We are close to retirement. Our income is relatively low but we have accumulated a low seven figure nest egg. We have cash, College 529 investment, stocks and equity in our house. What will be our chance of getting any financial aid from any private college?
We live in Illinois. Any advice will be appreciated.
Have you run the Net Price Calculators for a few colleges yet?
@blossom Thanks. Just google Net Price Calculator and find the website. Run it for a few colleges and we guess we are not eligible for any financial aid.
you can also try the efc estimator tool at http://www.finaid.org/calculators/finaidestimate.phtml.
i plugged in basic stuff and 1M in cash - EFC was >40,000
That gives you a rough estimate - not much need-based aid in that scenario. but there may be other factors when you plug in your own info.
When you say your income is low…what do you mean? Below $49,999 a year?
Do,you qualify for a means tested benefit like free or reduced lunch?
Are you able to file a 1040a or 1040 EZ?
If not…your regular bank account assets (balances NOT in IRA or TSA retirement accounts) will e counted as assets.
Schools using the CSS Profile will likely use some amount of your home equity in the equation.
The 529 accounts will be used…any you own…or any your kid owns.
Your retirement income will be considered income.
How much can you pay annually? Will your kiddo be eligible for merit awards anywhere…those don’t consider income and assets.
Were you expecting need based aid? And if so…how much?
You are a multimillionaire and you want financial aid?
How much of your six figure nest egg is in your ITA and TSA accounts? How much is home equity? How much is your “lower” income.
Most low in one folks don’t have investments, stocks a fully paid for home, and cash too…oh…and 529 accounts.
Just saying.
What year in HS is your kiddo?
Also remember that the financial aid forms use prior prior year income now. So…
2018-2019 will use 2016 income
2019-2020 will use 2017 income
2020-2021 will use 2018 income
2021-2022 will use 2019 income.
When do,you plan to retire…it might not matter…at all for financial aid application purposes.
http://www.gao.gov/assets/680/670153.pdf government report on retirement assets May 2015
page 15
We are 95 percent confident that the 10th percentile amount is between $9,644 and $23,956, the 25th percentile amount is between $36,999 and $60,601, the 50th percentile amount is between $123,799 and $172,201, the 75th percentile amount is between $306,096 and $482,304, and the 90th percentile amount is between $885,356 and $1,339,444.
@“Snowball City”
Money IN retirement accounts like TSA and IRA accounts is NOT used in the need based aid calculations.
Many are low EARNED income people…Gates, Buffett, the Millionaire Next Door-types.
Thank you all for your advice and comments.
Our income will be below $50,000.
We just want to see how much we have to spend our nest egg on our children college education. By no means we want to take advantage of the system.
Is that $50,000 income after you retire…or now?
Really, your assets WILL come into play for fafsa purposes unless you also qualify for a means tested benefit like food stamps.
And if your kiddo is applying to Profile,schools, your assets WILL be counted.
BUT balances in IRA and TSA accounts are not included as assets on the Profile or fafsa forms.
How much of your nest egg is in your qualified retirement accounts? Those should NOT be included as assets.
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low seven figure nest egg. We have cash, College 529 investment, stocks and equity in our house. What will be our chance of getting any financial aid from any private college?
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Private colleges that give the best aid will require CSS Profile. They won’t ignore those assets if they’re not in a protected retirement acct. Are they? Sounds like they’re mostly not.
If your kid has good grades and test stats have them apply to schools where they are above the top 75%.
We did not qualify for financial aid, so didn’t fill out FAFSA. Son has received some decent merit packages from schools that are looking for students with higher test scores and grades than their norm.
Good luck.
We have different numbers but similar situation of high assets for our income level.
If you do not want to be full pay private tuition, you should look at merit aid schools.
Midwest liberal arts colleges are pretty good hunting ground for merit aid. You can find more options if your child doesn’t need engineering and has good grades and test scores.
I agree with the other posters–applying to Us where your child will be awarded generous merit aid because your child has the test scores and grades the U is looking for is ideal. If your income is low and you don’t want to have to liquidate assets, it really is the only option other than loans that will have to be repaid.
Again thank you everyone for your advice and comment. We apologize for not proving more details about our personal finance as we are uncomfortable to talk about it in details in a public forum. But we appreciate all the suggestions and we shall look into colleges that may provide more merit aid.
don’t feel bad that you didn’t share more. generalities are fine.
as i started learning the lay of the land in terms of financing college, the single most eye-opening thing was running the net price calculators for potential schools. Next would be how some schools use merit to try and attract kids that don’t want to pay the full freight. There are plenty of threads here about merit-heavy schools, so look them up.