My son is a junior in high school, and I also have kids in 7th and 9th grade.
I heard recently that college financial aid departments and/or the FAFSA don't take into account debt in calculating the Expected Family Contribution, but they do look at home equity. I'm not sure if this is accurate or not.
We have a low mortgage, owing only $97,000 on a home worth about $350,000. We have a home equity line of $40,000 which is currently paid off - we draw upon that as needed, but like to use it as a cushion, because my income varies enormously month-to-month and year-to-year.
We presently have $80,000 in credit card debt, presently all at about 3% to 4% interest (we use those discount offers on a calculated basis, and have never gotten trapped).
Will colleges consider this credit card debt when calculating financial aid, or am I better off refinancing our house, paying off the credit cards, and reducing our net home equity, to make us essentially look poorer to the colleges?
For a variety of reasons I don't have time to go into here, we are better off not refinancing unless it will help us with college financial aid.