<p>My D will be senior this fall.
She will apply all Need_Base private college to get Financial Aid.</p>
<p>Our Family Total income is about $48K(pre_tax)
We own a house (worth $650K) and only $ 50K morgate left.
Now we have $50K in saving account.
My question is
How can we get maximum Financial Aid ?
Pay off our morgate? or just leave $50K there.</p>
<p>Thanks for your advice.</p>
<p>I am not an expert, but from everything that I have read you would want to apply to schools that only look at the fafsa because the css profile includes the asset of your home to pay for college.</p>
<p>Thanks, My D will apply to schools that all need css profile. That why am I asking that question.
I am concern if my home equity is very high, that will affect our Financial Aid. right? Maybe we cannot get anything?</p>
<p>bulb I do not want to give incorrect advice, but I do not see an advantage to paying off the mortgage. Your house is an asset, and the $ in your savings is an asset. I would look for merit aid, instate schools, and schools that do not include your home as an asset.</p>
<p>Our home equity will prevent us from getting any aid. I think the expectation is that you use 5% of it each year as well as 5% of savings but I'm not sure that there isn't a number before that kicks in.</p>
<p>I want to know how they calculate the home equity in CSS profile?
I remember there was a previous thread talked about that only $40K(from home equity) is count as asset.
Is this correct? Does any financial expert know this?
thanks.</p>
<p>It may have said that you are "given" 40K in equity before they count it as being available for school.
Assets aren't counted as heavily as income, but you have $700,000 in assets that are available for tuition.
You should probably be looking at both schools that only offer need but also schools that have merit aid- to have a broader picture to compare.</p>
<p>To the OP, you really, and I mean really have to do some looking. You need to find schools that don't hammer you with home equity (Princeton won't). If need aid is a priority it should become your primary focus.This is relatively findable stuff at top schools websites or pick up the phone and call them.</p>
<p>Just a hunch, but are you self-employed or do you have substantial deductions from income that give rise to the apparently large swing between your income and your equity? (I'm not being mean, my sheet looks like a 3 year-old prepared it.LOL. Your's can't be any worse.) Or did they strike oil in your backyard?</p>
<p>There are some schools out there that have a ceiling on the amount of home equity they consider. They are the 568 schools, from the 568 President's Working group. A complete list is below.</p>
<p>From the consensus methodology used by the 568 schools: </p>
<p>"E. Home Equity </p>
<p>Recommendation: Count home equity capped at 2.4 times income minus mortgage debt with professional judgement adjustments in individual cases."</p>
<p>Complete information about the Consensus Methodology is found here:
<a href="http://www.news.cornell.edu/releases/July01/568.presidents.report.html#part1%5B/url%5D">http://www.news.cornell.edu/releases/July01/568.presidents.report.html#part1</a></p>
<p>Schools in the 568 Group:</p>
<p>568 Presidents' Group Member Institutions
Amherst College
Boston College
Brown University
Claremont-McKenna College
Columbia University
Cornell University
Dartmouth College
Davidson College
Duke University
Emory University
Georgetown University
Grinnell College
Haverford College
Massachusetts Institute of Technology
Middlebury College
Northwestern University
Pomona College
Rice University
Swarthmore College
University of Chicago
University of Notre Dame
University of Pennsylvania
Vanderbilt University
Wake Forest University
Wellesley College
Wesleyan University
Williams College
Yale University</p>
<p>Wonder if you will be considering any of these schools?</p>
<p>Wow, if that's true, there are a lot of young retired multimillionaires I know who would get complete aid. How do they adjust for the rich who have no ongoing income, something more and more common?</p>
<p>That's an easy one. 70% of students receiving aid at most of the Ivies and prestige LACs are in the top quintile in family income. Those young retired multimillionaires might not receive complete aid, but (given the right circumstances) might get a lot of it. But remember - this may exempt home wealth, but not other assets.</p>
<p>I think there is something in that "with professional judgement adjustments in individual cases", perhaps. And yup, mini, they sure look at other assets.</p>
<p>Bulb, many colleges limit the amount of home equity they count to a limit based on family income - typically to about 3x the income. So it may be that only $150K of your equity will be considered. Of that, slightly more than 5% would be assessed toward EFC -- so it could be with your income, that your home equity adds $8K to EFC. My guess with your income is that could result in a total EFC of ~$15K.</p>
<p>I'm in a similar situation, and I would suggest the following:
Sit down with your daughter and have a very specific talk about how much your family can afford to contribute to college costs, and how much she will need in financial aid.</p>
<p>Insist that your daughter apply to at least one (preferably several) financial safeties: colleges where she is likely to get in, that will also be affordable to you. These will either be public colleges or privates that only consider FAFSA, or else private colleges where your daughter's grades & test scores put her in line for substantial merit aid. </p>
<p>After that, let your daughter apply wherever she wants. She needs to know at the outset that these colleges may not be affordable - and of course it would be a good idea for her to contact financial aid offices and ask how home equity would be calculated, so you at least can cross some of the list if it will be impossible. That's really all that you can do.</p>
<p>Maybe when your daughter has a more realistic picture of finances, she will also revise her college list somewhat.</p>
<p>Cur, if bulb lives in California like I do, there is no discrepancy whatsoever between income & home equity. $650K is below median range where I live -- and I also happen to live in the community with the financially-poorest school district in the entire state, in terms of dollars available per student. I live in a working class neighborhood - I have one neighbor who is a cop, another a school teacher, another a minister. Small run-down houses, with everyone driving older-model cars. The question really is when we got into the market - obviously no one could afford to buy a home here on a $50k annual income, but most of the homeowners have been here many years - and the cost of real estate makes moving pretty much impossible. There's not much financial leeway to downsize. </p>
<p>The colleges know this - there are tables they can refer to which tell them average home equity by zip code. Whether they want to cut families who live in expensive areas a break or not, I don't know. But I doubt that any financial aid officer will blink on seeing a $600K home equity from states like ours.</p>
<p>Thank you every response. That is all very helpful.
We live in NYC. My husband earned a lot of money
before he got serious sick two years ago.
So we paid our mortgage very quickly.
Now only me is working and my husband maybe needs two more years to recover.
Accoring your information, Schoole only count us
$48K x 2 - $50K = $65K for our home equity. That is good.
All our saving account $50K is under my name.
So Our EFC is around $8K.(calculate by calmom)
My D got 2310(M800,V740,W770)on SAT I
and (Chem770,MathIIC 770,USHist750) on SAT II.
She GPA is 94.3/100 and she has a lot of EC's</p>
<h2>Here is her list:</h2>
<p>Princeton ED
Dartmouth (reach)
Cornell(reach)
Swarthmore (reach)
Wesleyan (match)
Emory (match)
Haverford (match)
NYU (match)
U of Michigan (safty OOS)</p>
<h2>a couple of SUNY (safty)</h2>
<p>So It looks like most of schools are in 568 Group
We can let her to apply Princeton ED
because Princeton doesn't count home equity.
Is this good list for my D?</p>
<p>Since she has some LACs on her list, and has Emory and UMich, I would suggest she add some other LACs that might give her merit money - this will do 2 things, it will give her another financial safety, and allow her the opportunity to choose a smaller school. The 2 that I am most familiar with are Rhodes College and the Univ of Richmond - but Brandeis would fit into this group, and so would St. Mary's of Maryland and Goucher. A number of the smaller Pennsylvania schools would also offer merit aid, but someone else will have to comment on those, because I don't know which ones have good merit aid. She probably only needs to add 2 of these.</p>
<p>The reason I think she needs to add a couple of merit aid schools is financial - I could see a situation where she is admitted to some schools on that list, rejected at others, and cannot afford to attend any schools other than the SUNYs that she gains admission to. I wouldn't trust the colleges' promises on financial aid, until I had an offer in hand - also, God forbid, what if your husband's health worsens?</p>
<p>The smaller schools that are a little down in selectivity give good merit aid because it makes more financial sense for them to do so. Their overall cost is such that the merit won't bring them down below the cost of a SUNY, but it might give your daughter a choice of a smaller, more geographically diverse school than a SUNY.</p>
<p>I think you should think long and hard about any school ED. It's not so cut and dried that you don't want to compare offers. And if your husband goes back to work in 2 years, will you be prepared to pay full freight if she has gotten only need based aid?</p>
<p>Hi Bulb,</p>
<p>You might also be interested to know that schools which use the Profile AND/OR are part of the 568 group also will take it into consideration if you have medical expenses. This is from the 586 Consensus Methodology link:</p>
<p>"L. Medical Expenses </p>
<p>Recommendation: Employ the Institutional Methodology treatment of such expenses. </p>
<p>Discussion: Families whose unreimbursed medical expenses exceed 7.5% of income may deduct these expenses when completing their federal tax forms. Unlike the Federal Methodology, which ignores these costs, current IM considers unreimbursed medical expenses that exceed 4%. We recommend that the current IM treatment of medical expenses be included in the Consensus Approach. In cases of extreme medical expenses, professional judgment guidelines should be applied locally."</p>
<p>You will be asked to document your medical expenses before the financial aid offices will adjust the aid, but it may help you.</p>
<p>Kirmum, a retired multimillionaire would have a significant amount of income from dividends and interest; financial aid is calculated from all sorts of income. Also, the home equity limitations don't apply for other property or assets -- that multimillionaire presumeably has other investments and a bank account. So the formula might end up sheltering some percentage of the the multimillionaire's equity in their first home ... but all the other assets are going to be counted.<br>
$1 million in assets equates to a minimum EFC of $50K, still above the annual cost of attending most colleges.</p>
<p>If she is thinking about Emory, two "similar" schools which are generous with merit aid are Tulane and Vanderbilt.</p>
<p>I strongly second zagat's caution of going ED to ANY school - if they don't calculate your EFC as we have guessed here, you might not be happy with the financial package but stuck with a commitment to the school. </p>
<p>Read the threads on ED pros and cons long and hard before going that route.</p>