A question on Financial aid

drusba
Fri, 10 Dec 2004 09:19:36 +0000

It is a mixed bag. The bad: the amount you contribute in the year to your 401(k) plan will be counted in the formula that determines Estimated Family Contribution under FAFSA. (To determine your total assets available for paying college costs, the formula starts with Adjusted Gross Income but then adds back in untaxed income such as amounts put into 401(k) plans). The good: the amount you already have in the account (from prior years contributions and growth) will not be considered in the formula.