Anonymous wrote:It's my understanding that each college calculates a family's assets differently, which can result in very different financial aid packages. This is particularly true for home equity.

I work for the government and have a middle-class income. But the house that I bought in 2014 has more than doubled in value, making it a seemingly big asset on paper. It's far from the worst problem to have. Still, for a school like Vassar, it means we'd get almost no financial aid. On the other hand, Skidmore does not seem factor in home equity in the same manner, and thus provides more than twice as much financial aid despite having a much smaller endowment than Vassar. These are just two examples, but I've gotten very different financial aid estimates from peer schools.

Anyhow, most people can get a pretty good sense of potential financial aid by taking out their tax returns and using a school's Net Price Calculator. I've found that many school's financial aid officers are very willing to have a call or Zoom to discuss things in greater depth.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figured for most schools it was about 200-250k. One school publishes that (maybe Princeton) and when I did a lot of NPCs, that number seemed to be the line. Then it ramps up after that.

It's all pretty classist, imo. A two income family making 200k gets a lot of aid per marketing materials at these schools. And if you have a million dollar home? Fine! But if you have 400k in an account because grandma died? Not okay. You could drive an uber, have zero retirement, zero assets, and win a 1million dollar lottery and have to pay Princeton full fare. But if you had a million dollar house and 3 million in retirement, you'd get aid.

This might me the dumbest post I've ever read on this topic, and there's some pretty stiff competition.

In the first scenario, yes, if you inherit money it is considered an asset, and you will be expected to use it for college. Why on earth wouldn't you be?

And in the second scenario, yes, you are expected to use your lottery winnings (!!) to pay for college. Good lord.

I call bullshit. If I'm feeling irritated that my full freight tuition payments are essentially paying for not only my kid to attend college, but also paying for 2 - 3 of their cohort, I have a right to question why the overall cost of college has become sky high. And that's after reckoning with the fact that the income and assets being used against me in the tuition calculation process were already used against my kid in the admissions process.

If you took the total cost to run a top private school and distributed that over the entire student body, the average annual cost to each family would be no more than $20 - $30K (and not $90K+) ...

I know. Boo hoo. "Great problem" to have. Whatever.

Anonymous wrote:

Anonymous wrote:Per Columbia’s website:

“When determining the parent contribution, we take into consideration the parents’ assets which include cash, savings, checking, investments, home equity, other real estate (other than home) equity, and business equity. We do not include retirement assets (i.e., 401K, 403b, IRA, Keogh) in our analysis.

For families with an income of $100,000, we would consider typical assets to be approximately $250,000.”

So if you bought your house awhile ago, you’re potentially in trouble just with the equity, depending on how they calculate it.

I believe Princeton’s “typical asset” threshold is a lot lower than Columbia. I think around $125k or $150k.

Anonymous wrote:Per Columbia’s website:

“When determining the parent contribution, we take into consideration the parents’ assets which include cash, savings, checking, investments, home equity, other real estate (other than home) equity, and business equity. We do not include retirement assets (i.e., 401K, 403b, IRA, Keogh) in our analysis.

For families with an income of $100,000, we would consider typical assets to be approximately $250,000.”

So if you bought your house awhile ago, you’re potentially in trouble just with the equity, depending on how they calculate it.

Anonymous wrote:What do you consider middle class? How much did you pay for your house? Middle class is not $150K for one parent a year.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

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.

Yes, well what if our home is our main retirement asset? How is that fair?

Well, a home isn't a "retirement asset" - it's an asset that you plan to use for retirement. A retirement asset is one that is given preferential tax treatment by the IRC.

And that's really the crux of it. [b]Colleges don't want to be in the business of determining what constitutes a "retirement asset" for every family (and not only because every family will argue that every asset is meant for retirement, so none should count). Tey have to have a bright line rule, so they use retirement accounts. That seems pretty reasonable to me.

But apart from what I think, home value isn't considered in FAFSA, and only minimally in the CSS.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

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.

Yes, well what if our home is our main retirement asset? How is that fair?

Anonymous wrote:

Anonymous wrote: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.

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.

Anonymous wrote: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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figured for most schools it was about 200-250k. One school publishes that (maybe Princeton) and when I did a lot of NPCs, that number seemed to be the line. Then it ramps up after that.

It's all pretty classist, imo. A two income family making 200k gets a lot of aid per marketing materials at these schools. And if you have a million dollar home? Fine! But if you have 400k in an account because grandma died? Not okay. You could drive an uber, have zero retirement, zero assets, and win a 1million dollar lottery and have to pay Princeton full fare. But if you had a million dollar house and 3 million in retirement, you'd get aid.

This might me the dumbest post I've ever read on this topic, and there's some pretty stiff competition.

In the first scenario, yes, if you inherit money it is considered an asset, and you will be expected to use it for college. Why on earth wouldn't you be?

And in the second scenario, yes, you are expected to use your lottery winnings (!!) to pay for college. Good lord.

I call bullshit. If I'm feeling irritated that my full freight tuition payments are essentially paying for not only my kid to attend college, but also paying for 2 - 3 of their cohort, I have a right to question why the overall cost of college has become sky high. And that's after reckoning with the fact that the income and assets being used against me in the tuition calculation process were already used against my kid in the admissions process.

If you took the total cost to run a top private school and distributed that over the entire student body, the average annual cost to each family would be no more than $20 - $30K (and not $90K+) ...

I know. Boo hoo. "Great problem" to have. Whatever.

Did . . . you respond to the wrong post?

Anonymous wrote:It's my understanding that each college calculates a family's assets differently, which can result in very different financial aid packages. This is particularly true for home equity.

I work for the government and have a middle-class income. But the house that I bought in 2014 has more than doubled in value, making it a seemingly big asset on paper. It's far from the worst problem to have. Still, for a school like Vassar, it means we'd get almost no financial aid. On the other hand, Skidmore does not seem factor in home equity in the same manner, and thus provides more than twice as much financial aid despite having a much smaller endowment than Vassar. These are just two examples, but I've gotten very different financial aid estimates from peer schools.

Anyhow, most people can get a pretty good sense of potential financial aid by taking out their tax returns and using a school's Net Price Calculator. I've found that many school's financial aid officers are very willing to have a call or Zoom to discuss things in greater depth.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figured for most schools it was about 200-250k. One school publishes that (maybe Princeton) and when I did a lot of NPCs, that number seemed to be the line. Then it ramps up after that.

It's all pretty classist, imo. A two income family making 200k gets a lot of aid per marketing materials at these schools. And if you have a million dollar home? Fine! But if you have 400k in an account because grandma died? Not okay. You could drive an uber, have zero retirement, zero assets, and win a 1million dollar lottery and have to pay Princeton full fare. But if you had a million dollar house and 3 million in retirement, you'd get aid.

This might me the dumbest post I've ever read on this topic, and there's some pretty stiff competition.

In the first scenario, yes, if you inherit money it is considered an asset, and you will be expected to use it for college. Why on earth wouldn't you be?

And in the second scenario, yes, you are expected to use your lottery winnings (!!) to pay for college. Good lord.

I call bullshit. If I'm feeling irritated that my full freight tuition payments are essentially paying for not only my kid to attend college, but also paying for 2 - 3 of their cohort, I have a right to question why the overall cost of college has become sky high. And that's after reckoning with the fact that the income and assets being used against me in the tuition calculation process were already used against my kid in the admissions process.

If you took the total cost to run a top private school and distributed that over the entire student body, the average annual cost to each family would be no more than $20 - $30K (and not $90K+) ...

I know. Boo hoo. "Great problem" to have. Whatever.