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gstharr
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I am gearig up for the admission process for my first and only.  All of the schools that he is conisdering use CSS.  One thing that comes to mind is how a paid off house with high equity (but average value for So Cal) is treated.  Any tips, tricks or traps that I should be aware of. Thanks

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I'm no financial aid expert, but having bought our house a long time ago in a market that was undervalued and since went bonkers, I was VERY concerned about this. We do have a mortgage still, but we have so much equity. Of course, there's no way to tap that without moving or taking on debt. It did not seem to overly affect our EFC. But... we weren't super low EFC to start with? But my kid is receiving need based aid. SO... I think it's going to depend on the whole context. No way to know without doing some net price calculators first and calling financial aid offices.

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We’re in the same situation, and I noticed with some schools, equity is not considered in the NPC but income would have to be under a certain amount. I haven’t started the CSS or the FAFSA yet. My friend went through this last year though with very high income and no mortgage (half of the equity is hers, the other is non-relative partner) in a high COL city with a zip code that is not the most desirable. A top LAC wouldn’t reduce the tuition even though it does not consider equity if income is below an amount that seems very high to me. Their combined income from what I’ve gathered is beyond $300k below $450k.

 

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my understanding is that MOST schools cap how much home equity they consider in their formulas...usually it's something like 2x income. There are also schools that don't consider home equity at all. And then there are schools that are notorious for hitting it really hard (Boston College, I think? or maybe it's BU. One of those). And schools aren't very transparent about their CSS formulas, so you pretty much have to run NPCs. We also have a lot of home equity (from buying when the market crashed), and we've gotten good FA for 2 kids now...but there was a lot of variation in FA packages with my first that may or may not have had a lot to do with home equity. 

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1 hour ago, crazyforlatin said:

We’re in the same situation, and I noticed with some schools, equity is not considered in the NPC but income would have to be under a certain amount. I haven’t started the CSS or the FAFSA yet. My friend went through this last year though with very high income and no mortgage (half of the equity is hers, the other is non-relative partner) in a high COL city with a zip code that is not the most desirable. A top LAC wouldn’t reduce the tuition even though it does not consider equity if income is below an amount that seems very high to me. Their combined income from what I’ve gathered is beyond $300k below $450k.

 

I wonder what is the income level where FAFSA no longer makes sense? $150K? $200K? I am guessing anybody making $200K would be full pay. Am I wrong? 

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All I know is that our EC almost double this year because of the rise in value of our real estate (we live in church provided housing. The fair market rental value counts as income.)  It was quite a shock.  Fortunately our present student's aid is/was mostly scholarship so it only impacted a few areas.  I have another one applying this year, so we will see for next year. 

@Roadrunner I would guess full pay is going to happen at a lower salary than $200,000.

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If you look at Pomona College NPC, they mention for under $250k, equity is not considered. I didn’t play around with the income input, but it sounds like not full pay for this college until you surpass that amount. But I can’t imagine that much of aid given for $235k. Too bad the acceptance rate is so low because it’s the perfect school for Dd. Or any of the other 5Cs.

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1 minute ago, crazyforlatin said:

If you look at Pomona College NPC, they mention for under $250k, equity is not considered. I didn’t play around with the income input, but it sounds like not full pay for this college until you surpass that amount. But I can’t imagine that much of aid given for $235k. Too bad the acceptance rate is so low because it’s the perfect school for Dd. Or any of the other 5Cs.

Yes, I think need based schools are for super rich and super poor and those willing to swim in debt. 😢

 

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32 minutes ago, Roadrunner said:

Yes, I think need based schools are for super rich and super poor and those willing to swim in debt. 😢

 

Not all. That’s true of the very selective schools, but we were surprised that Dickinson was throwing money at dd. She was a strong candidate for sure, but not one of those superstar building nuclear reactor types. You never know. Like I’ve said before, try to hold things lightly. 

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1 hour ago, freesia said:

Not all. That’s true of the very selective schools, but we were surprised that Dickinson was throwing money at dd. She was a strong candidate for sure, but not one of those superstar building nuclear reactor types. You never know. Like I’ve said before, try to hold things lightly. 

It’s it because they give merit scholarships? We are most definitely looking at schools that give merit.

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1 hour ago, Roadrunner said:

It’s it because they give merit scholarships? We are most definitely looking at schools that give merit.

I can’t remember all the details. I don’t think they give Merit. She got an English department scholarship, some regular aid, loan. The English department scholarship is what I think made the difference. Usually that’s part of what makes up the regular aid, but this was in addition to it so it brought the cost under our EFC. You just never know I guess. 

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4 minutes ago, freesia said:

I can’t remember all the details. I don’t think they give Merit. She got an English department scholarship, some regular aid, loan. The English department scholarship is what I think made the difference. Usually that’s part of what makes up the regular aid, but this was in addition to it so it brought the cost under our EFC. You just never know I guess. 

That’s merit.

 

Some schools only give scholarships based on income. Departmental scholarship would be merit. 

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1 minute ago, Roadrunner said:

That’s merit.

 

Some schools only give scholarships based on income. Departmental scholarship would be merit. 

Yes, but the schools that say they don’t give merit call them departmental scholarships. 

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This article is a few yrs old, but you might find it helpful:

Will Your Home Equity Hurt Financial Aid Chances? (thecollegesolution.com)

Have you run individual schools' net price calculator?  I'd spend time running each one for schools being considered.  Don't do them haphazardly.  Have your taxes, home value, investment portfolio info, etc all available and fill them out as accurately as possible. That is the easiest way to get a general idea of costs.

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Yes, the equity in your paid off house counts as an asset on the CSS. If all your child's schools use the CSS, make sure you have admissions and financial safeties on the final list. FAFSA does not consider home equity.

Paula Bishop keeps a list of colleges and how much home equity they will consider here https://drive.google.com/file/d/1yeV1c6OPmGj1mggmnwH8dfdbP3OCDzM5/view

Running the net price calculators on all the college financial aid websites is a must-do.

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