A number of the nation's top colleges have changed the way they look at home equity in the financial aid process. While homes will still count as an asset and families will still be expected to contribute up to 5% of the home's equity towards an education, the home's equity will now be capped at 2.4 times a household's income; previously, the entire market value of a home was included in the financial aid calculations.

The participating schools include Columbia University, Cornell University, Duke University, Emory University, Stanford University, Yale University, University of Chicago, University of Pennsylvania, Williams University, Wesleyan University, and a dozen more. These colleges are known as the 568 President's Working Group, which is a reference to a federal provision that permits schools to establish common principles for financial aid without violating the antitrust law.

While the change in which home equity is calculated in the financial aid process is expected to have little effect on students at the economic extremes, those from the middle class, whose family fortunes are often tied up in their homes, will probably see a significant increase in the financial aid they can get. For example, James A. Blevin, Jr., the director of financial aid at Duke University, estimates that qualified students could see their financial aid awards go up by $500 or even $1,000 a year.

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