I believe that IRAs are not included as "EFC" assets - but what other assets are also excluded? Annuities? Trusts?
I have read that there is something called "asset protection" of $50,000 (this number must have been set decades ago as it wouldnt keep the wolf from the door very long in retirement) But for a married couple is the excluded amount $50,000 or $100,000? For the sake of argument lets say a couple has bank savings for retirement of $200,000 (not IRA money). I believe that the EFC "capture" is 12% - so is the EFC $12,000 or $18,000 in such a case?
Also isnt the FAFSA calculation ridiculously flawed? Just one example - it seems that a student who lets say earns $15,000 in the summer and after taxes etc saves $10,000. The EFC calculation is a double whammy as the kid gets penalized both for the earnings AND the savings from those earnings........Does the EFC capture 35% of the $15,000 AND 35% of the savings from those earnings! Does that mean the family EFC includes 35% of $15,000 plus $10,000 or $8750 of those $10,000 savings? Does EFC imput Gross or AGI income?