Home Equity Question

Hi there, I come from a low-mid income family, and without taking assets such as our house into account, my EFC is less than $10k. However, this rises up to $70k+ for schools that take home equity into account. Isn’t this a bit strange? Is there a list of schools that take home equity into account or not? We obviously can’t afford $70k+. I could only find an article from 2014!!


Click on the “Home Equity Spreadsheet” link (caution: the data is several years old).

How much equity is there in the primary home? To add $60k+ to the EFC, is must be a large number.

Our house value has more than doubled… it’s not an accurate representation of our wealth or what we’re able to contribute.

It may not be an accurate representation of what you can easily contribute, but it is definitely a decent representation of current net worth (wealth).

Again: How much equity is there in the primary home?

The EFC generated by FAFSA doesn’t take the primary residence into account so all the schools that require only the FAFSA for financial aid should be okay for you (although a $10k EFC doesn’t guarantee you anything other than, probably a subsidized loan and maybe some work study).

All schools that take the primary residence into account require the CSS profile. Those schools may consider other factors too - cars, retirement accounts, etc. They are giving out their own money so can consider anything they want to.

OP- you are smart to run the numbers to see your EFC.

Now you need to run a different set of numbers- how much you can actually afford to pay. How much from savings, how much from current income, what (if anything) you can afford to borrow (HELOC if your house has appreciated a lot? Or no parental loans, that’s also an answer).

You need to know BOTH numbers before looking seriously at colleges. If you cannot afford your EFC (many people can’t) you need an exact number of what you can afford, and then start from there. Any college which is going to come in over that number- off the list.

@twoinanddone Agreed, but I’m an international student so the FAFSA doesn’t apply to me as the only places I can get aid is at private universities with the CSS profile.

@blossom Yes house has appreciated a lot, there is still the mortgage on it though. I guess I can only afford to apply to schools that cap home equity based on income, or ones that don’t take it into account.

Home equity is the value of your house MINUS the remaining mortgage. What is that amount?

As an international student, your home equity will be considered to some degree. You need to know what that amount is. There are colleges that don’t consider the FULL amount of home equity, but rather a %age of it.

But really…what is your family income? That is the bigger driver.

To increase your family contribution to $60,000 or more a year…your home equity would need to be in the million dollar range. Is it?