The answer here is…it depends on several factors. So, before you make the decision, consider the following:
- Which financial aid application(s) do the colleges require? The Free Application for Federal Student Aid (FAFSA) does not look at home equity, so if you are applying to colleges that ONLY accept the FAFSA, then, no, it won’t help you at all.
- Some colleges, mostly private colleges that give away a significant amount of their own grant dollars, will also ask you to complete the CSS Profile. The CSS Profile will ask for home equity and the loan MIGHT make a difference.
- The formulae for either the FAFSA for Profile are both income heavy and weigh assets (such as home equity) much less than income.