How Rising Interest Rates Could Impact Your Financial Aid Eligibility
As interest rates climb, families are feeling the squeeze across every part of their finances—and college planning is no exception. What many don’t realize is that rising interest rates can have a direct and indirect impact on your student’s financial aid eligibility. From how assets are calculated to shifts in available loan types and costs, the ripple effect is real.
One key area is home equity. If you’ve taken out a home equity line of credit (HELOC) to help cover college costs, rising interest rates mean higher monthly payments—sometimes unexpectedly. Even worse, some financial aid formulas (like those used by CSS Profile schools) include home equity in your ability to pay. That can reduce aid eligibility at the worst possible time.
Additionally, when rates rise:
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Federal student loans may have higher interest rates next year.
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Families who used 529s or savings accounts may now be earning more interest, which could increase their Student Aid Index (SAI).
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Private student loans will cost more, shrinking future affordability.
Diversified College Planning helps families understand how current economic trends affect their individual aid strategy, including adjusting asset positioning, timing financial moves, and picking colleges that offer the most favorable net costs. Planning without considering interest rates could cost you thousands in missed aid.
Contact Us Today:
Want help adjusting your college plan in light of rising interest rates?
📞 Call us at 770-662-8510
📅 Schedule a free consultation: Book with Mike
Or visit our Contact Page: https://diversifiedcollegeplanning.com/contact-us/
