to sell the family home in order to pay for college.

This just blows me away. I did it, and granted we have a good income (250K per year), but I was curious. And they are saying that our expected famiy contribution is $59K per year. How on earth do they figure that?! (FWIW we do have a well funded 529 account, I'm just making this observation -- private college is impossible for many people who have decent incomes.)

Here is how you do it:

1. Figure out how you would live if you made $191K.
2. Live like that.
3. Use the rest of the money to pay for college.

It's fine if you don't want to live like you would have to live if you made $191K ( although I can assure you, that wouldn't be living in a box). That just means that private college is less important to you than is living like someone who makes $250K.

If you are wealthy, every single one of these schools will expect you to either use savings or reduce your lifestyle. Do you really think that's unfair?

Well, it's not quite that easy, since you have to earn much more than $59k to pay $59k in tuition. Likely, she would have to live more like she would if she made ~$150k. Still, I agree with your point.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This looks like a loop hole. Completely ridiculous that if someone inherits a million dollars vs a million dollar house they would get aid. The system is broken.

Again, this attitude demonstrates both a lack of knowledge about how FA works and a fair bit of hypocrisy. Do you own a house? Are you selling it to pay for college?

Also, the OP did not inherit a $1m home. She inherited a home worth much less than that. If it were in southern CA, it might be worth less now than it was when she inherited it. Assuming you own a home in the DC area, the same housing market that has pushed the value of her home so high gas also benefitted you.

possibly. but if the home is worth 1M now it means that it is larger, closer in/shorter commute with better schools than most homes where the rest of us live. OP and her family have had it better than vast majority of others, including many who earn more (and arguably, deserve it more). it seems unfair that she should get so much aid.

So what you are saying is you are resentful because someone with a lower income hasn't suffered enough?

financial aid is a limited resource and should be distributed based on need. it is ridiculous to argue that those who have all their (substantial) wealth tied in real estate are somehow more needy than others who have less wealth.

Remember though that is not just the primary residence that receives some special treatment under the financial aid formulas. Retirement accounts--which are generally the province of families with incomes in the upper middle class and upper ranges--aren't counted at all towards financial aid. This certainly could be perceived as unfair. If you believe that OP should sell her house and use the equity to pay for college, shouldn't those of us with retirement savings also be required to cash those out for college?

And if you believe that OP should sell her house and use the equity to pay for college, why don't you believe that ALL of us should do this? Couldn't you free up a lot of cash for college if you sold your home? Why aren't you planning to do so?

And if your issue is that this family shouldn't be living in such a valuable home given their income level, that they should have sold the house, bought something more "in line" with their standard of living, and banked the cash for college, well, why do you get to make that determination? I mean, maybe if I closely examined your family's finances, I might argue that you have too much of *your* wealth tied up in real estate as well, that instead of buying a house worth $x, you should have sucked it up and bought a smaller home in a less desirable area and put the savings in college accounts. But if I said that to you, you'd tell me that to piss off. And you'd be right.

i don't think OP should sell the house to pay for college. i think that would be pretty idiotic. that said, i don't think she should get financial aid either.

[Anonymous]

OP,
Get a job with college remuneration. In the DC area, Georgetown and Hopkins offer this benefit. Half of tuition. Pretty nice.