Hi all,
I’ll try to be brief. We are currently a full-pay family with an EFC of around 70K, we will pay around 50K a year for D23 to attend college starting in the fall. We are hoping that schools using the CSS profile will continue to take siblings into account, we have a sophomore who will start college in fall of 2025. We realize this is just a hope and not a guarantee.
We are considering selling our primary (and only) home in about a year and renting. The reasons are complicated but mostly about the ability to be more mobile for my husband’s job in the longer term.
How could this affect any FA? The sale of the house will result in a large amount of money being in our accounts. Probably around 400K. We realize that what happens with the CSS after the FAFSA redo isn’t clear yet but anyone have a best guess? Is this a terrible idea?
How much of the proceeds could you move into retirement accounts? (IRA, 401K, etc.) Those funds would be sheltered. But it’s going to be hard for a financial aid officer to ignore 400K in cash (or similar); you’d need to ask for a special circumstances review to explain that you owned a home, sold it, and intend to buy another home once your husband’s job situation stabilizes.
But it might be moot- you don’t know where the younger sibling is going and it could be to a college which will offer loans and nothing else (you aren’t eligible for Pell anyway). And you’re already full pay for D23, right? So it could have zero impact on your aid- you aren’t getting any now, you won’t get any down the road…
Thank you. This is pretty much what we assumed, I guess we’ll need more information about where S25 is looking and what happens with the CSS profile and siblings.
Are you paying 50k for college because that is the price, because of merit money, is there any FA involved? If you don’t need to file FAFSA/CSS with this school to get this price point, you should be ok for kid #1 at least. If you do need to file FA paperwork, I might be taking another look at other college offers to pick something that was based on ticket price or straight merit if you needed this financial flexibility in the coming years.
I would definitely contact a financial advisor on this because there can be some big tax implications of selling and not resinking the funds in another property within a certain time frame as well. I do suspect your EFC would take a serious hit that year too. If people could easily shield this much accessible cash, everyone would do it. Good luck!
We are dealing now with the consequence of selling our home in 2019 after we moved across country for a new job. In our new location, we let our D23 choose the high school she wanted to attend and the one she selected was because of its dramatic arts program (she was in a performing arts middle school). However, it was not in a town we saw ourselves living long-term. We rented a house and put our proceeds in a new account to buy one when she graduated. Since we had lived in our old house 20 years in a hot LA neighborhood, we sold it at a nice profit. On paper, we are loaded, but in reality, that’s our money to buy our next house.
If we had bought a new house, the equity would not have been counted on FAFSA and we might have received some financial aid. I did add an explanation on her CSS profile but she hasn’t received a penny of FA, only merit aid.
Thanks for your response! The 50K does not include FA, it does include about 22K in merit. I believe that the penalties for not buying a property right away have been legislated away but I will definitely check.
$400,000 in assets will add about $22,400 to your FAFSA EFC per kid. (Since they dividing EFC will have ended by then).
No one knows what that will do for Profile schools. But if nothing changes…take about $13,500 additional per kid as it’s a 60/60 split for profile schools…not 50/50. Of course…that 60/60 is for your whole family contribution….I just did the asset amount.
Thanks all, sets up an interesting scenario for us. I guess we’ll have to stay in our house as long as we “might” qualify for aid when both kids are in school at the same time. If we don’t I guess we’ll sell
I’m quite sure I can’t say this as well as @blossom. But I’ll try and she can chime in. Please don’t do anything you wouldn’t be doing anyway just for financial aid gain. You need to look at a much broader picture.
Let’s just say…if you want to or need to sell your house, then do that. If you have $400,000 in the bank and that adds $22,000 to your college costs, it’s not all of your house profit.
