<p>I have a child who is a recruited athlete to a public in state D1 school (but no scholarship). Has been accepted to an in state private too and awarded an automatic scholarship on his stats and he is able to apply for others.</p>
<p>I am a single parent, low income and children get reduced lunch. EFC will be 0 based on simplified means test.</p>
<p>When I purchased my house I knew that I needed to have the mortgage paid off to help my child with college costs next year. I still owe $8000 but have that in savings (was planning on using them for college though). My monthly expenses are more than my income. Should I pay off the mortgage? I know that FAFSA will not look at the assets but we are going to need to file CSS for the private school. To be honest I really don't think this school will be affordable. They are not known for large amounts of merit aid.</p>
<p>I am thinking that the fact the mortgage is so small it will make no difference to CSS whether I have it or not. Paying it off will give me peace of mind and allow me to live within my means....at least until he starts school!</p>
<p>You need to check the policy of the Profile school with regards to how they treat home equity. If your house is completely paid off, you have a large amount of equity in that house, and some schools do consider that in their need based aid equation.</p>
<p>PROFILE schools do not do things in unison other tthan the 568 group who use a standard formula, but even within that group, if there is some situation that can be subject to professional judgement. the awards will differ</p>
<p>Colleges include the value of a primary home in different ways. Some don’t count it at all. Some max out the value to 1.2X or 2.4X your AGI (income as reported on your tax return used to calculate taxes), or other figure. Some take the full value. So you should ask the Financial aid office of this school how what they do with the Home Value. Also how do they expect it to be calculated. This value is not listing value, but how much you would NET if you needed to sell your house in the next 6 months or so. Some may want you to use Zillow or other home valuation calculator. </p>
<p>Be aware that though your EFC through FAFSA may be zero, most schools do have a student contribution that they have as a base before they even calculate what the parent shoud pay. and that assets over a threshhold (usually $50K) and income over $30K can generate a required parental contribution.</p>
<p>THe formula most PROFILE schools use, is that they take your total assets, including that house value unless they are a school that specifically excludes it and anything over $50K gets hit up 5%. </p>
<p>If you are living in very tight circumstances, paying off your mortgage may not be the best thing to do, as you may not be able to get that money back or any money if any emergency occurs. Home Equity loans are subject to market conditions and they are not automatic.</p>
<p>Be especially aware that if your son has money in an account, that can be hit up at even more than the 20% from the FAFSA calculations–I’ve seen as high as 35%, so he should pay you expenses and make sure he is at zero since the parent has some asset protection and is hit only 5% on the assets most time. He can reimburse you for his expenses this year. Open an account with him with your name and ssn as primary and have his money in there, so it doesn’t cause isssues on the day you complete aid forms.</p>