<p>Hi. I'm a very low income student (8k/year) with a high home equity. My family's house is valued at around $400K, and there is no mortgage.</p>
<p>I'm aware that the EFC doesn't include home equity, but the CSS profile does. How do the Ivy League schools use home equity in their financial aid calculations?</p>
<p>I plan to do an individual search on their websites, but I was hoping for a general idea. Which of the Ivies and other top schools disregard home equity? Assuming acceptance, is there any chance I can get a full ride (room+board) at a top school?</p>
<p>Is this your parents’ home or are you living in someone else’s home (like grandparents’ home)? </p>
<p>It’s unusual for a family with such a low income to have a situation like yours…How do you pay property taxes, utilities, food, etc on $8k per year? </p>
<p>When income is unusually low, sometimes FA offices wonder how the family is able to cover basic living expenses.</p>
<p>Are both your parents living together in the same house with you or do you have noncustodial parents? Is this business income (including self-employment) and/or do your parents have other, untaxed income (like child support)? </p>
<p>The calculators suggest that, with a parent age of 40yo and 2 parents living at home, your parents may be asked to contribute $15K from the house value each year. However, ivy league schools vary in how they treat home equity. Some may cap because of the low family income so you should not rule out the ivys-- especially the most generous ones-- but you definitely need to have instate back-ups.</p>
<p>I think the school is going to wonder how a family of 3 or more people live on $8k per year…especially when there are property taxes, untilities, food, etc to pay.</p>
<p>Does only one of your parents work? Does he or she only work part-time?</p>
<p>We are able to survive, but we don’t have health insurance, heating, and some other stuff. My parents don’t want me to completely disclose our situation.</p>
<p>Thanks for the replies. They are very helpful.</p>
<p>That is understandable. However your situation is very unusual, most people with $400,000 in home equity have higher incomes. So, given that, be prepared that you may have a relatively large EFC and that you may need to explain your special situation to the FA people. I am sure there is a good explanation, however on the face of it looks strange. FA people may or may not buy into the explanation, hence have a financial safety in mind and do not bank on ivy’s alone.</p>
<p>EFC=Expected Family contribution. The federal govt. uses the FAFSA to determine EFC and based on the EFC you are eligible for Pell, Stafford subsided etc. Even for the unsubsidized Stafford, you need to fill the FAFSA.</p>
<p>Some institutions use FAFSA to calculate the EFC and this aid they give to students beyond what they are eligible from the federal govt. The Federal govt, gives only a limited amount. Let us say the COA is $50,000, EFC is $2000 and federal aid is $8000 (just making up numbers). The FAFSA Gap is $40,000 which the school has to help bridge.</p>
<p>Some schools may use the FAFSA to determine how much federal aid the student is eligible for, but calculate the EFC using CSS profile and institutional methodology. So the EFC the school comes up with may be different from the FAFSA methodology. </p>
<p>In other words, EFC can be calculated either using the Govt. Methodology (using FAFSA as the input capture document) or by a Institutional Methodology using CSS as the input capture document. Often, the schools have to both documents, one to determine federal aid (using FAFSA) and then to determine how much aid they want to give and how much the family should contribute.</p>
<p>Yeah, I knew EFC meant expected family contribution, just thought the term was mostly associated with the FAFSA for some reason. Wasn’t thinking :)</p>
<p>If they live some place expensive, have owned their home for a long time, and used to make more money, they could be in this situation.</p>
<p>My sister lives in a small CA town, she bought a house 20-25 years ago for $45,000, in 2006-07 houses there were going for $500,000. Yes, prices have gone down since then, but they sure are not less than $200-$300k. She would pay taxes, thanks to prop 13, based on the purchase value plus 1% a year. She had $500k in equity a couple of years ago, but she neither bought nor could afford a $500k home.</p>
<p>$8000 is not much income, though that could be AGI after self-employment deductions like HSA contribution, IRA, depreciation, etc. Or it could be a one time thing.</p>
<p>The thing is, if they sold their home and used that money for college, they could not afford a new place in their area, most likely.</p>
<p>Don’t the top CSS schools now have a cap on the percentage of equity factored into the formula, based on a percentage of income?</p>
<p>We live on Long Island. My husband paid $38,000 for our house. Actually he paid far less, but he added on, so we consider his total investment $38,000. It is probably worth $400 grand now. While we are not living on $8 grand, I am sure there are some long time locals in the area who might be.</p>
<p>So this scenario is not beyond the realm of possibility.</p>
<p>The school my YDD attends (Smith) did factor our home equity into what they expected us to pay. I have no idea what the percentage is, though. We are paying more than double our FAFSA EFC.</p>
<p>Just as somemom said, we couldn’t sell our house and use the equity either, but it is how the process is.</p>