Bargaining for Aid - Home Equity?

[tooby]

<p>I'm hoping a lot more people know about this than I do, so I figured I would make a post and see if anybody would respond.</p>

<p>Right now I have three schools, (Harvey Mudd, Carnegie Mellon, WashU) offering me around $12-14000 of financial aid based on need alone. All of these schools have estimated our expected family contribution to be at around $30000, something my family finds completely agreeable.</p>

<p>The fourth school, Duke, my number one choice is estimating our family contribution at around $36000, reason being our home equity. The thing is, I had a meeting with a financial aid counselor at WashU and within moments when i mentioned about not receiving enough money to attend ($3000 in aid), he decided that our home equity was throwing off our statistic and immediately increased it to $14000.</p>

<p>I guess what i'm hoping for is if you guys know why some colleges factor in home equity and some don't, and if there's anyway to get a similar amount of aid from all of them. Maybe some of you have experience with financial aid offices. I've sent an email to Duke and they said that home equity is part of their calculation. I hope i'm a different case altogether, since we live in such an expensive area where our house is one of the cheapest available. Anyway, please respond and tell me what to do. </p>

<p>Thank You.</p>

[angstridden]

<p>I think some colleges require a more detailed financial picture that includes home equity and others dont. I remember UNC was the only one we had to fill out an additional more detailed financial form for in addition to the FAFSA. The rest went with FAFSA and did not take our home equity into consideration.
So it is just one of those things..some do and some dont ask for and sadly for you Duke does.</p>

[tooby]

<p>Would there still be anyway to appeal and request equal money from 'all schools' -- if so, is there a strategy you would suggest for appealinng?</p>

[zagat]

<p>Home equity is equity. It dosn't matter where you live because the options are the same in any place--take a home equity loan or sell the house. Neither is a pretty option, but it's a college calculation reality. The idea is that your family could have a much less expensive home and have saved the cash as many families have. It's just one of the harsh realities of fa.</p>

[anxiousmom]

<p>You need to read some of the "negotiating for FA" threads. If Duke is your first-choice school but you can't attend due to the FA offered, you might want to call and tell them that, and tell them what WUSL has offered Perhaps they'll match WUSL - perhaps not. You won't know unless you ask. But read old threads so you get the wisdom of others who have done this before you.</p>

[MomOFour]

<p>Does anyone know how they calculate equity? We bought our home 10 years ago and the market value has increased significantly during that time. Do they look at the actual equity, money that you've paid towards the principle, or potential value, as in money which could be obtained via a second mortgage up to the current market value of your home? Is there a certain percentage of home equity which is protected?</p>

[curmudgeon]

<p>momoffour, as you probably know, all home equity is exempt under FAFSA. On Profile it is a school by school crapshoot. Some schools-Princeton for one, don't seem to tag you that hard. Duke does. At the most generous schools I believe the first @$130K of equity (FMV-sales costs -debt=equity) is ignored. At some it appears to start counting from dollar one. The profile form actually says (I'm paraphrasing)-don't use tax value, or appraised value, "what you could sell it for" is what they consider as Fair Market Value. Then they ask you when you bought it , and how much you paid for it. I understand that they do this to apply some appreciation formula known only to them to catch folks who artificially lower their equity figures.</p>

<p>For example. You purchase a home in 1987 for $150,000. Today in your high growth area you can sell it for $350,000. The balance on your note is $100,000. You have potentially $250,000 worth of home equity. (I would certainly deduct my est. sales costs from my estimated sales number before putting it on a form that doesn't allow me to deduct it.) That $250,000 at some Institutional Calc's I've looked at would probably generate an additional EFC of $7,500 to as high as $15,000 per year.</p>

[curmudgeon]

<p>Just to check my post I went to Dartmouth's estimator and plugged in some numbers w/o home equity and with $250k in home equity. The difference was $10,000. A year. $40,000 over four years.</p>

<p>But, on a positive note, Princeton's estimator excludes home equity in it's entirety.</p>

[MomOFour]

<p>Thank you curmudgeon. It's amazing how things can vary from school to school.</p>

[curmudgeon]

<p>MomOFour, it keeps me up at night, knowing that all I know for certain..... is that I don't know enough.</p>