I recently went through the net price calculator of several of my top schools that are suppose to meet 100% of demonstrated need. However, when I looked at the cost of Brandeis, I saw that it was proportionally much larger than the other schools that I was looking at. It was about 25k which to me is impossible to pay.
My mom is a widow and makes only about $40,000 for a family of 5. After looking at why the amount is so high, I found that Brandeis calculates home equity at a high rate. The home is valued at around $350,000, but was bought almost 25 years ago at less than $150,000.
Is there anyway to counter this after receiving a financial aid package? Also, is it possible that they would take in account how long ago my parents bought their house?
Something isn’t right. If your mom only has $40,000 in income…your family contribution should not be $25,000.
Is the house fully paid for?
The house is fully paid for; it was bought over 20 years ago.
Those numbers are right. If the house is paid for, and if the school doesn’t cap home equity as a multiplier of income, that is possible. (At 5.xx% of parental savings, it works out to more than $20k a year) If admitted, and if they process your aid that way, I’d certainly try to appeal but there are no guarantees. (We ran into this too, although not quite so badly)
Schools promise to meet 100% of demonstrated need as they define it. Some will ignore home equity completely (e.g. HYP), while others will cap home equity at a certain multiple of income. Brandeis’s formula appears to not cap home equity or have a high multiplier, so that’s why you get a high family contribution. Other selective schools like Brown, Northwestern, Pomona, and Boston College also have similar formulas as well.
@MidwestMomTo2 How did your family deal with this? Were you able to appeal your financial aid for more money? I know that schools that only use the FAFSA won’t take into account home value; however my state schools were the only ones that did not require the CSS.
Any advice from people who had a similar situation?
Some Profile,schools cap home equity at a %age of income. Some Profile schools don’t count home equity at all. Some are like Brandeis…and count it heavily.
If the school’s policy is to tap home equity at a very high rate…why would,they alter that policy for you? It’s their policy.
How to deal with it? Apply elsewhere.
@BostonPanda my daughter ended up not applying to that school – Barnard – for other reasons. She’s now targeting some schools where she will get merit aid – she’s NMSF – and some more affordable state schools for that reason.
How did you come up with the equity? It is not based on tax assessments or what the neighbor sold for. Nor is it what Zillow or other real estate sites predict (without ever having inspected it.) It’s a snapshot for your home, based on the features, condition, what it really, truly could sell for today.
In your situation you should concentrate on schools that do not look at home equity or cap it to 1.2x AGI. There was a good list linked on CC while back but I cannot find it now. The best info I found is below:
http://www.thecollegesolution.com/will-your-home-equity-hurt-financial-aid-chances/
Maybe other posters can provide a better list.