<p>I live in New York and well, it's expensive living here. The town I live in has very high taxes and most of the residents are well off, but there are a few that aren't (like me). My family of 4 currently has ~$85,000 in savings but we don't own a house and live in an apartment. My question is whether this would hinder the chances of me receiving financial aid for college or not, because although we have that much in savings, my parents are very frugal and we save every penny we get in the hopes of someday buying a house. Our annual income is ~$65,000 - $70,000.</p>
<p>Would I get better financial aid packages if we decide to buy a house, use all of our savings to buy it, and take out a mortgage? Or would that have no effect on financial aid? I'm just worried that our savings would hinder my chances at financial aid.</p>
<p>What Happymom is saying is the best way to look at it. The good news about living in NY is that there are a lot of state school options that are very reasonable especially if you commute. The fact of the matter is that at your parents income level, they may be expected to pay $15-20K a year for your college. You are not entitled to an PELL money. Unless you are a super top candidate, getting substantial merit money is nearly impossible.</p>
<p>Bandwagon, please dont forget about the TAP program, which can provide grants for NYS kids. I think it tops off at AGI of 80G, but it could be less, ask your GC</p>
<p>Even if you “qualify” for financial aid, unless you go to a school that “meets need” and doesn’t expect your family to contribute an unaffordable amount, you’ll still have a problem.</p>
<p>What schools are you considering? </p>
<p>What are your stats?</p>
<p>Do you know how much your parents will pay each year? If you don’t know, please ask them. This will largely determine where you should apply to college.</p>
<p>you may need to consider schools that will give you a generous merit scholarship in case colleges expect your family contribution to be higher than what your family can afford to pay.</p>
<p>Be sure to apply to a couple of schools THAT YOU LIKE that you know for sure that you’ll have all costs covered. Those will be your financial safety schools.</p>
<p>It doesn’t look like you’ll get much from TAP if your parents’ income is $70k…you’d get like $500 per year…which is better than nothing, but might only pay for one semester of books.</p>
<p>Bandwagon, The answer to your question depends on the specific school and how they determine financial aid. </p>
<p>The federal FAFSA form does not look at home equity in their formula, however, your family income is above the amount for federal Pell Grant. So whether you put the equity in a house or it sits in the bank, you will only qualify for $5,5,00 loans for the first year. (Everyone who fills out a FAFSA can get that. The only difference is that if you have need, the federal govt will pay the interest while you are in school.)</p>
<p>The Profile form (used by several hundred top schools but that includes a lot of the ‘elite’ institutions) asks about a LOT of things-- retirement accounts, home equity, etc. So it won’t make a difference where your $ is. </p>
<p>Here’s the catch though: those numbers don’t necessarily mean very much. The FAFSA number is used to qualify you for Pell (which you won’t get), some school-distributed aid (which usually goes to the most needy among the Pell grant recipients) and loans (which you will get no matter what). Other than that, most schools that use FAFSA do not meet need. Schools that use Profile are more likely to meet aid but they define how much aid you need.</p>
<p>Depending on that age, roughly $50K of the $85K falls under the “asset protection allowance” and won’t be considered for financial aid purposes. That leave $35K – if that is not sheltered in any way, then that will increase the family EFC by about $1,960.00 </p>
<p>In other words, if the EFC based on income alone is $6000, then all that money in the bank would raise the EFC to about $8000. </p>
<p>I don’t think it is worthwhile for your parents to make any major expenditure to try to increase financial aid eligibility. However, if they have any debt, it would be a good idea for them to use their assets to pay off things like credit cards, car payments, etc, before they have to fill out any financial aid forms. FAFSA EFC will rise or fall by $56 for every $1000 in assets.</p>