This spreadsheet may be out of date (it’s from 2014), but I found it useful in locating schools that didn’t take home equity into consideration.
Click on “Home Equity Spreadsheet” partway down the page:
http://www.thecollegesolution.com/will-your-home-equity-hurt-financial-aid-chances/
“…recommends emailing schools to ask how they treat home equity so you have a record of their responses later on if you end up appealing a financial aid award.”
@craspedia - interesting spreadsheet. Unfortunately one of the most important components is missing - namely what ratio they use to convert home equity into income. The article generally states 5%, but is it really 5% for any (to say nothing about all schools). For example the FAFSA uses 0.12 (0.2% for the student) to convert assets ( cash/investment/equity (other than 1st home)) to “income” after reducing the assets value with a protection allowance.
To quote the article’ “Normally, the schools that use the PROFILE formula would assess the home equity (as well as other parental assets) at 5% for financial aid purposes.”
Additionally it says “as well as other parents assets”, which means reduction from the 12% the FAFSA uses!
If the 5% are true and it is indeed the same for all assets may make say BC (discussed heavily in this thread) with 200 K of total assets and 60 K income into the ~15,000 BC’s EFC**. Which is far from terrible.
** assuming “income to expected contribution” use the same (or close to same) formula as FAFSA!
This doesn’t sound like a “parent heavy” search to me. Sounds like the parent has abdicated actually responsibility for where to apply to the kid, and now is kvetching that the choices are unaffordable. Without giving your kid a hard and fast number of what you will pay, and refusing to foot the bill for applications to clearly unaffordable schools, I just don’t have a lot of sympathy.
did you run the NPC at all?
is she planning to live at home or is she a state resident?
because i get a much higher EFC than $15000/yr when i just roughly (VERY ROUGHLY) guestimate based on those numbers.
(obviously i cant duplicate your exact situation so maybe yours does come in differently).
just curious.
Do you own a second home? You reference mortgaging your “other properties”. How many are there…and what is the equity.
The net price calculators seldom ask about additional real estate. The equity in these IS considered, and is often very heavily assessed because owning a second home is considered very optional. Colleges assume you can sell it to pay for college…or,should,have put aside money for college first and foremost.
What I’m saying is…the net price calculators might not be accurate at all if this family owns property in addition to their primary residence.
I just don’t see OP’s daughter wanting to go to some of those schools. Is she going to pick Rice over Scotland? If not, drop it off the list.
If she ‘insists’ on applying to all those schools because she would gladly go to any one of them, I tell her okay, you are going to the cheapest one and see how many drop off the list.
^in that case she might make the unfortunate move to drop the cheapest ones if they are also less pretegious.
^ I meant “prestigious.”
OP could own a shack worth $10k or 5 rental apt buildings worth a ton. Who knows? He didn’t say.
I’m guessing that it’s not a shack. OP mentioned mortgaging these properties…and a second mortgage on a $10,000 shack isn’t going to net him enough to pay for those $70,000 a year colleges.
equity primary residence - 62K equity 2nd real estate [not rented so no income from there] 30K <<<
[/QUOTE]
There isn’t much mortgage potential in either.
Based on this “new” info I think Edinburgh and Illinois aren’t doable without FA. Ideally your D will get into a school like Duke or an Ivy League that will be very generous. My concern is that you also need to be applying to schools like Alabama that will give her a full ride or at least free tuition. Then you can use your $9,000 (what you said you can pay) along with that $5500 loan to pay room and board. She can get a part time job on campus to pay for her flights home etc. Based on your need, you need to swallow your pride and think of financial safeties in case the reaches don’t work out. I hope they do, but you never know.
@thumper1 it’s worth $30k
Has the OP indicated what his/her price limit is?
I did not read all 8 pages. If your D is accepted to Duke you need to see if the FA package works. If it does not, I believe that this would be a legitimate reason to turn down the offer. At that point she would need to attend an affordable school that would give her merit money, or a different school that offers a better FA package. Your daughter needs to shorten her list.
Do not spend down your savings or move back to a third world country ( really?). Your daughter will have to face reality and choose an affordable school. What is your price limit?
And if retirement stays at least semi sound (I know very unlikely) we can live more comfortable life on 2 * $300-500 pensions, than on the about $5000/mo. income we currently earn. <<<
[/QUOTE]
Is that $5k per month your “take home” or your gross monthly earnings? Do you have a business?
Does that income include the rent from those other properties? How much are those other properties worth?
OK my price limit is…
45K savings + 15 contributions from Grand parent + 25K (sale of 2nd property ~30K, after commissions, taxes etc 25K) = 85K
85 K / 4 = 21,250/y… add a little cushion and the final number is:
$17,875/y…
All that with no new loans (parent or student).
Like I said in my first response…I would be praying for an acceptance ED to Duke with a financial aid package that works.
She can always tell her friends if she gets into Duke (or wherever) even if she doesn’t attend. It’s still prestigious (and smart) to have earned a huge merit scholarship (i.e. U Alabama/honors.)
If she does NOT get accepted to Duke, I would suggest she take a hard look at all those reaches on her list.