Home Equity Not Included In Financial Aid Assessments

Harvard was absent from a list of more than 20 U.S. colleges that recently changed their financial aid policies to benefit middle-income families by limiting their consideration of home equity—because Harvard already excludes the value of homes in deciding aid, according to Director of Financial Aid Sally C. Donahue.

The New York Times reported last week that universities including Yale, Stanford, Cornell and Emory will change their consideration of home equity. The schools previously included the value of a home as money that could potentially be used to pay for a college education, but they will now only consider a portion of that value—up to five percent of a home’s value.

Donahue said Harvard has not used home equity as a determining factor for quite some time.

“While we ask families applying for financial aid to provide us with detailed and complete information about their finances, including home equity, we have not actually included it at all in our actual calculation of a family’s ability to contribute for a number of years,” Donahue wrote in an e-mail.

Donahue attributed this policy to Harvard’s sizeable endowment. There is enough scholarship money available that it has not been necessary to include home equity as a factor in the financial aid decision, she said. Harvard doled out $68 million in financial aid last year.

“Our financial aid program is designed to provide access to a Harvard education for all admitted students whether from ‘middle income’ backgrounds, or even more critically, for those from low income families who may never have owned a home,” said Donahue.


For other schools, the policy change will most affect midde-income families whose cash holdings are invested in their homes. Emory told the Times that one in six of its students will be eligible for more aid under the revised financial aid policy.


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