As far as how your rental equity is assessed…for FAFSA purposes 5.6% of the equity will be added to your family contribution. So for $250,000 equity…about $13000 or so in addition to whatever your family contribution is based on your income.
For Profile Schools, they could assess 100% of the equity…it depends on the colleges policies.
But here is a question…is your income such that you would even qualify for need based aid? You are contemplating some financial gymnastics here…and really, if your income and assets are above a certain threshold, you wouldn’t qualify for need based aid anyway.
You might also want your student to look at colleges where they could get decent merit aid which wouldn’t consider your income or assets at all.