<p>The financial aid forms will not reduce income for an investment loss, and in general colleges do not consider investment losses as a special circumstance. Financial aid is primarily calculated on current year income. The contribution that would have been expected for assets such as a rental property will of course not be expected if the asset is gone or has a negative value.</p>
<p>It is the same for primary homes - those who are “upside down” with a mortgage that exceeds the value of the home will not receive additional aid for that circumstance - the home equity will be treated as “$0” in that case.</p>
<p>You can always present your losses as a special circumstance and see if colleges will consider it [USC</a> Financial Aid - Applying & Receiving Financial Aid - Special Circumstances - Factors We Will Consider](<a href=“http://www.usc.edu/admission/fa/applying_receiving/special/change.html]USC”>http://www.usc.edu/admission/fa/applying_receiving/special/change.html) . It never hurts to ask.</p>