Anonymous wrote:OP here.
The home equity thing is frustrating.

Obviously, it's part of our financial picture and at some point in our lives it may turn into cash (not a guarantee but it MAY). So I get that it's considered an asset.

But it's not a secure asset. It's not cash now. It MAY turn into cash some day.

And would anyone in their right mind actually USE home equity (and pay interest on it) to pay for private school? Baring some sort of real extenuating circumstance (kid is floundering and NEEDS to attend private in which case I understand it), it seems like an incredibly foolish thing to do.

It could be cash now if you borrowed against it. As such, it is an asset.

I would never cannibalize my home equity to pay for private school, but people can and do.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sounds like you are overspending.

No, we're currently saving.
But let's say a tuition bill of $126k a year.

$350K
-$36K (401K)
-105K (taxes we pay between federal and state)
-$48K ($3150 total house payment plus I'm rounding up all house-related expenses to $4K a month--expected repairs/utilities--etc).
-126K tuition.
-$5K health insurance premium.

$2500 a month. Could you raise 3 kids in DC on that? (ALL expenses either than housing. Yes, of course it could be done... It's done by MANY people in DC all the time). But that $2500 would cover ALL food, cleaning supplies, clothing, any school or after school/sports activities for 3 high school kids, college savings, travel, medical copays and costs, gas, life insurance, cell phones, TV, car insurance, etc.
You have to admit it would be tight.

It would be tight because one medical or house emergency and you are toast.

The school sports would be free and really you should drop the travel stuff for kids anyway - school sports should be enough.

Also - with that home equity you are getting zero FA for college. So - I'd save it for college unless you do get significant FA. How smart are your kids?

You have to realize that many of the people with kids at those schools have incomes in excess of 500k at least.

Even without home equity, and even with three kids in college and/or private schools, a family with a HHI of $350K will get zero FA for college.

OP here.
The home equity thing is frustrating.

Obviously, it's part of our financial picture and at some point in our lives it may turn into cash (not a guarantee but it MAY). So I get that it's considered an asset.

But it's not a secure asset. It's not cash now. It MAY turn into cash some day.

And would anyone in their right mind actually USE home equity (and pay interest on it) to pay for private school? Baring some sort of real extenuating circumstance (kid is floundering and NEEDS to attend private in which case I understand it), it seems like an incredibly foolish thing to do.

Anonymous wrote:Is there something special about equity in a home versus other assets, or am I reading this wrong? Would it be different if the OP had that $700,000 in a different investment (stocks, savings account)?

Stocks and savings account would be worse for FA. They are totally liquid assets. You won't be getting financial aid if you have 700,000 sitting in the bank. Home is at least fixed assets. Most school will let you have some reasonable house equity.

Is there something special about equity in a home versus other assets, or am I reading this wrong? Would it be different if the OP had that $700,000 in a different investment (stocks, savings account)?

The private school system is regressive. It works fine for the wealthy and the poor that are able to get FA. The ones of us that are in the middle are shut out. It's unfair, I think... but that's life...

Stick to the public schools.

If your kids learn we'll now they will do fine in high school
It's all how they apply themselves. That's a big chunk of money to save.

And frankly unless your in the dc ghetto. Just about any mcps HS will still afford your child a decent education for free.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sounds like you are overspending.

No, we're currently saving.
But let's say a tuition bill of $126k a year.

$350K
-$36K (401K)
-105K (taxes we pay between federal and state)
-$48K ($3150 total house payment plus I'm rounding up all house-related expenses to $4K a month--expected repairs/utilities--etc).
-126K tuition.
-$5K health insurance premium.

$2500 a month. Could you raise 3 kids in DC on that? (ALL expenses either than housing. Yes, of course it could be done... It's done by MANY people in DC all the time). But that $2500 would cover ALL food, cleaning supplies, clothing, any school or after school/sports activities for 3 high school kids, college savings, travel, medical copays and costs, gas, life insurance, cell phones, TV, car insurance, etc.
You have to admit it would be tight.

It would be tight because one medical or house emergency and you are toast.

The school sports would be free and really you should drop the travel stuff for kids anyway - school sports should be enough.

Also - with that home equity you are getting zero FA for college. So - I'd save it for college unless you do get significant FA. How smart are your kids?

You have to realize that many of the people with kids at those schools have incomes in excess of 500k at least.

Anonymous wrote:

Anonymous wrote:Sounds like you are overspending.

No, we're currently saving.
But let's say a tuition bill of $126k a year.

$350K
-$36K (401K)
-105K (taxes we pay between federal and state)
-$48K ($3150 total house payment plus I'm rounding up all house-related expenses to $4K a month--expected repairs/utilities--etc).
-126K tuition.
-$5K health insurance premium.

$2500 a month. Could you raise 3 kids in DC on that? (ALL expenses either than housing. Yes, of course it could be done... It's done by MANY people in DC all the time). But that $2500 would cover ALL food, cleaning supplies, clothing, any school or after school/sports activities for 3 high school kids, college savings, travel, medical copays and costs, gas, life insurance, cell phones, TV, car insurance, etc.
You have to admit it would be tight.

It would be tight because one medical or house emergency and you are toast.

The school sports would be free and really you should drop the travel stuff for kids anyway - school sports should be enough.

Anonymous wrote:Our HHI is $220K, two kids with tuition at $22K per kid and we get zero aid. However, we do know people who are not honest on their FA application forms and who get significant FA aid even though they make more than we do.

250k, no equity (special kid - very $$ all the time in ways we never thought of) no savings (endless expenses) yes retirement . 2 in private (special kid is full pay) . We get 8k in aid.

We thought the private was important for the non special kid because of all of the attention the special kid gets.

Our finances make me want to die sometimes. Does that make people happy somehow?

Anonymous wrote:OP here.
$350K is 2 full time incomes. One fed, one not.
No debt outside of mortgage.
$700K equity (we scrimped and saved for a very large ~$400k downpayment out of grad school--I'm talking we saved $100K a year while making $160K.... for 4 years we lived in an efficiency, never ate out and never traveled while making $170K while saving every spare dime. The rest of our equity is appreciation.
One car--a 2011 Honda van.
$350k income is only past 2 years.

I'm guessing the equity will kill us. Which sucks because we have it because we saved it with blood, sweat and tears. And who in their right mind would pull equity out of their house to pay for tuition? (baring some situation with a special needs kid or similar who REALLY needs private school in which case I would probably re-mortgage my house or do whatever it took) But I totally get that's it's not fair to ask others to pay for our kids if we have the equity...
We're definitely in the "donut hole". $126K post-tax income is an insane expense for school on $350K. Our local public high school is going down the tubes (we use the elementary and middle schools). This is not some "we only want our children to have the very best and we deserve private school" situation--rather, I'm just trying to get my kids a decent high school education. I also realize that there are cheaper options (like Catholic schools).
Again, just wondering what the facts are for the big DC privates.
Thx.

You will also have to provide a list of expenses such as what you spend on vacation, extra curricular, sports and gym memberships, club memberships, etc.

Anonymous wrote:Embarrassing. Aid to people making more than $200K per year. Live below your means.

They did before, socking away $100k per annum, much to their advantage as homebuyers. Why can't you take the same approach now, OP?

Anonymous wrote:

Anonymous wrote:Our HHI is $220K, two kids with tuition at $22K per kid and we get zero aid. However, we do know people who are not honest on their FA application forms and who get significant FA aid even though they make more than we do.

Don't they have to submit tax returns?

Yes, at every school we looked at, you did. I'm guessing there may be some guesswork on PP's part there, because really, who is out there saying "I make $300K but we lied about it on our FA forms, and woohoo! Full ride!" ?!?

More likely, PP is probably making some assumptions about people's income, and possibly about how much aid they get, and almost certainly about what they actually wrote on the form. Because I really, really doubt that the few people out there who are lying on the FA forms are advertising it (but maybe I'm just not at the right school...)

In general, I have a vague sense of how much people make, in that I know what their professions are (so I assume two lawyers are north, and maybe well north, of $300K; I assume two public sector employees are south of it; I make some broad generalizations about doctors based on their specializations). I have a general sense of who gets aid among families I know well, and none at all among families I don't. I know where people live, although not necessarily when they bought their homes (if they own), which makes a difference in how much they cost. And for families I know well, I know where and how often they vacation.

Beyond that, I know very, very little about finances. Some of the high income families might also have very high debt that the school is considering; some of the vacationing families may have parents who pay for that (or for school, or for houses). I really have no idea, and I doubt PP has much more inside info about the families at her school who she believes are cheating.

Anonymous wrote:Our HHI is $220K, two kids with tuition at $22K per kid and we get zero aid. However, we do know people who are not honest on their FA application forms and who get significant FA aid even though they make more than we do.

Don't they have to submit tax returns?

Embarrassing. Aid to people making more than $200K per year. Live below your means.