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A scale that has the lager measuring part in the shape of a house, and the smaller one in the silhouette of a university building.
Kiersten Essenpreis for Money

Most families with college-bound students can name some of the biggest ingredients in a typical college’s financial aid recipe – income, savings and stock investments. But did you know the value of your home can be part of the mix, too?

Dozens of colleges around the country weigh your home equity when figuring out, behind closed doors, what you’ll have to pay for your son or daughter to attend.

Homes are many families’ largest asset — even before the soaring housing market of late. (The average home value in the U.S. has increased 16% since last summer, and Zillow predicts home values will climb 12% higher by next summer.)

The college financial aid formulas essentially expect parents to tap some of that growing asset to pay for tuition. Even if you’re an older parent planning to use your home equity as part of your retirement strategy or a relatively middle-class family who lives in an area with a high cost of living, the results will be the same: having a lot of equity in your home will increase what many colleges expect your family to pay.

“Most folks have no idea how much home equity plays in an award," says Paula Bishop, a college financial aid consultant in Kirkland, Washington.

A few colleges outline their home equity calculations clearly on their financial aid websites. In other cases, you may have to dig for the information online or even call a specific school to find out.