FAFSA/EFC Advice?

We filled out a FAFSA in January using preliminary tax info from the last
check stubs of 2006, etc. The EFC is over $20K. Using some sites that try to
derive the methodology at how the EFC is calculated, it appears that it's
not due to parental assets (mostly in 401k/IRAs) but due to parental income.
I received a couple of patent awards in 2006, so the income is
"artificially" higher. Also, there are some factors that I don't see
reflected in the FAFSA form--younger siblings in private school, etc. I
don't see anywhere that home equity loans are factored into home equity.

I don't get a pension, so I have to fund my retirement from a 401k--but it
looks like that money is added back in to the AGI and so 401k contributions
don't help lower the AGI for financial aid amount.

Don't get me wrong--I don't want to cheat the system, but I *do* want to
present my info in the best allowable light.

Any advice or ideas before we finalize the FAFSA form?

Thanks.

See comments inserted (*)in the original message --

Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761


On 3/19/2007 6:36 AM, TheBreeze wrote:
> We filled out a FAFSA in January using preliminary tax info from the last
> check stubs of 2006, etc. The EFC is over $20K.

* Now that taxes are completed, you should make corrections to your
FAFSA. The corrections may move your EFC up or down.

>Using some sites that try to
> derive the methodology at how the EFC is calculated, it appears that it's
> not due to parental assets (mostly in 401k/IRAs) but due to parental income.

* Income is usually the most common factor. 401K/IRA assets are not
reported on the FAFSA.

> I received a couple of patent awards in 2006, so the income is
> "artificially" higher. Also, there are some factors that I don't see
> reflected in the FAFSA form--younger siblings in private school, etc.

* If you had unusual one-time income, or an expense for siblings private
school, you can write a letter to each college's financial aid director
pointing these amounts out. They can make an adjustment if they wish,
but they are not required to and the school's decision is final.

> I don't see anywhere that home equity loans are factored into home equity.

* Home equity and debt are not factors for the EFC - they did not ask on
the FAFSA about the home at all.

> I don't get a pension, so I have to fund my retirement from a 401k--but it
> looks like that money is added back in to the AGI and so 401k contributions
> don't help lower the AGI for financial aid amount.

* That's correct. Contributions to retirement accounts are voluntary so
do not reduce the available income for the FAFSA formula. Two families
with the same income should get the same EFC even if one chose to make a
retirement contribution and the other didn't.

> Don't get me wrong--I don't want to cheat the system, but I *do* want to
> present my info in the best allowable light.
>
> Any advice or ideas before we finalize the FAFSA form?

* Just make the necessary corrections and double-check all your answers.

>
> Thanks.
>
>