<p>We are a moderate income/house rich family. Our paid-for house appreciated over the years (as have our taxes!) and our equity is up there. My husband and I had good jobs before the last recession but now make 1/3 of what we did before. </p>
<p>Our home equity jacked up our Profile EFC which is substantially higher than the FAFSA EFC. I presume that the assumption is that we can borrow against our home equity. The problem would be paying it back on our current income. </p>
<p>We don't really have grounds for a formal appeal: No divorces, medical issues, one-time bonuses, mistakes on forms, etc. At the same time, we believe our Profile EFC is not an accurate reflection of our family's financial status. </p>
<p>Do we have reasonable grounds to ask for reconsideration? Any suggestions on how to position our request? Thanks!</p>
<p>I would explain about how the equity of your house doesn't reflect your situation anymore, talk about how on your income the sort of debt from borrowing on it would be unreasonable. If you just talk to them they will try to help you.</p>
<p>Equity still represents wealth. It's your choice to have your money in your home or to move to a less expensive home and pay for college, so no, I don't think it will wash.</p>
<p>they probalby also will consider that money that could be going towards a mortgage- should be going for tuition.
We found that even if you put aside money for retirement- that they figured that that money was available for tuition instead.</p>
<p>Boxmaker, you can always ask; they will not take away the admissions acceptance. But bear in mind there are families living in small apartments, lousy areas, substandard housing with similar or less incomes. How fair is it that your house gets subsidized by financial aid? If you have other outstanding debt, taking a loan out against the house is the smart thing to do, and pay of that debt with the home equity since profile does not take the debt into consideration. Also it MAY be wise to borrow against the home equity and put as much as you can in ROTH iras that can pay the tuition, and investing in collectibles for now if you have knowledge of that area with the income you save in putting in for your retirement. If you know someone who is savvy in the area, there may be some good legal venues to take. I hesitate to suggest because of risks and special situations.</p>
<p>Jamimom -- I believe you missed my point. Our house was paid off when my husband and I had good jobs. We both were unempolyed for a few years and each of us now have jobs that bring in about 30% of what we used to. Our problem with borrowing against our home is that we could not afford to repay the loan with our present income. We are able to make ends meet precisely because we do not have any debt.</p>
<p>I suppose we theoretically could sell our home to pay for college. But then we would simply have a huge asset that would eliminate any need for aid. We, too, could live in a small apartment, lousy area or substandard housing.... </p>
<p>We are not looking (as you put it) for anyone to subsidize our house. We were asking whether it is reasonable for a financial aid committee to consider that being house-rich is not an accurate reflection of our financial status since we have a modest income.</p>
<p>I understand exactly what you are saying. But what I am trying to say is that your house is an asset. If you have to do so, you CAN sell it. If financial aid exempted house values, everyone would pay off their houses or invest in their residence so they can shelter their money that way. Some of the top schools do give a certain house allowance for the primary residence, so there is some recognition of your situation in the financial aid world. But just think for a moment of how one can take advantage of a primary residence exemption? And by allowing you and any other who has assets tied up in a house, land , or other real estate, it is penalizing those who have their assets elsewhere. The whole idea is that you can sell your house and use the money to pay for college. Someone without such a house cannot. For example, I live in a house but it is mortgaged to the hilt so selling it isn't going to bring in any assets. I used to live in lousy areas, substandard housing, bad school districts because that was what I could afford. Someone who had a great job several years ago and paid it off, would have that asset that I did not have as we did not have that great job to put the money into a house. So a paid off house is an asset according to most schools. Now schools that just use FAFSA will not look at your home equity. And if you have other debts, you could pay them off with a home equity loan which would reduce the value of your house. Assets are assessed at 5.6% over a certain allowance, so a $100K house is assessed about $5600 by financial aid. That means for such a house, you need to come up with $22400 over 4 years in college payments because of this asset just the same as if someone who has that money , $100K, sitting in a bank. But you are still better off than that person, because he would be paying rent or mortgage and you are not--so you win out that way, as payment for where you live are not taken into consideration. So to give you even more additional consideration than the guy who does not have his money in a house but sitting in the bank is indirectly subsidizing you.</p>
<p>If we mortgaged our house to the hilt ( which has appreciated 5x since we bought it 20 years ago- we haven't done anything to it- the roof is even 20 years old- but housing prices are crazy), we could not afford the monthly payment. It is our only asset- unless you count the $50 in savings bonds that my H work pressures him to buy every month. It is also our main expense- zero credit card debt- we can't afford to charge things we either pay cash or don't buy it. So that means we haven't had new furniture for 20 years- we don't go on vacations and we aren't in the situation of my sister who refinanced her house to take lots of money out- bought two new cars- extensive remodeling-new furniture- big vacations- but now they have low equity & get lots of financial aid. We couldn't do that because we don't have the income to make the increased payments.
I expect boxmaker is in the same position. Sure they could sell the house- but they wouldn't be able to buy anything similar without getting a big mortgage that they couldn't afford.
I don't see how we could get a smaller house- our house for our family of four is already less than 1000sq ft with 2 bed/1bath. I have no idea where we could move to unless it was so far that all our commuting expenses ate up any savings. sucks to be us I guess- but at least I only have two kids to worry about and my sister has five!!</p>