A question on Financial aid

Sugee
Fri, 10 Dec 2004 08:15:14 +0000

Dear all,

Troubling you with one more question.

When the financial aid is considered, do they (colleges and FAFSA administrators) take the adjusted gross income after the 401-K deferrals or do they consider the unadjusted gross before 401-K deferrals.

I and my husband have not been making 401-K deferrals so far because only one of us was working at any time, and we needed to free up as much as our paycheck for expenses and making small savings for emergencies - we have tried to maintain 5 months of expenses in case we both were to be jobless. Although we pay into social security, medicare and unemployment benefits, we are not entitled to any of them since we do not have a Green Card yet.

At this point both of us are working, and we can save what we can in 401-K or keep it liquid for college expenses. If colleges take our paying capacity before deducting the 401-K, we are better off holding off on 401-K deferrals, in order to have cash for college. Otherwise, we could begin our 401-K savings.

Since we need to make deferral decisions at this point in our respective work places, I need your advise.

We will not be filling FAFSA this year, but if by God’s grace and good thoughts we do get our GC next year, we will be able to start filling out FAFSA next year. But we will be filling out College Aid forms this year to those colleges that provide aid for internationals from the college funds. Though not need-blind in admissions, some of the colleges provide need-based aid on a merit basis depending on the student’s standing in the International pool of admits.

Many thanks in advance.