Financial Aid & Additional Asset - Please help!

somemom
Sun, 27 Apr 2008 17:08:30 +0000

Innovational- I thought maybe you meant prompt not abrupt :)

Swimcatsmom gives excellent and detailed advice and what has already been posted is accurate.

It is a “flaw” in the system that some one with a huge company paid pension plan has an asset that cannot be touched and people who do not have that resource but who are doing the “right” thing are assessed on that value. It would be nice if there was a way to address this, but that takes a systemwide change. Back in the 19070s I am pretty sure FAFSA did not protect the primary residence. I seem to recall a lot of late 1970s SoCal whining about the inflated home values affecting financial aid of kids at my HS.

Maybe someday, as companies stop offering retirements, people doing this would be able to place such assets in a retirement plan, with age restrictions and with no limits like the $4-5000 of an IRA. Then we could save for retirement and buy investment real estate within that framework, but for now you have to deal with the reality of the system.

One thought, if your main & 2nd homes are near each other can you move to the second home which I assume is paid off and use the home with the $270k mortgage as the asset home? This would only help with FAFSA and only if the current value of that home results in a small equity.