If I pursue a graduate degree over the next 3 years while my son is in high school and incur debt to do it, how does that debt impact my son’s status for financial aid in 4 years if at all?
Would he be in a better osition for more aid if I take out a college loan or if I take a 2nd mortgage?
Your debt won’t have any bearing on your son’s financial aid.
Thanks. Isn’t the value of your house a factor?
For FAFSA purposes, the value of a primary residence has zero factor. For most schools that use Profile to calculate institutional need-based aid, the equity held in a primary residence is a factor.
Primary home and equity aren’t reported on FAFSA (second homes are).
Value of primary homes are reported on CSS Profile, but only some schools include a portion of the equity in their proprietary calculation of need.
What is CSS profile?
Most private schools require CSS Profile from students applying for financial aid. It asks for much more financial detail than FAFSA. Each school has their own proprietary formula for calculated need based aid on the info from CSS Profile.
Most public schools use FAFSA only to determine need, but most schools that use FAFSA only do not meet full need.
So do not think of your FAFSA EFC as what you will pay at one of those schools, in general you will be expected to pay more than your EFC, sometimes significantly so. When schools do this, it is called ‘gapping’.
Make sure to run the net price calculators at all schools your kid is considering. Many are highly accurate, unless you are divorced, own a business, or have real estate beyond a primary home.
Bill Marsh…maybe someone else will be able to tag you for responses.
How much do you think you will be able to pay for college when the time comes for those bills to be paid? That is the single most important question you need to ask now.
As noted, your college debt won’t factor into your child’s need based aid at all. But It very much could factor in to your cash flow and ability to pay for college.
It sounds like your kid is finishing his freshman year in high school.
Your family budget for his college costs will need to also factor in your loan repayments.
Thanks, everyone. Much appreciated.