Reply to What money is fair game for financial aid?

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[quote=Anonymous][quote=Anonymous]One reason home equity is included by many private schools is that it is not fair to renters not to include it. If Family A has $500,000 in a retirement account and Family B has the same amount PLUS $1million in equity in their home they really aren't in the same financial situation. When the kids finish college  and parents finish working, Family A can sell their home.The renter doesn't have this capital for retirement.

Second, in my neighborhood, a divorcing couple--especially one with an only child-- does this: high earner H gives up all rights to the family home, which is usually worth well over $2 million. He may also agree to put other assets in W's name. In exchange, he pays no alimony.

Mother's income is lower than it would be if she received alimony. Kid receives financial aid. When the kid finishes college, mom sells the family home and now has a lot of money to support herself in retirement, usually as much as she would have gotten from alimony. Dad thinks it's better for him to give his wife assets than to agree to pay alimony plus his fair share of college costs.

College financial planning advisers actually were publicly recommending this strategy.

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The problem is that most schools in the top 100 will ask for father's income tax return as well.[/quote]

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