I have two rental houses. The Free Application for Federal Student Aid (FAFSA) hit me hard because of those rentals being in my name, which reduced my daughter's aid to zero. Is there a way to fix this? I am disabled and do not work. My wife only works part time.
— P.W., San Diego, CA

There are a couple of options available to you. First, those rental properties wouldn't count on the FAFSA if they were owned by a legitimate business, such as a Limited Liability Company (LLC) or a corporation. To form that business and have it counted as such, though, it would have to provide formal and regular services to the properties. Simply owning and leasing them aren't enough.

Second, you should write a special circumstance letter to the school directly. "You should explain, 'I have these rental properties and they're making my family contribution higher than I can truly afford to pay,' " says Scott Weingold, co-founder of College Planning Network, a college admissions and financial aid servicing center. "Say, 'I'm disabled, I can't work, and I can't get money out of these properties even if I tried.' "

Third, make sure you list only the fire sale value of those properties on the FAFSA—that is, what you'd be able to get out of them if you had to sell in the next month. "People tend to overinflate the value of their house or investment properties," Weingold says. "What is the equity you would own if you had to sell it within 30 days?"

Good luck. You're not the only one writing a letter right now. "More and more people are going to the school saying, 'I lost my job,' or 'My stocks went down,' or 'I can't afford to pay this,' " Weingold says. "So you really have to get your point across in a way that's going to make them want to do something about it."

-- Kate Ashford

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