How Much Do You Think I'll Have To Contribute?

<p>My parents make about 40k/year.
Own house - 500,000ish in value
Savings Acct - 75,000ish</p>

<p>1 older brother in community college.</p>

<p>Applied to top schools, most of which require FAFSA + CSS</p>

<p>Your parents make $40K/annually and your house is worth $500K? So, all their money is going to real estate taxes? Something's doesn't seem right to me.</p>

<p>Um, I don't know what you mean, but I'm look at our 06 Annual Property Tax Bill, and it says $3700. I think that just be expenses for city, though, because it mentions elem schools. high schools, county, etc. on the sheet. I'm looking at our 1040 and I don't see anything about real estate taxes. I am guessing, but I think my parents pay about 5,000 yearly on real estate.</p>

<p>I'm not sure if any of this will clear things up:
My parents bought the house about 15 years ago for a bit more than half of the current value.
We live in LA County, CA</p>

<p>Optimization</p>

<p>If you are applying to the UCs, they will not take into account the value of your primary residence (UCs only require the FAFSA).</p>

<p>Some of the top schools cap the equity in your home. Stanford caps it at 1.5 x your income.</p>

<p>what does capping the equity mean?</p>

<p>In calculating the parents' contribution, Profile schools consider home equity as an asset. So in Optimization's case, instead of counting the home equity at $500K, Stanford would consider their home equity at only $60K (1.5 x yearly income of $40K).</p>

<p>I am probably simplifying things too much but this is how I understand it.</p>

<p>okay, thanks fresnomom.</p>

<p>That's pretty awesome. Do you think that I'll have to take out a lot of loans, work part-time, etc? </p>

<p>I'm wondering because the private schools - for the most part - do require the CSS profile as well. I'm just trying to get an idea as to how much my family will be expected to pay for the privates.</p>

<p>Thanks.</p>

<p>Each private school uses their own formula for deciding the amount of each component of the FA offer (grants,loans, work study). Some schools are known to be very generous with grants, others are heavy with loans, while still others will not even require loans for lower income applicants. If you provide a list of the schools to which you applied, perhaps others can post their experiences with those schools.</p>

<p>Besides UCs, I applied to:</p>

<p>Brown
Stanford
UChicago
St. John's
Oberlin
Yale
Pomona
Northwestern
Tufts</p>

<p>Re: Stanford</p>

<p>If your parents make under $45K their contribution is usually $0</p>

<p>The student's contribution is approx $6K/year (savings/summer earnings, work study and loan)</p>

<p>They won't count the house if your parents file the tax short form I believe.</p>

<p>The private college will most likely leave you with lower loans because unless you get a special scholarship, at UCs most just get Federal money and loans.</p>

<p>I did my FAFSA and it said my EFC would be about $2000.</p>

<p>I was wondering, how do I submit it to more than the allowed amt of schools?</p>

<p>I know that UChicago's new Odyssey Scholarship eliminates loans for families making under 60k a year, and I believe Tufts does the same (either that or eliminate the parent contribution, check the website) for families making under 40k, though I'm not sure of the effect of assets and stuff on that (I'm kinda new to all this too).</p>

<p>This is the kind of question that makes me wonder how easily manipulated the system COULD be. Now, before I start, I am not insinuating this is what the OP is doing, only that it can be done.</p>

<p>To make 40K/yr and own a home worth 500K (even in CA) with a savings of 75K seems very hard to do. I have also seen other threads where people earn very little money yet own great assets. Now, I do bookkeeping for various companies. It is NOT hard to manipulate an income for a year, or even four. What's to stop people from making lots of money for years, and then the year just before a child starts college, only showing less than 40K in income so the very competitive schools give the kids a rull ride? I also know one couple who divorced at the end of the year just before their child went to college. The non working parent was the custodial parent, of course.</p>

<p>I realize no system will be perfect, but this one stinks.</p>

<p>I agree. It is easy to manipulate the system.</p>

<p>My parents bought the house for about half of its current price, and have slaved over their full time jobs for the twenty-ish years they have lived in this country. They hardly buy anything they don't need to, including cars. The 75k is really meant for emergency medical purposes because we don't have health insurance (and my mom has some heart problems).</p>

<p>How would you suggest they fix the system though? I know a few of my schools require copies of the tax return (Yale for one, I think). I think that's a good start.</p>