<p>I am currently a sophomore in college, looking to transfer to USC for next Fall. At my current school I only had to file for FAFSA, so that is all I knew until recently. Since my parents don't make that much income, and are assets aren't quite through the roof, our FAFSA EFC comes out to be around $15,500. If I were to transfer to USC, I could expect to get a respectable amount of aid that would make going to my dream school affordable.</p>
<p>Unfortunately, however, we live in a part of Long Island where Real Estate has really taken off over the last 25 years or so (right after we moved in). Our home equity is over $600,000, which will inevitably drive up our Profile EFC. We haven't filed for the CSS Profile yet, but through the calculator on collegeboard.com estimations of the IM EFC come out to be $34,000 (more than double the FM EFC). So now with this new found information, I am slightly confused and heart broken.</p>
<p>When USC, or any other school for that matter, is calculating our financial need, which method will they use? IMHO, I think it is absolutely ridiculous if they strictly use the Profile EFC. I mean sure, our house does happen to be worth a lot of money. But, my parents won'ttake an equity against our house just to pay for one child's undergraduate education. So, if it is the IM EFC that is strictly used, is there any way to file for an appeal, trying to tell college admissions of my situation? All help would be greatly appreciated.</p>
<p>ReliantK, the colleges do not all apply the same formula to home equity, but almost all consider it -- so the best thing for you to do would be to contact the USC financial office and ask them specifically what formulaes they use; ask if there is a specific way they determine home valuation and whether they cap the amount of home equity considered in any way. </p>
<p>I know it is tough but the reality is that your parents could tap into the equity to help with financing your college education. If you do the math, you will see that the $18,500 increase to your EFC from consideration of home equity is only 3% of the total equity. Your parents may not want to borrow, but they are still in a much better position financially than someone who does not own a home -- and in your case they would only be looking at two years of funding rather than 4, since you are contemplating a junior year transfer. </p>
<p>You aren't going to get anywhere with an appeal, because everyone is in the same boat. I mean, why should they ignore your family's home equity when they are considering everyone else's?</p>
<p>If the school uses the Profile, they will consider home equity. There is no way around that. However, as pointed out above, schools have different amounts that they apply in the home equity department (one of the reasons that institutional aid varies so wildly even for "full need met" schools). An appeal based on your home equity is not going to get you anywhere as just about everyone who owns a home in a pricey area has the same issue. This is considered a choice your family will have to make...use the home equity or not. Just do the forms and see what happens.</p>
<p>SOME schools will limit the % of HE based on AGL, so no matter your equity, you would never pay more than a percentage of your income from your equity.</p>
<p>Others will limit the percentage of your HE based on criteria of their own.</p>
<p>You should call USC finaid and ask them how they do it.</p>
<p>"why should they ignore your family's home equity when they are considering everyone else's?"</p>
<p>The equity in anyone's home should not be relavant anywhere! Parent's should not find it necessary to use equity in their owns to find their children's education. A system that punish adults for something completely out of their hands (an inflated/ridiculously overpriced housing market) is absurd. Many of those people, including us, can only afford to live where they live because they purchased their homes years ago; they definitely couldn't not afford to purchase home now. Private education is overpriced and public education isn't much better.
Okay, I'm off my soapbox!</p>
<p>I believe (subject to correction) that the Profile is primarily employed by private schools. At those schools in particular need-based financial aid is a matter of grace, not entitlement. If one thinks that the final price quoted is too high (for whatever reason), then he should simply go somewhere else with a lower price.</p>
<p>A home often is a middle-class person's largest asset. So if they're looking at assets, that's going to figure in the equation.</p>
<p>I also don't see it as a punishment - after all, someone who lives in an area where housing prices went up has accrued a good deal of $ just because they happened to buy in a place and at a time when that happened.</p>
<p>Yes, to someone in a fly-over state where housing prices have not appreciated much, it seems quite ridiculous to complain that too much home equity is a hardship.</p>
<p>It also leaves the door open to hiding assets. You could take all your savings and buy an expensive house during senior year and claim you are "house poor" as you claim. Then after graduation sell it, and bingo all your savings are intact and someone else paid for your college education. It's tough all over, but having $600,000 in a nest egg, house or other, isn't terrible.</p>