If you own a home, or maybe a couple of homes, one of your major concerns is likely to be whether or not your home equity will affect your child’s eligibility for financial aid. So here’s what you need to know about equity and its impact on financial aid.
Not All Colleges Are Interested In Your Equity
The good news is that most colleges in the US—almost 90%—award financial aid to students regardless of their parents’ home equity. You do not even have to report home equity as an asset on the FAFSA so if your child is applying to a school that awards financial aid based only on the information submitted through the FAFSA, there’s no question of your home equity having any effect on the financial aid awarded.
Home Equity Impacts Financial Aid In About 400 Colleges
Home equity will have an impact on financial aid only if your child is applying to any of the 400 colleges and universities that require you to submit the CSS Profile.
The CSS or College Scholarship Service Profile is an online application administered by the College Board. This form requires you to provide detailed information regarding the total value of home equity, stocks and other assets that you own.
After you fill the CSS form, it is sent out to profile colleges that you have applied to. These colleges then use this financial information to determine the type and amount of institutional funding that can be allotted to you.
Although every profile college will process the information on the CSS Profile differently and also calculate your financial aid differently, they will almost certainly include your equity as an asset in the calculation.
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