<p>Due to past savings, we have about $1Million in assets, almost all of it in stocks. But, our current income is low (<50K per year) and is expected to remain low. We don’t own a home, and will be dipping into this savings for the rest of our lives. Is there any hope of getting any financial aid in any of the top-20 private universities in a situation like this for a top-notch student? In case there are, any recommendations about specific universities to consider etc.?
Thanks.</p>
<p>Maybe, but no one can tell with certainty how those handful of colleges will assess the savings portion (remember it’s income + assets). Also, colleges where your academic record would be desireable and the colleges award merit money to entice you to attend .</p>
<p>Are you a junior?</p>
<p>Are the savings in retirement accounts such as 401Ks or in other investments?
Retirement accounts are protected and are not considered in the FAFSA formula. Other parental investments will be included in the EFC at a rate of 5.6% per year, so $1 million in investments will add $50K to your EFC.</p>
<br>
<br>
<p>Yes. Does that change anything?</p>
<p>Being a junior would allow you time to apply to some merit aid schools. It doesn’t change anything else.</p>
<p>Correct Gandalf, as a junior you can research colleges that will grant you merit aid. I assumed when you referenced stocks that on face value your parents savings were…in stocks or mutual funds…if they are in an IRA or part of a recognized retirement account like a 401K, those assets have some protection.</p>
<p>Are you including capital gains in that $50k of income? If not, you need to add that in as well. I imagine that with 1M in stocks, you have some substantial capital gains every year as well. your family income may be higher than you think when you include capital gains or quarterly/yearly dividend checks.</p>
<p>It is VERY UNLIKELY that your child will receive any need-based aid. Your savings is a very large amount and a portion will be expected to be used towards your child’s education.</p>
<p>If you are not prepared or willing to spend any or much of your savings towards your child’s education, then your child will need to apply to schools where his/her stats will get large merit awards.</p>
<p>Need-based financial aid is really for those who don’t have that kind of money available to them.</p>
<p>I see that you’re looking at MIT…MIT will expect your family to pay for all of its costs. MIT does NOT give merit scholarships. The ivies also do NOT give merit scholarships…neither does Stanford.</p>
<p>If you are the student, I suggest that you talk to your parents about how MUCH they will contribute each year.</p>
<p>If your parents give you a very low budget for how much they will spend, I know it will be a disappointment for you, but most top schools will not be affordable for you.</p>
<p>What are your stats?</p>
<p>If all of this is in individual stocks there won’t be any capital gains until they’re sold, so this isn’t necessarily something that’s going to increase AGI every year.</p>
<p>One million dollars in investments (assuming none are in protected categories such as IRAs or 401ks) will add around $50,000 to your EFC. Most colleges have a cost of attendance of $50K or less, although a few more might push through that upper bound in the next couple of years or so.</p>
<p>The OP is unlikely to qualify for any need-based aid.</p>
<p>An income of around $50k is not “low” - that’s solidly middle-income. Families making that much, even without your enormous banked wealth, are expected to contribute significantly to college costs.</p>
<p>I think the OP said the income was UNDER, not at, $50K/year. It’s possible to receive need-based aid with an income at this level. For FAFSA, it’s possible to qualify for the Simplified EFC formula which excludes assets. That only requires AGI under $50K and one of the following: 1040A/EZ eligibility (not likely with that much in stocks), or a parent with dislocated worker status, or someone in the household qualifying for reduced school lunch, food stamps, TANF, etc. during the prior 2 years. </p>
<p>Do you know if any of their investments are in qualified retirement accounts? I think it would be a good idea for one of your parents to familiarize themselves with the FAFSA instructions, the EFC formula guide, and the book “Paying For College Without Going Broke”. They should be able to estimate the EFC under both federal and institutional methods with the College Board calculators. Once you know that, and how much they’re planning to contribute per year, you’ll be in a much better position to determine which schools may be affordable to you. For now, try to avoid falling in love with any one school, or even a group of schools (ie top 20 LAC). Unless they’re willing to pay for most of the costs, you need to keep an open mind and apply to a range of schools.</p>
<p>Also, the OP says his family doesn’t own their own home.
Maybe this is would be a good time for them to consider buying one, since for FAFSA the equity in one’s primary residence isn’t counted. (However, for CSS Profile schools it is - the amount of impact varies by school.)</p>
<p>Points to the smaller number, so “<50K” would be “more than $50,000.” If he flipped the sign… somewhere between $40-50K is still middle-income, even without having a million dollars in assets sitting around.</p>
<p>Virtually all schools which claim to meet full need require CSS-Profile, which will not exclude the huge pool of equity investments, no matter how they slice it.</p>
<p>Anyone with a million dollars in the bank does not need “need-based” aid.</p>
<p><pedantic>
less than $50k is written as <$50k
greater than $50k is written as >$50k
</pedantic></p>
<p>OP, I may be reading too much into your initial post, but it looks like your family’s financial circumstances have changed dramatically. If that’s true, how was your family initially planning on paying for your college education? Do you know if they were willing to pay a certain amount per year, or in total? Is a member of your family knowledgeable about investing and financial planning?</p>
<p>*If all of this is in individual stocks there won’t be any capital gains until they’re sold, so this isn’t necessarily something that’s going to increase AGI every year.</p>
<p>*</p>
<p>Unless the family has just left their stocks the same over the last year, that could be true. However, someone with $1M in stocks may have bought/sold various stocks throughout the year. </p>
<p>Also, it’s likely that with $1M in stocks that there have been dividend payments from some of them. </p>
<p>But, I’m guessing that the overall income is more than $50k from cap gains from any stock profits from any sales and/or dividend checks that occured over the year. It’s unlikely that there were none. </p>
<p>Points to the smaller number, so “<50K” would be “more than $50,000.”</p>
<p>And, it’s not pointing to $50k…so the number is lower than $50k. </p>
<p>Think of it this way…X < $50k…so X is less than $50k, cuz it’s pointing to the X (the smaller number)</p>
<p>Thanks all for the suggestions and comments. Yes, the 50K figure included any capital gains realized and dividends. And yeah, by “<”, I indeed meant “less than” :).</p>
<p>Gandalf, you said that these investments were what your family will be living on for the rest of their lives. If that is true, a big chunk of that money should be in retirement accounts, which are excluded from consideration for financial aid. </p>
<p>The financial aid methodology assumes that if a family has assets that are not needed for retirement, and has college-age children, a small percentage of those assets can be used to pay for their children’s college education.</p>
<p>^^^</p>
<p>True…but I don’t think the family can do much about this now. With $1M in stocks, the amount that they could put in retirement accts over the next 4 years won’t change their EFC enough for him to benefit. </p>
<p>(P.S. I would love to know how a family with modest income has been able to end up with $1M in stock. It sounds like the family has little “earned income” since some of the claimed income is cap gains and dividends. </p>
<p>Is it possible for one of the parents to work?)</p>
<p>I think Princeton University does not require CSS profile.</p>
<p>“Virtually all schools which claim to meet full need require CSS-Profile, which will not exclude the huge pool of equity investments, no matter how they slice it.”</p>
<p>^ true … sort of … I believe Princeton does not require the CSS Profile … but has their own form which also asks about assets</p>