Why doesn't FAFSA care where u live??

Paying for College
1

<p>Why doesn't fafsa take into account the general property values and cost of living?
I just don't understand this.
In My county, with over a million residents, it's nearly impossible to go to have a 3 bedroom house for a family of four under 500,000. The district (approx. 50,000 people) where I live generally has home values 800k and up, and it would be nearly impossible to got to my public high School( 2,000 students) with a home value under 700k.</p>

<p>So my county's average salary is 120,000$ for family households-according to city data.com and wiki- and my districts avg. salary is 150-250k.
This makes nearly everyone in my county,especially my district, nearly in eligible to afford financial aide.
My parents make about 150k, and I received my fafsa package and received only the loan.
They can't afford anything more than 5,000k a year for college, if even that much. We live in an 800k house, taxes are really high, and the cost of living in generally is higher than average compared to the whole nation.
My question is only why doesn't FAFSA include home values, or at least the cost of living in certain parts of the country?
I would think some other families are having the same problem. My family lives an average lifestyle, and even though 150k may seem really high for a family living in Atlanta, it's actually pretty normal or below normal where I live. Please have perspective. </p>

<p>I live in DC-MD-VA metro region. I can imagine some parts of California, New York and maybe some parts of Massachusetts and Hawaii probably have the same issues.
Please don't ask for my EFC or my grades/SAT scores etc, for that's not my question.</p>

2

<p>Everyone has a home whether rented or owned. It is your choice to live in an expensive area. If you live in VA or MD, you have some excellent instate options that are very affordable for most folks in your income range. </p>

<p>We know a lot of people who live in the greater DC area in four bedroom homes that cost far less than $800,000. They choose to live a little further outside of DC where property values are less.</p>

<p>If your family can afford $5000 a year, and you take the Direct loan, you will be able to easily pay for any of the community colleges in VA or MD, and then you could transfer to a four year school to complete your degree.</p>

<p>Your family income of $150,000 a year is three times the national average for a family of four. </p>

<p>And yes, I “get it”. We live in CT where the cost of living is high.</p>

3

<p>Yes that is true, but they are usually in lesser/worse school districts, with a father commute to work. My dad’s friends who live in Manasas VA has a commute of 2-3 hours due to traffic, and still the average home value is 400k. </p>

<p>My family doesn’t even own a car and has to take the metro and public transport to work.</p>

4

<p>I won’t ask your stats, but if finances are an issue, and you won’t qualify for need based aid, look at the automatic full tuition/full ride thread which has a stick pin in it in this forum.</p>

<p>You are very fortunate to live in a fine school district, in an expensive home, in a well regarded area. Count your blessings.</p>

5

<p>At the end, you probably don’t even care what FAFSA ask as the EFC is likely to be very high. ;)</p>

6

<p>True that. The FAFSA formula is heavily weighted towards income. With $150,000 in income, your FAFSA EFC will likely be in the $50,000 a year range…or close to it.</p>

<p>Schools that use the CSS Profile will look even more carefully at your family finances. In many cases Profile schools actually compute that your family can pay MORE than the FAFSA EFC.</p>

<p>The only guaranteed aid you get with a $150,000 income is a Direct Loan…$5500 for freshman year. </p>

7

<p>I work for the government (as do many people in DC!) and I have a base salary but then a locality % to adjust. I was paid 15% more when I lived in California, and honestly it didn’t cost me 15% more to live there than where I live now. Some things cost MORE here, like auto insurance, food, sales taxes. If I moved to DC I’d get 20% more than here.</p>

<p>Often salaries are more for people who live in high cost areas, and then those who are living in a low salary area actually pay more for things that are standard across the country, like credit card fees, federal taxes, vacations, an OOS or private tuition. If you make $150k in DC, that job may only pay $100 in St. Louis or Omaha, you still have to pay the same for tuition at Duke or Miami or Texas.</p>

8

<p>Your situation is one that many people ought to consider. A $150K salary seems like a lot, but not when you take that $150K job in the Silicon Valley or in the DC-MD-VA area. A $150K salary is not enough to live a lifestyle that includes an $800K home, along with the state income taxes charged in California or the DC-MD-VA area. Your family knows this very well, as you don’t even own a car. It is a set of lifestyle choices that does not make sense, and not even the quality of the public school system is worth it.</p>

<p>A typical family earning that income, with only federal taxes, SSN, Medicare and other pre-tax withdrawals, is probably taking home 70% of the gross salary. Deduct another 5% of gross to account for state income taxes, so that family is bringing home 65% of $150K, or $97500. Now add on the mortgage for an $800K house (hopefully purchased before it became valued at $800K, let’s say for argument’s sake, a mortgage for $400K, maybe $2000 a month for housing payment only), and now that take-home is reduced by another $24K a year. So life in the DC-MD-VA is now being financed with $73500. Many people around the country would say that is still a lot of money. Of course, they are the ones who don’t earn more than $73500 a year, and don’t experience having 35% of their gross salary lopped off the top by income taxes, so it is easy for them to have that opinion.</p>

<p>Now, I could make $73500 work for my family, living in an expensive area, but it takes living a lifestyle sans any thing fancy and impressive - no competing with the Jones. And I did do this for many years in the Silicon Valley, and was able to do so since I purchased my home before the last boom, and, so at least did not have to choose between $800K houses. But once I realized that my family’s next move into a house that fit us - not a fancy house, but just a basic house with more room - was going to be a half million dollar decision, that was it. No more. Besides, the commute was just not worth it, and there was no getting around having a car there.</p>

<p>So we left. And we had a choice to go to DC-Maryland-VA or we could go to Florida. The DC-MD-VA job offered $50K more a year than the Florida job. But once the numbers were crunched, life in the DC-MD-VA was going to be worse - same high housing, same high state income taxes, same awful commute, and now we would not even get the benefit of great California weather. Florida was a no-brainer - no state income tax, lower housing, no commute. A move to DC-MD-VA would have been to the benefit of the federal government and the state government, who would have gotten most of that $50K difference in salary.</p>

<p>Families have to make choices, and while your family is probably not in a position to make any changes now, it is something for you to consider as you head to college and make decisions on where to accept a job offer. Life is all about choices, and the lure of a high salary needs to be considered in light of where you have to live in order to get that salary. It may not make you feel any better knowing that, even if your family earned half of what they do, you would still not qualify for any free financial aid, but that is the case, so you are not really losing out on something just because you live in DC and your parents earn $150K a year. All you qualify for, as far as federal financial aid, is that $5500 a year your freshman year. Hopefully you can get some merit aid, because for kids in families like yours (which includes my kids, too), your path to college is not going to be financed by the taxpayers. The sad irony is that your parents are financing some other kid’s college education, via their disproportionately high tax dollars, while they cannot help you significantly with yours. </p>

9

<p>I have a good idea of where you live. Within a 25 mile radius, there are plenty of cheap housing options. Much, much cheaper than $500K housing. Your family just thinks they are too good to live in them. Too dangerous, run down, out of the way not the right neighbors, too small, etc, etc. There are plenty of poor people in your area in the radius I just defined, and they have places to live. Your family just doesn’t feel like they have to live that way. Trump would probably consider your home not habitable for his family, just as you feel certain cheaper options not a consideration for yours. </p>

<p>Chesterton has given you a good idea of the scenarios we all face in terms of finding jobs and places to live I live in an even pricier area than you do, and my brother even more so. So, yes, I get what you are saying. This choice thing starts right now for you with the college you choose and the price you have to pay for it. </p>

<p>My son had several job choices. His friend is in the Silicon Valley with a prestigious company, sharing a one bedroom with two other guys and having to fight the shark tank every day. Needs that car for any freedom. Depressed because for all the money he makes, prestige of the job the reality is a rat race for him. My son picked a midwest firm paying slightly less, has been promoted, and lives in a pretty swank apt complex with pools, health clube right near amentities, living a high life, but not in California. Weather sucks. Prestige, not so much. But he has the money in the bank his friend does not and lives as a pretty well to do person. Doesn’t have to watch his prices on things at all. He’s definitely upscale there. So those are the trade offs. He ruminates about leaving because there are drawbacks of living where he is, but does he want to pay out the money to get those things? Choice he has to make. </p>

10

<p>A lot of people don’t seem to think about the fact that if you are getting paid $150K you are contributing to social security accordingly and will get more when you retire. If your company has a 401K and you are contributing a percentage of your income, you can put more in that as well. Then those people can sell their high priced McMansions and retire to cheaper places with plenty of money. </p>

<p>The rest of us should help them put their kids through college why?</p>

11

<p>@sylvan8798… Are the rest of you helping them put their kids through college? :)</p>

<p>The top 10% of earners (earn at least $120K) pay 71% of the federal income tax collected, the bottom 50% (earn less than $34,823/yr) pay 2% of the federal income tax collected.</p>

<p>Those earning between $70-120K contribute 17% of the total federal income tax collected, and it is this group which I believe is hit the hardest, because they earn too much to qualify for free financial aid grants, pay higher SSN and Medicare contributions to the rate that those earning more than $120K do, pay similar taxes as those who make $121K+, but don’t have that extra $10-20K net cash a year that someone earning between $120-150K might have to sock away in a 401K, or a 529, or even to buy a McMansion (though most of the people I know who earn $150K don’t waste their money on McMansions - they like older homes, older cars, and eating at home.)</p>

<p>So no need to get into the whole class envy thing. The truth is our system is very very progressive, as far as redistribution of income, and the fact is that one group pays a disproportionate share of the burden, while another receives a disproportionate share of the booty. The OP has just faced the hard truth head on about the OP’s family’s financial situation, which on the surface looks like it ought to provide for a financially stable life, even allowing for some contribution to college, and yet it does not, thanks to cost of living, income taxes, SSN/Medicare contributions, etc.</p>

12

<p>^And yet, if they are not better off than those on the rungs below them, moving down is easy enough.</p>

13

<p>My family chose where I live due to the really good school district to provide the best education and a top 100 public school. My parents mortgage is 3,500- bought the house around 650,000$. I live in a house with less than 1800 sq ft. We do not live an extravagant lifestyle at all!
And there is not a lot of houses in the suburbs of VA and Maryland that’s under 500.
And my parents don’t drive whatsoever, they never had lisceneses. So I have to live near the metro, and since they wanted a typical house with a yard, that’s the minimum price to live in the area.
Please don’t assume that I’m living large and owning a McMansion and going to the Vineyard every summer, cause that’s the complete opposite. </p>

14

<p>Again, my parents have a grand total of 5,000 in pocket change to put towards savings. They can put towards maybe 2k a month if my parents squeeze every cent. Which goes towards my college fund.
Btw: I just looked on zillow houses for sale incl. apartments and condos for houses under 550,000$ for sale in my district and surrounding districts that could potentially go to my school or comparable high schools. 10 in total popped up. Only 2 were a house and none of them had 3 bedrooms-which I would think is average. This district plus surrounding districts have an approx. population of 75,000 people. </p>

15

<p>sylvan8798- my parents have a total of 80k in their 401k if that means anything to you</p>

16

<p>Complicated. The govt did review making some Fafsa changes with what they called a Cost of Living Adjustment. But remember, the Fafsa is to determine eligibility for federal aid. Understand the primary concern of the study was related to Pell Grants. That is, the kids whose families struggle on a different level. Kids whose families may not even own a home or have a 401 or a school with lots of amenities. I’m afraid you have to put this in perspective. </p>

<p>We’ve had this kind of thread before. “Oh, you don’t understand how expensive it is to live here.” And, the same “we don’t have any choice if we want our kids to go to one of the best high schools.” Or “But we want our family to be safe.” There was even a rollicking thread about how impossible it is to live on 250k, when you consider the cost of a housekeeper, parking fees, dry cleaning, lunches out, the sports coaching- and so much more, including that pricey house/mortgage. </p>

<p>Certain allowances are already in the Fafsa formula. It’s the CSS Profile that will ask for more detail. Then, it’s up to the colleges to see what they can do for you. They are allowed to use their own CoL awareness in their formulas. But many will also review assets- and that includes equity in that home. And many look at other discretionary spending, too. </p>

<p>Yes, the middle class can get squeezed- which is why you want to bone up on financial aid, really learn what the considerations are, and be ready for those forms. I also think you have to remember that whether it’s N VA or the MD suburbs, there are plenty of struggling folks who just don’t have even the income or assets mentioned here. </p>

17

<p>$800k for 1800 sq ft seems like a fair market price where I live in CA. Your parents chose to live in the better neighborhood and there is a cost to that benefit. Maybe your parents can sell the 800k house and move to the 500k house as you will be leaving for college and won’t need the extra room. This results in 300k to your college education. Instead of asking why FAFSA doesn’t consider where you live, you should ask why your parents don’t consider moving to a different neighborhood with a decent school.</p>

18

<p>Koso…the point is…you don’t HAVE to own a house or condo. You don’t HAVE to have four bedrooms. You don’t HAVE to live in the most pricey area. </p>

<p>You have benefited from living this lifestyle.</p>

<p>I would strongly suggest you start looking for schools where you would qualify for automatic merit aid. There is a thread with a stick pin at the top of this section called “automatic full tuition/full ride scholarships”. See if you would qualify for any of those.</p>

<p>Also, you might want to read about the word “average”. If the average in your town is $150,000, that means that there are folks BELOW that amount and folks above that amount.</p>

1 Like
19

<p>

</p>

<p>If it makes you feel any better, people who earn $150k aren’t the only ones who don’t get much federal and state aid. We’re a single income family in NYS (making just under $60k) living in a house valued at roughly $125k. The house is paid for, but we don’t have much in savings (although my husband will get a pension). I’ll go back to work full-time after my youngest is done home schooling, so her financial aid is likely to be less than my son’s, and his isn’t great. Our EFC for him is just under the amount you say your parents can pay for your education ($5k). Pell & state aid will be less than $3k, the rest we have to cover. In order to avoid large loans, we have to consider less expensive schools (even though he was accepted into a program with a guaranteed transfer to Columbia and given a very generous merit award) or both he and I will have to get jobs. Our other option is to pay out of pocket for community college for both, then I can get a job after my daughter graduates from high school and put all my salary toward their last two years of college. Finances are tough and it’s disappointing if we can’t afford our dreams. I’d suggest you sit down with your parents and review what your options are. Also, review the threads that list guaranteed merit aid for certain schools. If your stats are high enough, there’s aid out there. Good luck.</p>

20

<p>Kosovania, we can give you all of the reasons in the world, but the bottom line is that the formulas for fin aid simply DO NOT take COL of where you live directly into account. It’s just the way it is. THere are other inequities in the formula too. You get more than double the single protection allowance as a married couple than a single parent for example which makes no sense and is ever unfair. I can run up a list of inequities there. But the bottom line is that even the bottom line EFC (expected family contribution) isn’t a bottom line at all since there isn’t a school in this country that will guarantee to meet it. It pretty much says you don’t get federal aid until you pay that EFC, that’s it. </p>