Financial Aid & Additional Asset - Please help!

Innovational
Sat, 26 Apr 2008 14:56:50 +0000

Greetings CCers,

I have been accepted to two schools and both basically want us to pay full tuition.

Let me start off with the fact that my father and mother are in the working class. Their total income per year is around $80,000. My father is 68 and is on the verge of retirement. My mother is 58. We do not have much in our savings account. We are currently still paying off $270,000 of mortgage on our current home. My parents are hard workers who have done nothing but save a lot over their careers. I am saddened by the fact they need to use all of their money for my college education.

My father purchased an additional home about 10 years back for $250,000. The market price right now is around $700,000 - $800,000.

According to my schools financial adviser, the extra asset is the reason behind our huge EFC (44k).

Please understand that is it rather difficult for us to pay for 4 years of college (which would cost around $200,000). The asset cannot be easily sold…



After long talks with the financial adviser, we’ve come up with such:

We ultimately hope that the school (Northeastern) will end up giving some financial aid for the 2nd, 3rd, and 4th years if these plans work. I also understand that everything we do will be recorded in our tax returns.

Plan 1: Selling the house. Paying off the mortgage for our current home. Putting the money in retirement accounts (From what I hear the FA people / government do not count retirement as much towards the EFC / need based aid).

Plan 2: Same as above, except sell our current home as well and then purchase a more expensive house. This would leave us with little money on hand. (From what I hear the FA people / government do not look at the price of the home you live in).

Plan 3: Sell the house and then put most of the money into Bonds (can’t touch the money for years).

Plan 4: Do not sell the house or sell the house. Pay full tuition for 4 years…(I plan on taking out $10,000 in loans every year to ease the cost).

Plan 5: Sell the house to a relative for a very low price. (But we still manage the home)

-Would any of these work in effectively giving us some aid for the next few years? From what I hear, schools don’t drastically change their financial aid packages from year to year.

-There is another big factor that I failed to mention earlier…I do have a younger brother who will be going to college in 4 years (entering freshman when i’m a senior). Would any of these plans work for securing decent financial aid for him?

I would really appreciate some help on the matter. We are currently in a pretty difficult situation.

Thank you.