<p>I have been checking out net price calculators. I noticed that some ask about how much you owe on your house and others do not. Does this have a large influence on financial aid? Would it be worthwhile to take out a mortgage or line of credit for say $80,000 to say I owe that amount with the idea that we will be using that money to pay for college anyway?</p>
<p>No because then you’d have $80,000 in cash that you’d have to report. On FAFSA this would be particularly ill-advised because it would increase your EFC by $4480. For Profile schools, some consider home equity while others don’t. Some Profile schools cap home equity at some percentage of income, so if your income is $100K and your home equity is $500K, the increase to your Profile EFC due to your net equity might be very little.</p>
<p>Set up a line of credit if you think you’ll need one, but don’t tap into those funds until you understand their effect on financial aid by running the NPC for the schools that your son/daughter is considering.</p>
<p>It can depend on the situation. If you owe a lot of money on other things, it might be a good idea to consolidate your loans and use a HELOC to pay them off. Financial aid calculators do not take into account how much debt you have unless it is against your house. For PROFILE you have to report the value of your home less any liens against it. But as Vballmom explains, most schools cap home equity, I believe 2.5 X income is the usual cap.</p>
<p>I could be wrong, but I thought colleges used varying percentages of your home equity in calculating need based aid. I didn’t think it had anything to do with your actual income…but rather was a percentage of the actual equity.</p>
<p>As noted, however, some colleges don’t count any home equity, and many others a small %age of it.</p>
<p>Stanford is one university that caps the amount of home equity considered at 1.2 times the total family income.</p>
<p>There was a thread a while ago that had a list of colleges that people had researched and indicated the various ways they used the home equity value.</p>
<p>"There was a thread a while ago that had a list of colleges that people had researched and indicated the various ways they used the home equity value. "</p>
<p>Can anyone provide a link to this thread? I can’t find it. Additionally, does anyone know if home equity works differently for Canadian applicants? Many of the fee calculators only calculate for US citizens, and you can’t get far enough along in them to see where home ownership figures (eg. some of them require a zip code before you can proceed).</p>
<p>Thanks loads.</p>
<p>Never mind… found it!</p>
<p><a href=“http://talk.collegeconfidential.com/12366614-post102.html[/url]”>http://talk.collegeconfidential.com/12366614-post102.html</a></p>