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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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.[/quote]

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. [b]She inherited a home worth much less than that. [/b]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.[/quote]

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.[/quote]

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

financial aid is a limited resource and should be distributed based on need. [b]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.[/b][/quote]

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.[/quote]

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.[/quote]

So, what should she do, pray tell? She shouldn't sell her home, because that would be idiotic, as you say. But if she can't reasonably be expected to sell her home, if the equity of the home is not a liquid asset available for college, then why isn't her kid just as needy as any other kid from a family of 6 with a HHI of $100k?[/quote]

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