The Question
A lot of these ‘free tuition’ policies are more PR than reality because they use the CSS Profile rather than the FAFSA and hold the value of the primary residence and retirement accounts against the family (even when the parents are too young to tap the IRA or 401k without a hefty penalty).
— Anonymous Facebook User
Welcome to the Friday mailbag, where we take one reader question and answer it. Have one? Send it to us — details at the bottom.
The Short Answer
This comment showed up under our coverage of why elite colleges are racing to offer free tuition, and the frustration behind it is real. The CSS Profile asks for far more than the FAFSA does, and many families find it invasive. But the comment treats the form and the formula as the same thing, and they aren’t.
The CSS Profile does ask for your home’s value, your mortgage balance, and the current value of every retirement plan, but it’s only an application. What a college does with each answer is its own policy, which is part of why college pricing works like a black box for so many families.
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What Does The CSS Profile Ask About Your Home And Retirement Accounts?
The CSS Profile asks parents for the year they bought their home, the purchase price, its current market value, and what they still owe. It also asks which retirement plans each parent has, from 401(k)s and IRAs to pensions, and the current value of those retirement plans as of the day you file.
The FAFSA asks for none of that. The federal financial aid rules exclude a family’s principal residence, the value of retirement plans, a farm the family lives on, and a family business with 100 or fewer employees. That’s why we tell families you don’t report a 401(k) or IRA on the FAFSA.
The CSS Profile also goes further on income. Payroll contributions to a 401(k) or 403(b) don’t show up in adjusted gross income, so many CSS schools add them back.
Tufts, for example, says its income figure counts contributions to tax-deferred retirement plans and withdrawals from retirement accounts. That’s one reason a family with a good SAI on the FAFSA can still get a higher family contribution at a CSS school.
Do Colleges Use Every Number On The CSS Profile?
No. The College Board, which runs the CSS Profile, tells colleges they can adjust the formula to reflect their institutional mission, values, and goals. One school can ignore your home entirely while another counts every dollar of equity, and both are using the same application.
Here’s how 11 colleges with free-tuition or full-tuition aid tiers describe their own rules on their financial aid websites. It’s important to realize that many of these schools talk about “typical assets” and they don’t define it. A lot of families get hung up on this word because they feel like any home equity or any value in their retirement account will negatively impact them.
However, in our conversations with financial aid officers, most of them are generally on the lookout for the outliers. This means families that might have a $10 million home or a $50 million IRA. They’re really not trying to penalize middle-income Americans who have built up a little home equity and a little bit in retirement.
Our story on what meeting 100% of demonstrated need actually means covers how these schools build their aid offers.
| College | Primary Home Equity | Retirement Accounts | Asset Rule For Top Aid Tier |
|---|---|---|---|
| Harvard | Typically Ignored | Typically Ignored | Not specified |
| Stanford | Ignored | Ignored | “Typical assets,” not defined |
| Princeton | Ignored | Ignored | Cost figures assume assets under $175,000 |
| Johns Hopkins | Ignored | Ignored | Assets generally under 3x income |
| Penn | Ignored | Not Stated | Liquid assets of $50,000 or less, no other real estate |
| Duke | Capped By Income | Ignored | Not specified |
| Columbia | Counted | Ignored | Typical assets up to about $250,000 |
| Tufts | Counted | Ignored | “Typical assets,” not defined |
| Notre Dame | Counted | Ignored | Typical for income level, not defined |
| Dartmouth | Counted | Not Stated | “Typical assets,” not defined |
| Yale | Counted | Not Stated | “Typical assets,” not defined |
On retirement, the reader’s worry mostly doesn’t hold up at these schools. Duke says retirement funds such as 401(k), 403(b), and IRA accounts “are always excluded from consideration.” Johns Hopkins goes further and says it never expects families to use retirement savings to pay for college. On retirement balances, these schools line up with the FAFSA, which also leaves out 401(k) and IRA balances.
Home equity is where the reader has a point. Columbia lists home equity alongside cash and investments as a parent asset, and so do Tufts, Notre Dame, Dartmouth, and Yale. A family with a paid-down house can miss the free-tuition tier at those schools even with income under the threshold, which is the same problem we flagged with trust funds and financial aid.
How Much Can Home Equity Change What A College Counts?
The difference between policies can be hundreds of thousands of dollars on the same house. Take a family earning $180,000 that owns a $900,000 home with a $250,000 mortgage, leaving $650,000 in equity. The FAFSA’s Student Aid Index counts none of it.
| Policy | Home Equity Counted | Share Of Equity Counted |
|---|---|---|
| FAFSA | $0 | 0% |
| CSS School That Ignores Home Equity | $0 | 0% |
| Capped At 1.2x Income | $216,000 | 33% |
| Capped At 2x Income | $360,000 | 55% |
| Capped At 3x Income | $540,000 | 83% |
| Full Equity Counted | $650,000 | 100% |
Schools that cap home equity tie the cap to income. Duke caps home equity based on parent income level, though it doesn’t publish the multiple. A cap protects a family that bought decades ago in an expensive market from looking rich on paper, a gap that shows up in what families really pay for college.
Colleges assess a percentage of countable assets as part of the parent contribution, and each school sets its own asset protection and assessment rules. Still, $650,000 of counted equity moves a family well past what most schools call “typical assets.”
Is It Fair To Count Home Equity And Retirement Savings?
Both sides have a fair argument, and that’s why colleges land in different places.
The arguments that families feel this is unfair are pretty straightforward: A house isn’t cash, and most parents can’t tap an IRA before age 59½ without the 10% additional tax on early distributions on top of income tax. Our list of ways to withdraw from an IRA or 401(k) penalty-free shows how few of those exceptions fit a tuition bill.
Families also argue that counting savings punishes the people who planned ahead. A family that maxed out a 401(k) for 15 years shouldn’t get less aid than a family with the same income that spent the money. But most CSS Profile schools agree on not counting retirement savings.
The other side has a point, though. The FAFSA ignores the primary residence, retirement plans, and small family-owned businesses entirely, so a family with a $5 million house and $5 million in IRAs can report little more than cash and a brokerage account. A college handing out institutional grant money, which comes from its own endowment and other students’ tuition, has a reason to see the whole balance sheet before calling that family needy. That’s the same logic behind the FAFSA itself assuming parents can help pay until age 24.
Again, we see the goal as not to punish middle-class families, but rather to make sure aid is not being handed out to millionaire and billionaire families who may have multiple levers to pull to shelter those assets.
Are Free-Tuition Policies Really “PR Over Reality”?
Partly. The income levels are the headlines, but the “typical asset” condition decides who actually qualifies. At Penn, the Quaker Commitment ignores primary home equity. It also requires liquid assets of $50,000 or less and no real estate beyond the primary home.
The schools that define “typical assets” in dollars are the most honest about it. Johns Hopkins uses assets generally under three times annual income, and Princeton’s free-tuition figures (PDF File) are based on families with assets under $175,000. Our roundup of tuition-free colleges tracks the income thresholds, and the asset rules sit underneath them.
Free tuition also isn’t free college. A Brookings analysis found students still face $20,000 to $25,000 a year in housing, food, and other costs even when tuition is covered. And while some of these schools’ “free” policies do include housing and other costs, they typically have an even lower income and asset threshold.
What Should Families Do Before Filing The CSS Profile?
Look up each school’s asset policy before you assume the worst. The answer is usually one sentence on the college’s own aid website.
- Search each school’s financial aid site for “home equity” and “retirement.” Most of the policies in the table above came directly from the schools’ own website.
- Run each school’s own net price calculator. Use the calculator on the college’s website, since a generic estimate won’t reflect that school’s asset rules.
- Report accurately. Every number goes in as of the day you file, and colleges can verify it. Our walkthrough of the CSS Profile parent asset questions covers what goes where.
- Use the special circumstances section. If your equity is high because you bought in 1998 or your home is in a high-cost area, say so in the CSS Profile special circumstances box.
- Appeal with competing offers. If one school ignores your home and another counts all of it, that disconnect belongs in a financial aid appeal.
The Bottom Line
The CSS Profile collects everything, but colleges don’t use everything. Retirement accounts are excluded at nearly every free-tuition school we checked, and home equity is a coin flip that depends on the college. Read each school’s policy, run its net price calculator, and judge the offer on the full cost of attendance over four years.
Frequently Asked Questions
Does The CSS Profile Count Retirement Accounts As Assets?
The CSS Profile asks for retirement balances, but most selective colleges leave them out of the aid calculation. Duke, Columbia, Tufts, Notre Dame, Princeton, Stanford, and Johns Hopkins all say they exclude retirement accounts. Many CSS schools do add 401(k) and 403(b) contributions back into income.
Does The CSS Profile Count Home Equity?
It depends on the college. Princeton, Stanford, Johns Hopkins, and Penn ignore primary home equity, Duke caps it by income, and Columbia, Yale, Dartmouth, Tufts, and Notre Dame count it. The FAFSA doesn’t count your home at all.
How Much Does The CSS Profile Cost?
Columbia’s 2026-27 instructions put the CSS Profile at $25 for the first college and $16 for each additional school. It’s free for families with adjusted gross income up to $100,000, among other fee waiver rules.
Which Colleges Require The CSS Profile?
Nearly 350 colleges, universities, and scholarship programs (PDF File) use it, according to the College Board. Check our CSS Profile walkthrough for the full list of questions and how to answer each one.
Send Us Your Question
Got a student loan, financial aid, or money question you can’t get a straight answer on? Send it to us and we may answer it in a future Friday mailbag.
Reader Mailbag
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.