Will Your Home Equity Hurt Financial Aid Chances? Have you given any thought to how home equity might hurt your child’s chances for financial aid?
Luckily, at most state and private colleges and universities, the equity in your primary home is a non-issue.
That’s because most schools only require families to complete the FAFSA (Free Application for Federal Student Aid) when applying for financial aid, which doesn’t even ask about your home equity.
There are just over 200 schools, however, that are quite interested in the value of your house and how these institutions treat home equity varies dramatically.
The schools in this category (nearly all private) include the nation’s most prestigious institutions. These colleges use an additional financial aid form called the CSS Profile.
Depending on how schools treat your home equity, your chances of getting financial aid could blow up while at other institutions your odds wouldn’t be jeopardized even if you are living in an exclusive zip code.
How Your House Can Impact Financial Aid
Many schools that assess home equity for financial aid purposes do so by linking it to the family’s income. For instance, a school might assess home equity at no more than two times the family’s income. Let’s look at an example of how this would work:
Family’s income: $60,000 Home equity: $400,000
Normally, the schools that use the PROFILE formula would assess the home equity (as well as other parental assets) at 5% for financial aid purposes.
400,000 x 5% = $20,000
In this example, the home equity value would have boosted the expected family contribution (EFC) by $20,000 (a significant hit!) if the school didn’t link the home equity to income. Put another way, the home equity would have decreased a student’s chances for financial aid by $20,000.
By the way, if you don’t know what an EFC is, read this post:
But now let’s look at what happens when the school ties the home equity assessment to no more than two times the family’s income of $60,000.
$60,000 x 2= $120,000
In this example, the school would only use $120,000 of home equity this family’s aid calculation.
120,000 x 5% = $6,000
So in this example, the parent’s EFC would rise $6,000 rather than $20,000.
How Individual Schools Treat Home Equity
If you hope to qualify for financial aid — and the more expensive the school the more likely you will – it’s important to know how individual schools treat home equity. To help you with this effort, I am sharing with you the following spreadsheet of the home-equity policies of more than 100 colleges:
The spreadsheet comes courtesy of Paula Bishop, a friend of mine, who is a CPA in Bellevue, WA, and a financial aid expert. She contacted the schools about their home equity policies this summer, but keep in mind that schools can change how they assess home equity at any time so don’t just depend on this list.
Schools that Ignore Home Equity
As you’ll see from the list, some PROFILE schools don’t consider home equity at all, which is obviously the best scenario. Institutions in this smallest category include:
Bard College California Institute of Technology Cooper Union DePauw University George Washington University Hamilton College Harvard University Massachusetts Institute of Technology Princeton University University of Chicago University of Virginia Ursinus College Whitman College Schools That Hit Home Equity Hard
On the other extreme, some schools use the full weight of parents’ home equity to help determine financial need, which can seriously hurt aid changes. Here are some examples:
American University Babson College Bentley College Boston College Emory University Holy Cross College Lehigh University Loyola University Maryland Northeastern University Sarah Lawrence College Tulane University
Some schools that take this draconian approach will consider parent appeals, but how many families even know this is a possibility? In fact, parents typically won’t even know why their aid packages seems so paltry.
It’s highly unlikely that parents are going to trace a poor award back to their home equity. But now everyone reading this knows this is a possibility and can appeal.
Schools That Limit Home Equity Hit
Other institutions use a home-equity cap that’s tied to the family income so it’s less likely that someone who is house rich, but cash poor will be penalized. The home-equity caps below range from 1% to 4%, which is a huge span.
Here are a few schools in this category:
Amherst College (1.2x) Barnard College (1.2x) Bucknell Univesity (2x) Cornell University (1.2x) Dartmouth College (1.2x) Emerson College (3x) Haverford College (1.2x) Kenyon College (4x) Lewis and Clark College (2x) Rice University (2x) Tufts University (2x) University of Rochester (3x) Vanderbilt University (2.4x) Wake Forest University (2x) Washington University, St. Louis (2.2x)
以加州为例，中间收入是7万7， 扣掉税， 算6万。加大的多数校园，学费加生活费用4万多。
对中间收入的家庭， 可能有一些资助（资助中的贷款不算资助）。算自己付3万。
你来说说： 一个净收入6万的家庭，付3万大学学费， 这还不贵？
七万七的收入，房子上20万的equity，你的EFC大约两万不到。。。另外，这种情况尽量申请有钱的私校，可能连生活费都包了，当然要算好，把税表上的收入压到65000以下。。。
私校就更有可能一个子不掏或掏很少。
7万7估计最多出食宿费
如果不提前存钱的话
七万七很多地方拿不到钱
大部分还是住在家里，吃住父母承担，贷款然后打工，一年赚个一万款就过得去了，GameStop干这个活得很多大学生啊，这点多活一年能帮不少大学生呢
干脆他们之上HP，给钱最多
除了學費和住宿餐費 學校可能把旅費 書費 零花費都算進去 COA
COA-EFC就是FA的數目
大多数娃不愿去CC，边打工边上学的娃到处都是
雖然CSS會問 但不代表大學就把這個當資產用5.6%來算了
公立不算房子上的equity，别担心。很多私校也不算。去学校网站算，自己有把握，也不会耽误了自己的孩子。。。
Will Your Home Equity Hurt Financial Aid Chances? Have you given any thought to how home equity might hurt your child’s chances for financial aid?Luckily, at most state and private colleges and universities, the equity in your primary home is a non-issue.
That’s because most schools only require families to complete the FAFSA (Free Application for Federal Student Aid) when applying for financial aid, which doesn’t even ask about your home equity.
There are just over 200 schools, however, that are quite interested in the value of your house and how these institutions treat home equity varies dramatically.
The schools in this category (nearly all private) include the nation’s most prestigious institutions. These colleges use an additional financial aid form called the CSS Profile.
Depending on how schools treat your home equity, your chances of getting financial aid could blow up while at other institutions your
odds wouldn’t be jeopardized even if you are living in an exclusive zip code.
How Your House Can Impact Financial AidMany schools that assess home equity for financial aid purposes do so by linking it to the family’s income. For instance, a school might assess home equity at no more than two times the family’s income. Let’s look at an example of how this would work:
Family’s income: $60,000 Home equity: $400,000Normally, the schools that use the PROFILE formula would assess the home equity (as well as other parental assets) at 5% for financial aid purposes.
400,000 x 5% = $20,000In this example, the home equity value would have boosted the expected family contribution (EFC) by $20,000 (a significant hit!) if the school didn’t link the home equity to income. Put another way, the home equity would have decreased a student’s chances for financial aid by $20,000.
By the way, if you don’t know what an EFC is, read this post:
Do You Know What Your EFC IS?But now let’s look at what happens when the school ties the home equity assessment to no more than two times the family’s income of $60,000.
$60,000 x 2= $120,000In this example, the school would only use $120,000 of home equity this family’s aid calculation.
120,000 x 5% = $6,000So in this example, the parent’s EFC would rise $6,000 rather than $20,000.
How Individual Schools Treat Home EquityIf you hope to qualify for financial aid — and the more expensive the school the more likely you will – it’s important to know how individual schools treat home equity. To help you with this effort, I am sharing with you the following spreadsheet of the home-equity policies of more than 100 colleges:
Home Equity SpreadsheetThe spreadsheet comes courtesy of Paula Bishop, a friend of mine, who is a CPA in Bellevue, WA, and a financial aid expert. She contacted the schools about their home equity policies this summer, but keep in mind that schools can change how they assess home equity at any time so don’t just depend on this list.
Schools that Ignore Home EquityAs you’ll see from the list, some PROFILE schools don’t consider home equity at all, which is obviously the best scenario. Institutions in this smallest category include:
Bard College California Institute of Technology Cooper Union DePauw University George Washington University Hamilton College Harvard University Massachusetts Institute of Technology Princeton University University of Chicago University of Virginia Ursinus College Whitman College Schools That Hit Home Equity HardOn the other extreme, some schools use the full weight of parents’ home equity to help determine financial need, which can seriously hurt aid changes. Here are some examples:
American University Babson College Bentley College Boston College Emory University Holy Cross College Lehigh University Loyola University Maryland Northeastern University Sarah Lawrence College Tulane UniversitySome schools that take this draconian approach will consider parent appeals, but how many families even know this is a possibility? In fact, parents typically won’t even know why their aid packages seems so paltry.
It’s highly unlikely that parents are going to trace a poor award back to their home equity. But now everyone reading this knows this is a possibility and can appeal.
Schools That Limit Home Equity HitOther institutions use a home-equity cap that’s tied to the family income so it’s less likely that someone who is house rich, but cash poor will be penalized. The home-equity caps below range from 1% to 4%, which is a huge span.
Here are a few schools in this category:
Amherst College (1.2x) Barnard College (1.2x) Bucknell Univesity (2x) Cornell University (1.2x) Dartmouth College (1.2x) Emerson College (3x) Haverford College (1.2x) Kenyon College (4x) Lewis and Clark College (2x) Rice University (2x) Tufts University (2x) University of Rochester (3x) Vanderbilt University (2.4x) Wake Forest University (2x) Washington University, St. Louis (2.2x)大部分紫檀的學校都是cap或不計 所以也影響不大了