If you don’t want to pay for a Tesla, buy a Yugo. No one is going to give you a Tesla for free just because you think you deserve it.
Pay for your kids’ college if it’s a school that you think is worth the money. Remember, they’ll be the one picking out your nursing home.
ami- one more time- someone’s spending does not move the needle on financial aid.
Repeat after me.
A parent who spends 100% of their income on toys- but has a 200K income is NOT getting a deal on college. Financial aid’s primary lever is income. You want more aid? Earn less money.
You have bought hook, line and sinker the notion that spending money on consumer goods gets you more aid. It does not. It will qualify you for a boatload of loans (and if you aren’t credit worthy, your kid can borrow more than if you are credit worthy, now there’s a deal-- lend more money to people who can’t handle debt).
The retirement account loophole will or will not go away, but your 200K in income is not going to get you the jackpot in financial aid.
You can believe us or not- or go back to the conspiracy theory website you came from.
I was full pay for my kids college education and I can tell you that nothing I have spent money on in my entire life- parents medical bills, my home, vacations, etc. has ever brought me as much satisfaction as giving my kids a college education. You may think that being a “broke millionaire” will bring you joy and I hope it does- but being cash poor when your kids are in HS is a very stressful existence.
spending does not move the needle on financial aid.
[/QUOTE]
So some amount over half a million dollars (5.64% of $1.something million * 8 years) higher college bills doesn’t nudge your needle? Wow!
@AmIMisinformed
You misunderstand. Savings will move the needle, but the needle will ALREADY be at a high number based on income alone.
You keep saying “charging an extra $200k”, as if that family’s high income (no savings) will yield them free or near-free rides. no. Typically a family earning $200k per year will have to pay ALL costs…even if they’re lousy savers.
No, it doesn’t nudge the school’s needle.
Here you are, applicant A, with an income of $200k and enough money to retire but an old car and a garage full of camping equipment because you’ve decided to never spend a dime on vacations. You’ll get $x in grant money (maybe, from generous schools but probably nothing from most). There’s your neighbor, applicant B, with an income of $200k, a shiny new car, photo albums full of pictures of the great vacations they’ve been on. They’ll also receive $x for college, but he’ll have to work for 10 extra years because of no retirement funds.
We aren’t saying saving for retirement is bad. It’s GOOD. For retirement. Not for college. If you want your children to have choices for college, start saving for college. If you are fine with them having limited college choices because of no savings, follow your plan but don’t be shocked and appalled when you don’t get a big grant for college.
I don’t think OP is learning anything from this…
Once more.
There generous aid does you no good if you aren’t an accepted student.
And lastly…no number on this one. We did what you are suggesting. We leveraged our retirement accounts to the max. There is a limit to,what you can contribute annually. Remember that too. Our feeling was that we wanted a strong retirement portfolio…and we have it.
BUT…at the same time, we fully expected to pay for our kids to attend college. We didn’t expect need based aid…and we didn’t get it. Both of our kids had merit awards…one decent enough, and the other smaller. We got NO (repeat NO) need based aid.
Sure…put your money into retirement…that is fine. But don’t expect it to impact how schools view your income, home equity (because those generous schools DO use that) and other assets. The reality is that the economy isn’t growing THAT fast. $200,000 a year is four FOUR TIMES the average family income.
And you are trying to look into a crystal ball,that does NOT exist. 7 1/2 years from now…the college funding landscape could completely change.
I don’t see this as a moral/immoral issue, but more a case of someone who has not been through the college admission process and buys the myth that people are getting something over on responsible saving citizens like him.
In 10 years the higher education landscape is going to be much different than today. Likely a big move to privatization and an ala carte course access system. More than likely, privatization will include bought politicians that will have served retirement account savings up on a platter to the owners of education. So you’ll likely be back in the same boat.
To be honest the only useful information I’ve gotten from this that the NPCs often lie about providing grant aid. That is very useful information I haven’t seen before.
I don’t see how schools will get away with no need based aid once the list prices are six figures. Not enough mass affluent people will attend to subsidize everyone else. Lesley has already repriced tuition to reflect the actual cost of attendance and cut aid drastically for that reason.
There are PLENTY of colleges already who do not give need based institutional aid in large amounts. PLENTY.
For students with $200,000 incomes…the only guaranteed federally funded financial aid is the Direct Loan which is $5500 for freshman year.
At MOST colleges…that is the ONLY aid a student in this income range will receive.
And it doesn’t matter where the parents have their retirement money.
The net price calculators you are using now are for students who will be starting college in 2017 fall…NOT in 2024.
Not hearing what you want to hear is not the same as not getting useful information.
By the time your kids are ready for college, who knows what the admissions rates will be. At present, the elites that offer generous need based aid and especially those that also offer to meet 100% of (their determination of) need, already have admission rates in the single digits. Maybe by the time your kids are readying for college things might swing back around to having a higher propensity for full pay students, and your attempt to be perceived as having need will backfire.
There are many very knowledgeable posters here who have followed the admissions and FA process for years. And the best advice you can take from this is… listen to them.
MODERATOR’S NOTE:
Agreed. This conversation is just going around in circles. There is a lot of very good information for the OP to digest, so let’s give him/her the opportunity to do. Nothing more to be said. Closing.