<p>So you sell your house for a $300K gain; no taxes due.</p>
<p>You put that $300K into an $800K house; your new mortgage is $500K.</p>
<p>There’s no net difference between the 2 scenarios with respect to financial aid. You have an asset (your house) that has a net equity of $300K. It’s either a protected asset (for FAFSA-only schools) or a non-protected asset (for Profile schools). Either way, it doesn’t make a difference. Your EFC hasn’t changed. You end up with a larger mortgage payment, but your mortgage payment isn’t reported on FAFSA or Profile so there’s no benefit to you with respect to the financial aid formulas for taking on this additional debt.</p>