Do Homeowners Qualify for Student Financial Aid?
Approximately 67 percent of all undergraduates attending college full time receive financial aid of some type, according to Sallie Mae. Student aid may consist of loans, scholarships, work-study programs or grants. Other than certain merit-based scholarships, student aid programs require proof of financial need, and assets are one factor considered. However, being a homeowner will not automatically disqualify you or your child from student aid programs.
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Expected Family Contribution
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The expected family contribution, or EFC, is the amount you can reasonably be expected to pay toward college expenses for yourself or your child. When you complete the Free Application for Federal Student Aid, or FAFSA, you provide information on your income and assets. This information is entered into a standardized formula to obtain your EFC. Those with the lowest EFCs typically qualify for the most aid. When computing the EFC, financial aid officers count 20 percent of the assets held in the student's name, but only 5.64 percent of the parents' assets.
Home Equity
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Although certain schools may include all or part of your home equity when computing financial aid eligibility, the FAFSA does not have any questions regarding ownership of a home. Even among the colleges that include equity as a factor, the exact percentage varies. For example, Princeton University does not include your home equity at all, while Boston College counts 100 percent of your equity, as of the time of publication.
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Dependent vs. Independent Students
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Financial aid officers consider the student as the one who should bear the primary responsibility for paying for his education, with his parents second. Therefore, the student's income and assets may be critical in determining the amount of aid he may receive. If he is an independent student, the financial aid office will base its decision on his circumstances rather than his parents'.
To qualify as an independent or emancipated student, he must meet one of six requirements: married; 24 years of age or older; professional or graduate student; orphan or ward of the court; active or former member of the military; or having legal dependents besides a spouse, such as a child.
When in Doubt, Apply
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Because each student's situation is evaluated separately, it is impossible to state unequivocally whether she will qualify for financial aid or which assets will affect the decision. Sallie Mae advises that you need to complete your FAFSA to find out how much aid you may receive. It costs you nothing to complete the FAFSA, which you can do online or at your school's financial aid office.
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