We are in the process of getting ready to put our house on the market and downsize to a smaller house with lower property taxes to reduce housing costs in preparation for the college years. Any pearls of wisdom on how this transaction might impact the FAFSA or need based aid?
If you have any of the proceeds from your home sale in your savings the day you file the FAFSA, that money will be treated as an asset.
Noted, @thumper1 we plan to immediately use the money for house #2. That’s my worry if we can’t find something immediately, that it is a FAFSA “ding”.
You can file the fafsa starting October 1 or so for the following school year. But that isn’t the deadline for filing…that is the opening date.
So…buy your new house before you file your FAFSA…and use the proceeds to do so.
Either that…or wait to sell the house until after October 1…file the fafsa…and THEN sell. You will then have almost a year to find a new house and spend the money.
But really…if your kiddo is applying to a college that uses only the FAFSA, the school doesn’t meet full need for all…unless it’s University of Chicago.
Also, your income is the primary driver in determining need based aid. If your income is sufficiently high…you might be worrying about this for financial aid reason.