How property impacts financial aid for college

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Q. I’ve heard property counts in financial aid formulas. How does it count?
— Property owner

A. It’s a great question. There are lots of nuances to financial aid formulas.

Property is treated differently in financial aid formulas depending if the college is public or private, said Sheri Iannetta Cupo, a certified financial planner with SageBroadview Financial Planning in Morristown.

When dealing with public schools that use Free Application for Federal Student Aid, commonly known as the FAFSA, the family home — your primary residence — is not considered as part of reportable assets, Cupo said.

“However, vacation homes or rental properties are reported as investment assets unless the property is part of a small business and used to perform a service for the business,” she said. “These reportable assets lower the eligibility for financial aid.”

Some private colleges that use the CSS/Financial Aid PROFILE, commonly calleded the CSS Profile, count the primary home, business, or farm towards reportable assets as well, she said.

The CSS Profile financial aid documents take a deeper dive into the parent’s finances, and it takes more assets into consideration for financial aid eligibility.

“These schools, however, will sometimes have a cap of how much the home value can impact the eligibility,” Cupo said. “When reporting value of property for either form, remember to include the net value. Net value is the value of the property less any debt owed.”

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