<p>Some people just like to feel “punished”. ;)</p>
<p>A thought on savers v spenders- if the income is the same and you have $100k, $200k, $500k in assets, use the formula, determine your asset protection amount, then payoff your mortgage. Assuming that takes ALL your unprotected assets, apply to a FAFSA school, not a CSS Profile school and you will have the same exact package as the person with a $500k mortgage. </p>
<p>No, you cannot get the same package at each and every school. If you are brilliantly lucky and get into Princeton, they (and a few others) will ignore your equity, but otherwise you could choose FAFSA schools and be on equal footing, in terms of aid offered, with those spenders.</p>
<p>Every parent, including most of us here, has likely gone through some period of the “it’s not fair” regarding how aid is calculated and that is true, it is not “fair” it is a formula. Some people fit better into it’s parametres than others, it’s not perfect, it’s the way they have decided to try to address things consistently. Just like the tax code, you can make some efforts to fit better into the formula- pay off that car instead of having $20k sitting in an account.</p>
<p>Very rarely, though, is any one in a position where a complete spend down is smart, you will still have costs to pay, even with an EFC of $0- how many schools gap, how many school include loans, student loan or HE loan for you?</p>
<p>I think all of us here can admit that we whined at one point, if only to ourselves about the fairness of it, but unless you are right on the border of qualifying for a Pell grant or not, spending down is not really going to help all that much. </p>
<p>OP, you pasted to ask a question, you are accurate that in certain situations you might not get the same aid as some one who has had more fun with their money; however, it will really depend on the school, so learn and research, find the best schools for your situation and structure your assets as best (pay down mortgage)</p>
<p>My first D did not have enough options as I did not understand that high equity & appreciation in west coast homes made Profile schools not a good choice, unless it was those tippy top ones who ignore HE. I learned and did much much better for D2 and will have good options for the next one, too, by changing the list of schools chosen to better match our situation. Nope, not “fair,” but it’s life;)</p>
<p>I think the first purchases Laserbrother should make during his ill-conceived spend down spree, should be the services of a financial planner and college consultant. This would be money well spent.</p>
<p>I’ve been thinking the same thing about the college financial advisor. Random spending does seem ill-advised.</p>
<p>O.K. looks like Saver is the “better” life style. Now I feel much better.</p>
<p>PS. Have at least $150K in the checking account so a little spending does not hurt anything.</p>
<p>What somemom said.</p>
<p>Laserbrother- get some financial counseling, you are not investing the money you do have wisely. You do not need large amounts of completely liquid assets…</p>
<p>mathmom-There is always a cost/benefit ratio. Expensive area with the lifestyle (the everyday things- people, events, all those little things that make up the fabric of your life) you want makes it worth living there, or you wouldn’t do it. You seem happy with your choice, good for you. I’m sure all of us are at an age where we can list a lot of things we gained and gave up by the choices we have made. Too bad we can’t have it all, like we thought we could when we were college age…city amenities with the suburban lifestyle without any commute, along with a nice financial cushion … comes to mind. But that is a whole other, wishful thinking, thread.</p>
<p>wis75, “you are not investing the money you do have wisely” how do you know that? The $ in my checking account is for spending only. We have several other accounts. I got 25.9% return on my 401K last year, for example.</p>
<p>“Expensive area with the lifestyle (the everyday things- people, events, all those little things that make up the fabric of your life) you want makes it worth living there, or you wouldn’t do it.”</p>
<p>We live where our jobs our. I don’t think colleges expect you to get up and move. If they did, then they should expect that the family who lives somewhere else, having the same lifestyle at less cost, should move where the person making more money with the higher cost of living is.</p>
<p>Let me also add, if income is based on two earners, then a college should expect a stay at home mom to get a job.</p>
<p>wis</p>
<p>I can think of quite a few pounds I’ve gained by the choices I’ve made. Unfortunately, not the monetary kind.</p>
<p>janesmom1 brought up a point that I have wondered about. How does having a stay at home parent (without extenuating circumstances) figure into financial aid calculations? For example, would the aid be the same if only one parent in a two parent household is working (without extenuating circumstances) and that person earns a certain salary, versus another two parent household where the combined income equals the single salary in the other family?</p>
<p>It is a really good question.</p>
<p>With all of the financial aid experts on CC Parents Board, someone should know the answer to this.</p>
<p>Mof2-I wish I knew. I do not know, but maybe some of the senior posters can answer this question. </p>
<p>It just seems to me that if you are accepting a student and comparing them to another student, then fa should be doing the same in offering their packages–esp where they only give to “need”.</p>
<p>I have heard from many that I work with where they were paying full price, and their roommate whose family owns this and that and driving a BMW, was getting a big break.</p>
<p>janesmom, </p>
<p>But what do you do in a situation where a stay-at-home needs to be home? i.e., younger sibs, elderly parents, stay-at-home parent with serious illness which does not qualify for Social Security disability, but is nonetheless debilitating?</p>
<p>“Send them to work” seems a bit draconian. I know we’d be better off in terms of not having to boorow for college if I were able to return to work full time (or even reliably on a PT basis). But I also know that 47% of every dollar would go towards EFC, and some 30-ish% of my income would go to fed, state and local marginal tax rates. Hardly seems worth my health!</p>
<p>Before I get flamed, we won’t qualify for need-based fin aid. As most folks on this list know, full pay doesn’t require that one makes mega bucks! :)</p>
<p>I don’t know about the BMW part, but it seems like the combined incomes of two people of the typical age of parents of college students who are working many normal (not super-high salary) professional jobs (such as pharmacist, teacher, professional in a government agency, engineer) are in the the “high income” bracket disqualifying them from aid for even the most expensive colleges. Others have chosen to have one parent stay home while they have kids at home. Does this choice qualify them for aid?</p>
<p>wait a minute here. janesmom1, are we back to talk about saver vs spenders again? “whose family owns this and that and driving a BMW, was getting a big break.” those are the spenders and I started out saying they win because they know how to work the system.</p>
<p>then a college should expect a stay at home to get a job.</p>
<p>they do-
use the calculators with one income and with two.
If one family makes $60,000 between two earners, the EFC will be lower than if one earner earns all of the income $60,000.</p>
<p>That’s why I was taking the BMW out of the equation. Presumably, the familly with one working parent wouldn’t be able to afford a BMW for their kid. I am asking about whether a stay at home parent (without extenuating circumstances) is taken into consideration for financial aid determination.</p>
<p>Additionally- when you have two earners there are more benefits- usually medical insurance that overlaps rather than through one parent- which gaps, more money for retirement and better stability incase of job loss of the working parent.</p>
<p>Some schools may also adjust EFC to account for the reason that one parent is staying home- health issues with parent or with child- irregular and long work hours of the earning parent including frequent trips- however, schools aren’t mandated to take into account reasons for being restricted to one income & wont increase income protection allowance.</p>