Reply to Inheritance and College Financial Aid

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]My mother passed away two years ago and left me a Designated Beneficiary Account worth about $500K. This is not a marital asset but is intended to partially fund DH’s and my retirement. Our HHI is $225K and our retirement savings are behind schedule due to graduate school loans, periods of unemployment, medical expenses, etc. We’re both 56.

We’ve saved enough in a brokerage account for an instate public college education for senior DD - $130K. I was reluctant to open a 529 years ago because we’re hoping DD will get a talent scholarship (this may happen) and she’s an only child. Of course, we’re not counting on a scholarship but wanted flexibility to use the funds for retirement or help her with a house downpayment someday if we can.

Now that we’re about to fill out financial aid forms, and considering a few OOS options, I’m wondering if we should do something smarter with this designated beneficiary account and brokerage account that will afford flexibility and minimize the negative impact this will have on college financial aid.

Should we open a 529 now? Would that make a difference in financial aid calculations? Or should we wait to find out where DD lands since we’ve waited this long to preserve flexibility?[/quote]

This is precisely why we have so much wealth disparity in this country. This couples daughter I don't care how smart she is, she shouldn't get a "talent" scholarship because her parents clearly have enough saved.[/quote]

WTH?!?!?!  So my kid should not get a merit award (total Merit, based on their skills and what they bring as an applicant) because we have money?    Not how it works

We had enough saved for college (and then some on our own) we didn't fill out fafsa or any CSS.  Both kids got good merit.  One got $42K/year at a school that cost $85 their freshman year (merit continues for all 4 years).  The other got $18K at a school that cost $55-60K.

Just because you choose not to save doesn't mean other kids have to be penalized for merit awards.

Stick to your financial aid package and consider all your in-state schools and CC if needed to afford school.  Nobody is entitled to an "elite education" for free.

[/quote]
You are greedy.[/quote]

Like it or not, many colleges reward assets over need. That’s not greed, it’s reality. The trick is to match the colleges with the commodity. Some schools offer merit and some meet 100% need. Pick the one that fits your situation. It’s odd to blame someone for targeting the right schools for them and taking the best offer.[/quote]

I don’t understand why it’s greedy to accept huge scholarships that cover most of college costs if the kid worked hard to get it. Some colleges want to
Pony up and offer these to entice bright kids. Those who don’t, they can go after full pay kids. What’s wrong with that?[/quote]

it's not.  The PP I suspect is a troll.  Or simply didn't save for college and/or kids don't qualify for merit.

Hint: there is merit out there for most kids.  My 1250/3.5UW/No AP kid got 35% of tuition yearly at two T80 schools, and 65% of tuition at a T130.  Had we needed more, they would have applied to more schools in the 100-200 range and found it (Most likely). 
My 3.98UW/1500/8AP (all stem) kid got merit at almost all schools in the 30-80 range, it was only those in the T30 they didn't/didn't get into either.  One T50 offered them $42K/year merit, so ~50-55% of Total Costs.  My kid did not take it (it was their 2nd choice in April of schools they got admitted to).  Most kids would have, even if parents could fully pay.  Had we needed merit (once again) they would have taken it or would have applied to more in the 75-120 and gotten almost full scholarships.  
Both kids worked hard to be their best academically (for them).  If colleges want to reward that, good for them. Outside of T30-50 schools, great merit exists.  Smart people chase merit, if they cannot easily afford to be full pay.

Kids should not be penalized because they are smart and their parents have saved for college.  That's the entire point of merit.  It's not financially based.

There is an affordable college path for most kids.

1) Dual entry in HS for virtually free, then 2-3 years at a 4 year state school.  Kid goes somewhere that gives them some merit (Trust me: VCU or GMU will give your good student some merit, great students will get a bit more). Kid will take $5K in Loans each year, kid will earn $10-12K/year to help pay and with only 2-3 years to pay for they can come out with only $10-15K in loans, parents might need to help with $5-7K/year at most.

2) Same as above but do CC while living at home for 2 years.  This can be funded by the student working summers (more than enough and save $$ for the years at 4 year).  Then transfer to 4 year in-state.  Similar results---$10-15K in loans, kid contributes $10-12K/year and parents contribute maybe $5K/year for 2 years ($10K)

3) Student does well in HS, applies to get merit at "lower tiered Privates" or goes to 2nd tiered State schools that give them merit.  If possible live at home, if not it's still manageable for many.  Once again kid needs to earn $10-15K/year (not hard with DCUM min wages---I used to earn $5K /year when min wages were $4)

4) Kid finds a 4 year that gives them enough merit to afford the school.  go 2 tiers below your "reach" schools and you can likely find this.

Merit is out there.  It's up to you if you want to use it.

As for the PP: nothing in life is guaranteed.  If you want it, work hard for it.  That is how life works.

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