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[quote=Anonymous][quote=Anonymous][quote=Anonymous]You "came into money."  You have inherited wealth.  How can you possibly call yourself a "prudent saver"?[/quote]

That was poor word choice.  DH receved some stock options when his employer took the company public.  So not inherited wealth, but it was a one time thing..  Thank you to those who have provided helpful info.  Yes we are lucky to have enough saved to pay for college; [b]I was just curious what happens with people who have assets tied up in things like luxury homes and cars and no college savings.   Are they expected to liquidate those assets? [/b] If not it seems unfair to those of us who saved money instead .[/quote]

In really over-simplified terms, under the federal and other FA methods, you add up your "available" income (basically any income over some really low basic needs threshold like $30K) and your liquid assets plus college savings, but excluding retirement accounts. All of this is considered "available" to pay tuition. Then you subtract the DC's tuition for next year (you do this calculation all four years). The difference, if any, is your "need." Colleges may fill this "need" with a package of grants, loans, and work study.

So yes, assuming your income isn't already too high to get FA (those of us in the $200-300K range), and there's at least  some possibility you could get FA, then putting your money in stocks or CDs could hurt your chances for FA relative to putting the same money in fancy cars. For FA purposes, your bank balances and brokerage holdings that are not in a retirement account would be considered to be available for tuition and you'd be expected to liquidate them. The FA methodology doesn't ask about your housing equity or your Mercedes collection.

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