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

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[quote=Anonymous][quote=Anonymous]This is just nauseating as it encourages people not to save. As pp said above, if the inheritance was given in stock and had increased to $1m it would be expected to pay for college. [/quote]

This is ridiculous. Do you own a home? I might ask you why you why you haven't sold it and used the proceeds to pay for college, which is what you are saying OP should do.

And if OP had inherited cash or stock instead of a home, it would have been perfectly reasonable for her to have used that money to....buy a home. In which case, she would be exactly where she is now--with most of her assets in a primary residence, the value of which counts towards the expected family contribution, up to a cap based on HHI.

Do you know ANYONE who has forgone purchasing a home to live in in favor of saving money for college? I'm guessing you don't. Why are you expecting this of OP?

Furthermore, you need to realize that financial aid is based primarily on income. The "penalty" for saving is actually very small, as discussed in the link below. And retirement savings aren't counted at all. (My guess is that the OP has very little in retirement savings, so if it makes you feel better, you can think of her house as her IRA.)

http://www.thecollegesolution.com/why-college-savings-usually-wont-hurt-financial-aid-chances/
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