'Rich' is a relative term.
> living in a $1.2 million home and earning more than $250,000 a year.
In other words, you make enough to not qualify for any aid, bit not enough to have $60k/yr disposable income. I see where the parents are coming from.
> living in a $1.2 million home and earning more than $250,000 a year.
In other words, you make enough to not qualify for any aid, bit not enough to have $60k/yr disposable income. I see where the parents are coming from.
It's not like college is an unforeseeable expense. On $250k per year you should be comfortably able to plan for putting a couple of kids through college. Same holds true for most people on track for $250k/yr when their kids are in college. You may have to forgo a new Mercedes, but that's fine.
It might make sense to adjust how the wealth test is applied (I don't know how it works), but it's just silly to suggest that the average family with a $250k/yr income can't afford to send a kid or two to college.
You have a lot of options at that income level; even if I couldn't come up with 60k/yr straight cash, I could finance part of it over a decade or so any hardly feel it. Also, my kid can take on 20k or so their damn self so they have some skin in the game. 20k is nothing.
It's pretty hard to sympathize tbh, when I've had to work with waaaaay tighter budgets than that for extended periods.
Your present situation is not a guarantee of future income levels.
For those of you downvoting me, my parents home is currently valued at 1.134m and at the time of purchasing my Dad made less than 250k a year. It absolutely is possible to purchase a house worth 1.2m making 250k a year. Maybe not a great financial decision, but certainly possible.
It's pretty incredible that a statement such as "They could have not bought a 1.2M home..." is upvoted, despite being obviously false as there absolutely are people that make 250kish and purchase homes worth over a million (such as my parents) but I get downvoted for stating that that statement was false, even though it is accurate. The upvotes/downvotes on this site are just as toxic as reddit; people use them as an agree/disagree button regardless of factuality or relevancy, and don't even comment to provide a counter point
Yes, but my point is not whether they can but whether they should.
Surely you don't want to penalize those people who arr grossing a lot but netting very little.
My house is a 3 bedroom, 1500sq/ft, not super fancy.... and is $1,000,000
Why should I subsidize their choice when I chose to live in an area where the cost of living vs salary is much more amenable to my choices and financial goals for me and my family?
For instance, right here in Atlanta, someone can buy a decent size home with an income of $70K. Your average journeyman CRUD SASS developer with 3-5 years of experience can make $120K. More than enough to buy house, support a family, save for college, etc.
Most of the rest of the country has decided not to live in the Bay Area....
They are though. They're not signs of relative wealth.
https://www.merriam-webster.com/dictionary/wealth
Also, What? Why is that person "struggling"? That's 50K annually in principle and an extra 2500 in interest (at 5%) assuming you had a 0% down payment. Assuming you're paying half your income to taxes, you still have 72,500 left annually after making those home payments for whatever else you need to live off of. I get that this is fast and dirty back of a napkin math, but when you're mortgage is only 6X your annual income, you're probably doing fine. If you're struggling to exist with 72,500, we have very different definitions of "struggling".
My original point is this: "Wealth" is generally relative, and I accept that, but I can't believe that the holdings and wages are so out of proportion with the rest of the country that someone can attempt to make the claim that pulling in a quarter of a million dollars annually and living in a 1.5 million dollar home doesn't make you wealthy.
Signed: someone from the NYC tri-state where we have had "old money" families forever but still know what rich people look like.
(Final point: yes, you can eat home equity because you can convert it into liquidity most of the time.)