<p>So my parents just made a 401k withdrawal of $50,000 towards the down payment of our first home purchase. There income is only a combined $60k a year. This is my senior year of high school and am in need for financial aid. How much do you think I can be covered for freshman year? and beyond? Will schools like Georgetown University give full rides for this scenario? Can I apply for financial aid after freshman year? And will I qualify for the Gates Scholarship? Any help is welcomed.</p>
<p>I think you need an attitude adjustment. It is NOT all about you.</p>
<p>If your parents have to report the 401k distribution as taxable income on their 1040, it will count against you for financial aid purposes. In addition, if they take the first-time home buyer’s credit (not sure if that’s still around …), it has to be reported as untaxed income. In your case, it may make sense to request a special circumstances review. Some schools will remove the 401K distribution from income if you provide proof that it was used to purchase a home. </p>
<p>Profile schools (like Georgetown) will look at the equity in the home, while FAFSA schools will not.</p>
<p>$60,000 a year is too much income for a “full ride,” if by full ride you mean that your costs will be 100% covered by grant aid. </p>
<p>And I agree with Erin’s Dad.</p>
<p>Your parents are hardly f’ing you over by using their savings to pay for a home. That money is not available for you for school, anyway, as it is intended for retirement … if they withdrew it for you for school, they would have to pay a huge penalty. You have a good chance of getting an adjustment to ignore that distribution, but it’s not guaranteed.</p>
<p>My older brother is a senior at American with a full ride, need based; my sister also was a Gates scholar a few year back. They blatantly ignored the fact that I am going to college this upcoming year, and apply for financial aid. We have not bought anything yet, they just made the withdrawal today over the phone, maybe it’s not too late to stop the transaction?
And by full ride, I forgot to mention it was only full tuition and work study, he lived at home.
We are Vietnamese, they do not speak English, so my siblings advise this situation.</p>
<p>Are you serious??? Your parents have every right to spend their money … the money they work hard to earn … on whatever they see fit. If you can’t afford an expensive school as a result, there are more affordable options. YOU might have to compromise, but it is THEIR money.</p>
<p>Keep in mind they are not buying a house only for themselves, they are buying it for mainly for my siblings and I. My parents are in their early sixties, late fifties so I think they would be willing to hear my perspective seeing that I will probably be in mountains of debt without the need-based financial aid and scholarships.</p>
<p>You will only be in “mountains of debt” if you attend a school that is beyond your means. The reality is that YOUR debt as a student is limited to the Stafford loans and maybe a Perkins loan…which will NOT cover the full cost of attending a private university.</p>
<p>I’m thrilled for your parents and family that they are making the purchase of a home. It is a GREAT time for first time buyers…lower housing costs AND low interest rates…seldom does this combination happen. You should be celebrating their decision, it will provide a roof over YOUR head too.</p>
<p>American University does not guarantee to meet full need. Your sibling got lucky on that one.</p>
<p>If you are truly competitive for Gates and other high profile scholarships, then you would also likely be competitive for some merit awards that are fairly substantial if your stats are high enough.</p>
<p>What are they? You need to start looking at these things too.</p>
<p>Will more than one of your siblings be in college while you are this coming year? If so, that will help with your family contribution.</p>