Anonymous wrote:

Anonymous wrote:I still disagree that the equity should be ignored for the financial aid purposes. Assuming the house is really worth $1 mln with the cost of $300K, I would say downsize and move to MD or VA (yes, many do commute a long way exactly for the purpose of keeping mortgage low). Financial aid is not faceless - it comes from contributions from real people, who overall are possibly in worse financial situation than the family with 700K equity in the house.

I think everybody on FA should move to Hagarstown.

It does not have to be that far to leave $ for schools.

Anonymous wrote:I still disagree that the equity should be ignored for the financial aid purposes. Assuming the house is really worth $1 mln with the cost of $300K, I would say downsize and move to MD or VA (yes, many do commute a long way exactly for the purpose of keeping mortgage low). Financial aid is not faceless - it comes from contributions from real people, who overall are possibly in worse financial situation than the family with 700K equity in the house.

I think everybody on FA should move to Hagarstown.

I still disagree that the equity should be ignored for the financial aid purposes. Assuming the house is really worth $1 mln with the cost of $300K, I would say downsize and move to MD or VA (yes, many do commute a long way exactly for the purpose of keeping mortgage low). Financial aid is not faceless - it comes from contributions from real people, who overall are possibly in worse financial situation than the family with 700K equity in the house.

I am very much in the “FA should go to those who really need it” camp. But I would NEVER base that on the value of the house that someone lives in. That “value” is often a fiction. Come on now – even if you really think the 300K house that is now “worth” $1M can hold that value in this market, only a fool would borrow significantly against that appreciation equity. It is fool’s gold and a big reason we are in the mortgage mess in the first place. Asking folks to take on a bigger mortgage or sell in a down market to pay tuition is not the solution.

What I do not like is folks getting FA and taking expensive vacations and driving expensive cars. Those are consumer items and are a bit more discretionary. Those are the things I think could be sacrificed to pay tuition – not appreciation equity in a home.

Anonymous wrote:I know I am not, so please explain how taking out 300k on a house that is valued at over a million now is going to be upside down within a year?

My house was assessed at $900K - now it is assessed at $550K. Do you have any clue how the economy and fake mortgages ran up the price of houses and then watched them crash. There was a walkaway in our hood that went for $400K.

Do you have any clue how many houses are upside down and nobody can sell them for their mortgage price? Do you know that many people have lost small businesses, haven't received raises in years, hello?

I faught the tax assessment and told them to comeback when the economy crashed - and guess what they did and I pay taxes on $550K.

I would check how much the county assessed your house and how much it is really worth.

I bought a 300k house because that's what I could afford. Unfortunately, many years later, my mortgage is still 300k because i have had to take out money. However, I have never gone above 300k because we can't afford a mortgage payment above that. If I borrowed 600k, I would be selling the house in a year - even if it wasn't upside down - because I can't afford a 600k mortgage.

I know I am not, so please explain how taking out 300k on a house that is valued at over a million now is going to be upside down within a year?

Anonymous wrote:

Anonymous wrote:Our house is now worth over $1 million but we bought it for 300k nearly 18 years ago.

then you should use that equity to pay for a private school and should not be receiving financial aid.

If you refinance the house - pull out $300K - the house will be upside down in a year - you will be paying 2x the mortgage you thought you could afford and all that $300K will go to taxes and tuition.

Your not an accountant are you?

I'm stuck right in the middle on this one. I think independent schools should encourage diversity, and provide FA to do so. But I doubt that the families with $1M homes in good zip codes and three or more kids who get FA because the numbers just work out to their advantage actually add that much diversity. It does seem like some parents are relying on FA to fund their lifestyle choices -- even when it is only a nice/large house in NWDC or 3+ kids, for example -- instead of moving somewhere in MD or VA with very good public schools and houses that are just as nice/large. It is frustrating to those of us who made different choices -- smaller families, high paying but brutal-hours jobs, etc -- to feel like we don't get a break.

I hope to be an ind school parent next year and will pay full freight -- I'm fine with that. But I'd rather that any portion of our tuition that goes to FA for other students would also support a program that tries to reach out to parents with bright kids who might never have heard or thought of sending their kids anywhere other than the crappy neighborhood elementary school.

We lived in a million dollar home and got financial aid for preschool. The home was owned by my mother, and the fact that we lived with her rent free was what let me afford the 1/2 tuition I did pay.

When I applied for financial aid for elementary school, our "suggested contribution" was something like $274 a year. I thought it was both way too low given that we had no rent, and oddly specific (really, I can't afford $275???). In the end I chose public anyway.

Anonymous wrote:

Anonymous wrote:Our house is now worth over $1 million but we bought it for 300k nearly 18 years ago.

then you should use that equity to pay for a private school and should not be receiving financial aid.

Amen!!!

Anonymous wrote:Our house is now worth over $1 million but we bought it for 300k nearly 18 years ago.

then you should use that equity to pay for a private school and should not be receiving financial aid.

Anonymous wrote:But if you didn't know me you wouldn't know that -- how would you know who owned the house and who didn't?

Don't know about Virginia, but MD and DC have online real estate tax assessment databases that include the current appraisal used by the government and sale/ownership info. I've never used it to track down the assets of FA recipients (ick -- if you're that hostile, go to a different school or don't contribute to annual giving or other FA fundraisers), but people should know that this info is out there and easily accessible. In fact, your local government publishes it routinely.

The most practical but only partial answer to this entire discussion is for private schools to control costs and keep down tuition. If the elite private schools weren't spending close to $40K per student, everybody would be better off.

Anonymous wrote:I don’t agree with PPs that FA provides for socioeconomic diversity. Most schools do not give that much in FA (at most half), so the families still need to come up with quite a lot of tuition. The low income families in the schools my DCs attend are the kids whose grandparents pay for the tuition.

What you describe is not the case at every private school. My DC's school has a relatively large endowment and is able to offer subtsantial amounts of financial aid. There is also a program specifically to recruit disadvantaged youth from very poor circumstances and make it possible for them to attend the school.