<p>I am learning that the Profile application will ask about home equity. All things being equal (yeah, right!),which family is more likely to get financial aid: the family with $60,000 of equity in thier home vs. a family that has essentially no equity in the home (not upside down) because they refinanced a couple of years before child entered college and used the money for solid, non-frivolous reasons (to take advantage of lower interest rates, pay down other debts that charged higher interest than the mortgage, make necessary home repairs etc). Would the Profile folks look askance at the family who refinanced and wonder why they didn't wait to refinance so they could use that money toward college? </p>
<p>Thanks to everyone who knows about such things and can share your knowledge...</p>
<p>The answer is: it depends. With so many families having lost significant equity in their homes in the past couple of years, colleges may be rethinking how much they weight equity. Here’s one data point from Stanford.</p>
<p>Remember, the Profile form simply collects income and asset information; it’s up to each individual college to decide how that information will be used.</p>
<p>The thing about home equity is that the CSS Profile asks for that information, but it doesn’t determine how any given college will use it. Some schools don’t even factor in home equity for lower income students, some use a formula where it is partially added in as an asset. Some will consider the whole amount an asset. It really depends on the college’s own policy.</p>
<p>I don’t believe they will care about refinancing from past years. That’s beyond the scope of FA calculations. They are looking at your financial situation as of the past year.</p>
<p>I don’t know that a school will disregard it if they normally count home equity. It may, however, fall under the asset protection allowance if it’s a 2-parent household. (The asset protection allowance for single parent households is very low.)</p>