A question on Financial aid

bluebayou
Fri, 10 Dec 2004 11:28:22 +0000

Essentially, the federal EFC treats contributions to 401(k)'s, IRA’s, and other deferred compensation programs (designed for senior execs at corporations), as Deferred Income. All are added back to the AGI for the purposes of calculating EFC. As Shree points out, it is parental choice to put the funds in a tax-deferred account, or take it as taxable income and use the funds to pay for college expenses.