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FAFSA income allowance chart

sueinphillysueinphilly Posts: 4,207Registered User Senior Member
I'm wondering how long $3000 has been the income allowance for dependent students. Also, does it strike anyone else as odd that the govt wants 50% of the income over that amount AND 20% of anything the student has saved (in their name).

Does the income allowance get adjusted for inflation ? And it seems like the govt is double dipping.

Student earns 7000. Govt takes $2000. Student has $750 in the bank. Govt takes another $150

The $2150 that the govt adds to EFC is over 30% of the students gross pay. Seems very excessive to me.
Post edited by sueinphilly on

Replies to: FAFSA income allowance chart

  • 3bm1033bm103 Posts: 3,572Registered User Senior Member
    Student earns 7000. Government doesn't take any of it. Government simply gives the student 2150 less than if the student didn't earn the 7000. It's also probably in loans anyway, which means student pays it back in the end. Meanwhile, student is $4850 ahead of what they would have been had they not earned that money.
  • sueinphillysueinphilly Posts: 4,207Registered User Senior Member
    you are missing my point. If you earn 7000, figure on about 20% for taxes so now you are at 5600. The govt adds 2000 to the EFC. That's an effective rate of over 35% of net pay mandated to the EFC.

    I think the $3000 income allowance is too low. And the 50% over 3K is too high

    Of course the student is going to be putting money from their earnings towards school, but IMO, the govt's calculation putting a really high percentage of their earnings onto the EFC.

    Where does that (arbitrary 3K figure) come from and does it increase from year to year.

    Why do I have this sinking feeling that it's been set at 3K for the last 20 years when 3k was alot for a student to earn.
  • sueinphillysueinphilly Posts: 4,207Registered User Senior Member
    http://www.finaid.org/educators/HR2669_conf_report.pdf

    page 49. Income allowance will increase to 6000 for 2012-2013

    It will be 3750 for 2009-2010 school year
  • hsmomstefhsmomstef Posts: 3,579Registered User Senior Member
    i think the idea is that the "budget" the school uses in it's calculations includes food, lodging, usually transportation, tuition, etc -- everything the student needs to live. What other "needs" (not wants) could the student have that he would need that income for?

    The idea is that paying for the education is the primary responsibility of the family (including the student) and therefore, all monies that are available should be used for that purpose. I can't think of any necessary expenses that those funds would be needed for that would preempt payment for college expenses. (I can think of plenty of things the student would like to do with the money -- but that is beside the point).
  • sueinphillysueinphilly Posts: 4,207Registered User Senior Member
    I just think that the 3000 figure has been there a long time and it's just now being adjusted to more realistic levels.

    Of course part of his earnings will go towards school stuff, but I think the formula is out of whack and hasn't been updated in a while.

    according to the link above, it will double from 3 to 6K in the next 5 years. How long has it been 3K income protection allowance?? since when, anyone know??
  • undecidedundecided Posts: 2,029Registered User Senior Member
    Of course part of his earnings will go towards school stuff,

    Not part. All. The family of a student gets a larger allowance for discretionary spending because, well, they're supporting themselves in addition to paying for the student's education. The student? They're lucky there is no way to justify taking 100% of their income. What else could they possibly need to spend their money on other than the school the federal government is considering giving them money to attend full time?

    Except, of course, for the retirement savings (in appropriately excepted non-liquid accounts, like IRA) and monies sent home to their low-income families which are probably why they have any kind of allowance before they take it into consideration.
  • sueinphillysueinphilly Posts: 4,207Registered User Senior Member
    if he needs to buy a computer that isn't part of the COA

    If he chooses not to partake in a meal plan (for which I pay $3600 a year at NYU), my COA will decrease but not the EFC and we still have to pay for food for my son.
  • undecidedundecided Posts: 2,029Registered User Senior Member
    Sometimes you can appeal to the FAO to have a computer factored into the COA. Most often they'll just increase the loan amount, but it's still there.

    And that is true, but COA will still account for "food expenses." It probably won't match up with reality, but they do make a nod toward expenses incurred.

    I'm not saying I agree with their formula, just that it makes "sense" in an odd sort of way. It just doesn't jive with pre-college spending arrangements; there definitely has to be a shift in perspective on what exactly is "required" and where money goes.
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