<p>Looking at various posts about home equity, is there some kind of home equity allowance provided on the CSS profile? For instance, we only have about $50K in home equity, no other assets, AGI of about $40K, and my husband will reach retirement age this year. If the $50K in home equity is all we have, will schools expect us to take out a home equity loan? We can't afford to do this, as we already did this a few years ago for home improvements, and also have about $20K in revolving credit, mostly due to my husband's open heart surgery last year when he was unable to work (self-employed). I'm getting frantic about FA for our junior D when she applies to colleges next fall. She has great stats and ECs, but I'm very concerned we won't get the aid we need. Thanks to anyone who has any ideas.</p>
<p>Don't panic.</p>
<p>Go to here:</p>
<p>and fill out the financial aid calculator.</p>
<p>My understanding is there is some amount of asset protection for home equity and other assets that are not considered to be available to fund a college education. The formulas also take into account how close to retirement you are, and ability to make money in the future to pay back loans. If you are close to retirement, that potential is lower than for someone younger.</p>
<p>Some schools use the institutional methodology that may take into account home equity. But again, there is usually some protection. I know we filled out forms for some schools that asked about home equity, but not on the primary residence...they are trying to figure out if you have assets in a second home, which I think is viewed as a funding source for college. But not the primary home so much or at all (unless you have a ton of home equity).</p>
<p>Schools also take into account extraordinary circumanstances, such as medical bills.</p>
<p>Based on the information you provided, I would be surprised if your EFC was as high as $5,000 per year, and probably much lower than that. Your D would be expected to take out student loans, but if accepted to a school that covers 100% of financial need, it is likely the family contribution would be relatively small.</p>
<p>Your situation is very similiar to ours this year ( even the home equity ) . I would tweak your numbers experimenting with the calculator at <a href="http://www.finaid.com%5B/url%5D">www.finaid.com</a> . Compare the difference between Institutional Methodology ( which is for schools that require the PROFILE form thats due in Oct 2006 ) and the Federal Methodology - FAFSA form ( all schools require this one and it is due by the following year ) . PROFILE is filled out for many 100% needs met schools .</p>
<p>personal debt, i.e., credit card debt, are not a factor in the FinAid calculations. Thus, if you can take a home equity line to payoff that 'revolving credit', you would be better positioned, IMO.</p>