How is home equity treated for college financial aid?

by Grace

The short answer:

Your home equity will count on the CSS Profile, but not the FAFSA.

Michelle Kretzschmar of Do It Yourself College Rankings explains more.

Since each school decides if they use home equity in their methodology and how much to consider, how much home equity will affect financial aid will vary by institution. Mark Kantrowitz of  Fastweb, estimates that colleges cap the amount of equity (value of home-mortgage) considered at between two to three times annual income. Troy Onink in Forbes reports that  “home equity counts under the Institutional Methodology, but only up to 1.2 times the parent’s adjusted gross income (AGI) under the Consensus.”

When in doubt, ask the school directly.

If you want to know the actual figure, you’re best bet is to ask the college. According to Money Watch.com

If your home has appreciated a lot, ask private colleges how they factor in home equity when determining aid, advises Paula Bishop, a financial aid consultant in Bellevue, Wash. Their answers may differ dramatically. Some schools, such as Princeton University, ignore home equity. Others, such as Boston College and American University, include 100 percent of it as an asset.

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Troy Onink, “How Assets Hurt College Aid Eligibility On FAFSA And CSS Profile”, Forbes, 2/14/2014.

Michelle Kretzschmar, “Does home equity affect financial aid?”, Do It Yourself College Rankings, 11/11/2013.

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