![]() ![]() In addition, families should understand that parental assets have a limited effect on financial aid calculations as it is. Home equity of $100,000 feeds into the financial aid formula just like $100,000 of cash would, so paying down your house brings absolutely no benefit at many popular colleges. The Profile form does require you to report your home equity, and, while some colleges cap the amount of equity they’ll consider as a multiple of your income, most of the colleges that use the Profile don’t look at your home equity any differently than any other asset. ![]() While home equity is not reported on the FAFSA, the application utilized to award all federal aid and by the vast majority of colleges to award their own institutional aid, there are over 200 colleges-including many of the most popular private schools-which request an additional aid application called the CSS Profile. Home Equity Is Not Excluded At All Schools Unfortunately, this strategy of “hiding” money in your home is not the magic wand many hope it will be, and it often ends up backfiring on families for a few different reasons. Therefore, if you had $100,000 burning a hole in your pocket, it would be better for federal financial aid purposes to have this money in your house than in an asset included in the aid formula, like a bank account. It is true that the federal financial aid formula excludes your home equity from its calculations. Like many words of financial aid wisdom garnered from one’s cousin, neighbor, or even the internet, this advice is based in some reality. Among these questionable pieces of advice is the common refrain that you ought to pay off your house in order to get more financial aid. ![]() There is a lot of advice flying around the rumor mill about ways to get more financial aid-some of it true, a lot of it false, and much based in kernels of truth. With college costs at an all-time high, it is no wonder that parents are looking for ways to increase their financial aid eligibility. I have also served as an active member of the Massachusetts Association of Student Financial Aid Administrator’s Early Awareness and Outreach Committee, coordinating early college awareness activities for middle school students as a trainer for the Department of Education’s National Training for Counselors and Mentors, educating high school guidance counselors on the financial aid process and as a volunteer for FAFSA Day Massachusetts, aiding students and parents with the completion of online financial aid applications.īy Shannon Vasconcelos, former financial aid officer at Tufts University How Home Equity and Other Assets Affect Financial Aid I was responsible for financial aid application review, grant awarding and loan processing, and college financing and debt management counseling for both pre- and post-doctoral dental students. At Tufts University, where I served as assistant director of financial aid, I developed expertise in the field of health professions financial aid. I began my career at Boston University, where I counseled students and their parents on the financial aid process and reviewed undergraduate financial aid applications. I came to College Coach with close to 10 years of experience in college financial aid offices. ![]()
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