Determine if your child’s university uses the CSS Profile application in addition to the FAFSA. These two forms are used by many colleges to determine your financial capabilities, and ultimately affect the amount of aid your child receives. Your home equity may be viewed as an asset when calculating need-based financial aid.
Obtain a home equity loan or line of credit. To prevent your home’s equity from negatively impacting your ability to obtain need-based aid for your child, you must reduce or eliminate the amount of equity in your property.
Transfer your home’s equity into a non-includable asset such as a fixed or indexed annuity. Some university financial aid applications request information about retirement accounts, but rarely penalize you for high balances or reduce the amount of aid based on the size of these accounts. According to the Financial Aid Supersite, “one way to shelter your home equity from both the CSS Profile and the FAFSA is to move it inside a non-includable asset.”