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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]23:22 Your points are not persuasive. If they'd invested in private schools, then their net worth would not be over $1 million and yes they should be eligible for FA. Of course OP should not have turned down the house.

People's reactions are strong here because of perceived inequities and a distorted sense of entitlement. As for loopholes, what examples can you give on this magnitude?

Questions from folks with [b]high HHI[/b] and large mortgages and graduate school loans who expect FA at private school get a strong reaction over on the private school forum. This is not new..[/quote]

Not PP, but this family does not have a high HHI, so the comparison is not very apt.

And as for loopholes, hasn't PP given the example of retirement accounts over and over again? If OP had a million in a retirement account, [b]none of it would be counted towards financial aid,[/b] and the expected family contribution would be even lower (since a portion of the home equity *does* count).[/quote]

I don't think that's accurate. [b]I believe a graded percentage of retirement accounts are shielded, with the percentage being larger the closer the parents are to retirement age.[/b]

I'd be in favor of doing the same for real estate. Everyone needs a place to live. No one needs a $1m house. [/quote]

This is not correct. A graded percentage of [b]non-retirement account assets[/b] are shielded, with the percentage being larger the closer the parents are to retirement age. Money in retirement accounts (401k, 403b, Roth, IRA, TSP, etc) is excluded entirely. The only portion of retirement monies that are counted is [i]the amount you contributed in the last year[/i]. So, IOW, you cannot decide this year to put $250k into your retirement accounts in order to shield it from next year's financial aid calculation. However, if you already had $250k in retirement accounts prior to the last year, NONE of it counts towards financial aid.

As this link notes: "[i]Believe it or not, you can have a million dollars socked away in your retirement accounts and it won’t affect your child’s eligibility for college aid."[/i]

http://www.forbes.com/sites/troyonink/2013/01/09/save-for-retirement-now-get-more-college-aid-later/[/quote]

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