Reply to "Typical Assets" as considered by University Financial Aid departments

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I see no difference btw 2mm in wealth in your vanguard retirement account and 2mm in your home and 2mm in lottery winnings in non-retirement (you can’t put it in retirement beyond 7k a year).

We’re all saving money for the same thing - our future.

I don’t know why colleges care.  Instead of taking 5% of non retirement and maybe home equity blah blah, they should take a flat 2% of everything.  You can borrow against any asset. [/quote]

Because as a matter of public policy, requiring parents to use retirement assets is A Very Bad Idea.  We *want* people to (i) save for retirement, and (ii) have sufficient funds to live on in retirement.  If someone is has two kids, and knows that a significant portion of any retirement assets they save are going to be diverted to pay for college, that disincentivizes retirement savings.  Then, we have a retirement crisis, in addition to higher education costs further spiraling.

I'm with you on the homes, though.  [/quote]

Yes, well what if our home is our main retirement asset? How is that fair?[/quote]

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