<p>Can there be a negative number? For example, on the "Home equity (value of home minus what is owed on it)" part, my parents owe more money on the house than the house value right now. </p>
<p>On the EFC Calculator, I tried putting a negative number and just putting 0, and when I put the negative number, my EFC was actually higher than if I were to put 0. That didn't seem to make sense to me.</p>
<p>You can only put in 0.</p>
<p>Also … you cannot subtract their debt from other assets. Let’s say they have $30,000 in the bank but owe $50,000 more than the home is worth. They have to treat the home equity as 0 and report $30,000 in assets.</p>
<p>Oh really? So even if my parents owe $100,000 on a house because they bought it in 2007 and the house is now worth less than how much we owe, they don’t care? </p>
<p>Thanks for the clarification!</p>
<p>You cannot put a negative number. The lowest you can put is $0.</p>
<p>All this means is that you have no equity in your in your home.</p>
<p>The point of reporting assets is to find out if you have money you could spend for school. If there is equity in the house, then that equity is available for your parents to borrow against. If they owe more than the house is worth, there is no equity to borrow against. The fact that they owe money on it is not relevant … money that is owed (debt) is not considered in the FAFSA formula.</p>
<p>Okay, thank you. I understand it now.</p>