Reply to What money is fair game for financial aid?

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[quote=Anonymous][quote=Anonymous]I don't understand the reasoning behind using home value. Is the idea that the parents should remortgage the house to pay for school? For many people living in high COL places, house equity is part of their retirement nest egg. I'd love to have enough money to both pay a ridiculously high mortgage payment AND max out my retirement savings, but I can't. I plan to retire to my hometown where I can easily buy a low cost house there with the equity I'll walk away with after I sell my DC house. If I have to remortgage it, then I won't be able to buy a house when I retire. From what I understand, if that money were tied up in a retirement account, it would be untouchable and schools wouldn't consider it as available for college expenses. Is that right?

And what about savings accounts? Aren't we supposed to have three months of living expenses sitting in a savings account? That's a lot of money for people with high mortgages like many of us in DC or for those of us with medical issues. Is the fact that we squirreled those funds away in case of job loss (single mom here) going to be used against us for need-based financial aid?[/quote]

I ran the net price calculators on a number of colleges with and without our home equity. Without home equity we were eligible for lots of FA. With home equity, we were eligible for none. No way are we going to use our home equity to pay for our kids' college costs!! But that's what colleges want us to do.

The cost of college is hugely inflated. Only the very wealthy can pay $80k (this year) for 8 months of college.

Applications to public colleges have soared because of this. At my kid's public college, most of the parents we met are upper middle class--doctors, lawyers, college professors, etc. They, like us, said no way to paying $80K for private college, even though the colleges claim that's what we must pay. [/quote]

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