Reply to At what income are you unlikely to get any aid?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Our HHI is $145K, but we have $350K in savings outside of retirement accounts. Three years ago, we were denied any aid at every private college including Yale. The FAFSA said we could pay $59K. Ha. Ha. Ha. We're very close to retirement too. 
Our youngest child is going in-state with merit aid and a bunch of scholarships. We would not allow DC to apply to any private colleges because even with merit, in-state would always be cheaper. 
I really don't get what "qualifies" you for FA, especially at very wealthy colleges (think Northwestern, HYPSM, Haverford, etc.). We're middle class, live in a small house, drive old cars, live frugally. Why should we spend most of our savings to send our DC to a fancy private college? Why do the colleges think this is reasonable? We'd be crazy to do so, especially so near to retirement. It would be irresponsible of us to spend down our rainy-day fund. What if one of us gets laid off? We'd have no savings to fall back on.
Thank God for in-state colleges!!! [/quote]

Are you self employed?  Otherwise, I can't explain Yale.  My kid is in another T10 school which doesn't count home equity, and our EFC from FAFSA was also $59K.   This is about what we are paying, so about $20K FA, no loans.[/quote]

Not self employed, but can't pay $59K. In-state is about $19K with merit and scholarships. Yale gave us nothing three years ago, but we only had one kid in college. Now we'll have two. No mortgage, as we inherited our house, so maybe that's why we got no FA. But that's crazy too. We're supposed to mortgage our house to pay for our kid to go to college right before we retire?

The whole system is broken for middle class people like us. [/quote]

Yes, it was the house— Yales counts equity in home and if you live in a high housing cost area they counted it as a high equity towards your total assets.[/quote]

I thought the $350K saving in non-retirement accounts is more significant than the house.  If you have $350K sitting on your bank account, why would colleges give your child need-based aid?   You should use at least part of the $350K towards tuition first, right?  For a family with $145K HHI, emergency funds should be about $50K (6 months of after-tax HHI)?[/quote]

5% of the $350k is expected to be used towards tuition in calculating EFC. My point was that the OP’s contribution may have been lower at schools that use CSS and don’t count home equity. OP’s income is way below Yale’s threshold for no aid. So yes, the $350k is considered but that is not the only reason they didn’t get aid. OP has to have other assets not accounted for in the post and my guess is home equity which many people on this board and people I know in NYC and CA never consider. That is why Stanford and USC dropped home equity in their financial aid formulas. People in high COL areas with expensive homes tend to have more equity because of the rapid increase in real estate value.[/quote]

But PP said they live in a small house.[/quote]

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