The impact of a family’s home equity on financial aid calculations for colleges and universities can vary widely from school to school, ranging from 100% consideration to none at all. In some cases, whether or not a school considers home equity could shift aid grants by a factor of thousands of dollars.

The Free Application for Federal Student Aid, which almost all U.S. colleges and universities require, does not consider home equity in its calculation of household assets. However, a number of institutions – many of them private – also require the CSS Profile, which asks for applicants’ home purchase price, purchase year, current value and current debt.

Boston College, for example, looks at 100% of home equity. Stanford University announced last year that it won’t consider home equity at all, [and] Cornell University will limit home equity to 1½-times the family’s adjusted gross income.

The school isn’t necessarily expecting parents to tap their home equity to cover their child’s tuition. Instead, the school considers home equity and other assets to determine how much parents can contribute toward college costs. The higher the assets, the more parents are expected to pay.

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