Harvard and a very small number of other schools have such massive endowments that they COULD allow everyone to go for free. Say there are 3,000 colleges in the US (guessing), then 2,995 of them can't afford to do that. Most of the colleges that say they "meet need" do ask about your home equity on the CSS profile form. FAFSA only colleges do not look at home equity. But a lot of the colleges that do require the CSS (pretty much all the top colleges) won't tell you their exact equations for calculating need... so you can't know for sure.

Unless a college has a big enough endowment to cover everyone's expenses anyway, they want to make sure people don't have large assets they COULD tap for college. If you have a $750,000 house that is paid off, but only $100,000 in liquid assets, you can hardly blame colleges for taking that into account. It used to be that they didn't look at that... but every time people try to game the system (trying to get someone else to pay their college bills by doing things like investing in home equity that they thought wouldn't be considered), eventually the colleges that have to limit their Financial Aid distributions get wise and close the loophole. Which also tells you that the rules today for calculating financial aid may not be the rules in 5 or 10 years when your kids are actually applying.

Colleges that don't guarantee to "meet need" just gap you -- they give you some aid, and offer some federal loans. But they know perfectly well that your income and assets are not sufficient to pay the rest, and they expect you to take out private loans to cover that gap.

Edited by intparent (07/23/13 07:47 AM)