Prior prior is only for earnings and taxes. You can still prepay bills and reduce assets on the day you fill out the FAFSA
Who knows? Is this a situation that you potentially face? If not, why worry about it?
Are there folks with VERY expensive and fully paid for homes who are seeking need based aid? Maybe.
Are there a lot of them? Probably not.
From what I understand retirement accounts aren’t considered so people can have an expensive house and retire with essentially no income and beat the system. My son has a friend whose family lives in a house that exceeds $500K, both parents are retired but not close to retirement age and he will be going to UVA from OOS for $1K a year. These are upper middle class people that could afford to fully pay. He also applied earlier through Questbridge but got denied for that.
I found this thread while searching for info about the effect my home equity will have on aid. The link to the home equity spreadsheet is very helpful…
There are situations where a recent cash home purchase is not done to increase financial aid. I was unexpectedly widowed a few years ago, received a life insurance payout and last year paid cash for the least expensive condo I could find.
I had been a stay at home mom for 10 years and had tremendous difficulty finding a job that paid a living wage. I could not afford the mortgage on our no-equity house, nor could I afford rent at 70% of my income. I couldn’t qualify for even a small mortgage, due to my income, so I paid cash to keep a roof over our heads. I also won’t qualify for a home equity loan or line of credit to pay for college and if I sell - where will we live? I put some money aside for school but will certainly need quite a bit of aid or merit money or both for my kiddo to leave home for school. If not, she’ll commute.
I’m willing to bet there are more people in circumstances like mine than people who buy million dollar homes to qualify for financial aid.