<p>I’ve read in various threads that the FAFSA consideres 5.6% of parent assets towards EFC.</p>
<p>looking at the worksheet it seems as though it’s 12% - am I reading this wrong?</p>
<p><a href=“http://www.ifap.ed.gov/eannouncement...rmulaGuide.pdf[/url]”>http://www.ifap.ed.gov/eannouncement...rmulaGuide.pdf</a> page 9</p>
<p>If you look at the whole formula and the tables - on page 9 - worksheet A - 12% of the assets are added to the ‘available income’ - AI to make the ‘adjusted available income’ - AAI. Then you go to table A6 and a portion of the AAI is used to get the EFC.</p>
<p>So, for instance,if the AI from income is $30,000 and the parents have $200,000 of unprotected assets then 12 % of the $200,000 = $24,000. That would be added to the $30,000 to make $54,000 AAI.
On table A6 (on page 19) for income over $27,801 the EFC is $7519 + 47% of the amount over $27,801 ($54000 - 27801 = 26199. 26199 x 47% = $12314) </p>
<p>$12314+7519 = 19833 EFC.</p>
<p>Basically for that level of AAI it works out that 12% of the assets are included in the AAI then @47% of that number is included in the EFC. 47% of 12 is 5.6% </p>
<p>5.6 would be the maximum amount of assets that would go to the EFC - it would be a little less depending on the levels of AI and AGI.</p>
<p>Thanks, I didn’t read down far enough…</p>
<p>I guess I misread that too.</p>
<p>I just did the online calculator. the amount of the my EFC from assets is 7.8 %. Or 12% of discretionary net worth (assets - asset protection).</p>
<p>I’m sure my percentage is higher because I’m a single parent and the asset protection is much lower if for a 1 parent family</p>
<p>Sue - That is curious - the % of unprotected assets should not be higher than 5.6% - the 47% of 12% is the highest level I can see on the formula. Which calculator did you use? I have found the finaid one to be very accurate.</p>
<p>I agree the very asset protection level for single parents is very unfair. I’m not one myself but I do think it s/b at least 50% of that for 2 parent families. Being less that 50% is totally illogical as well as unfair.</p>
<p>[FinAid</a> | Calculators | Expected Family Contribution (EFC) and Financial Aid](<a href=“http://www.finaid.org/calculators/scripts/estimate.cgi]FinAid”>http://www.finaid.org/calculators/scripts/estimate.cgi)</p>
<p>it took my assets, subtracted the asset protection, and then took 12% of that.</p>
<p>But the fact that I’m a single parent gives me 60% less asset protection than a 2 parent household at the same asset amount - look at table A5 on page 19. I’m 46, asset protection is 18300, vs 44500 for a 2 parent household. Thanks for nothing uncle sam. </p>
<p>that has to be what is making my net percentage of assets put towards my EFC higher.</p>
<p>Hm, maybe I can transfer to a job in the dept of education (from the dept of defense where I currently work) and put my business analyst skills into those charts :-)</p>
<p>I think a single parent should have asset protection over 50% of a 2 parent family. I don’t pay half a mortgage. And my health care premium is the same as it would be for a married couple with 3 kids. The only thing that I have less to buy is food and slightly less on utilities</p>
<p>If my asset protection was the same as a 2 parent family, my EFC would be over 3K less than it currently is.</p>
<p>I wonder if that is a mistake on the finaid calculation.</p>
<p>I went back to last years figures and realized the finaid prediction was accurate but our assets were below the protected allowance so there would be no asset included. </p>
<p>I agree the single parent protection s/b more than 50%. We are a 2 parent family but my husband has very poor health. If something were to happen to him the asset protection allowance would drop enormously and I would still have mostly the same expenses. (yes I know - bit morbid to think that way but it is hard to not have it cross ones mind).</p>
<p>The form is pretty straightforward</p>
<p>(Net worth (all your money) - asset protection) *.12</p>
<p>The part from income is more complex with the (asset protection + employment expense allowance + tax allowances) subtracted from the income.</p>
<p>The other part about the fafsa is the fact the the pre-tax money I put into my retirement plan is considered part of my available income.</p>
<p>Let me get this straight. The government wants me to save for my own retirement, but it counts the money I put into retirement (if it’s pretax) as available income. </p>
<p>***?? I guess I could borrow from my retirement $. Interest rate is only 4%. I might have to scale back my contributions to pay my EFC by the time senior year rolls around.</p>
<p>Have you run your numbers through the CC calculator. I think it is more accurate as it uses the formula correctly to calculate the asset contribution.</p>
<p>If you look at the rest of the form at <a href=“http://ifap.ed.gov/eannouncements/attachments/0809EFCFormulaGuide.pdf[/url]”>http://ifap.ed.gov/eannouncements/attachments/0809EFCFormulaGuide.pdf</a>
on page 9 the 12% of assets are added to the AI giving the AAI. Then go to table A6 on page 19 and calculate the EFC based on that.</p>
<p>sueinphilly and swimcatsmom:</p>
<p>About that asset protection allowance for single parents:
I did finally get an acknowledgement from my congressperson’s staff that they heard me on the issue and would be watching it.</p>
<p>I got fired up and emailed some presidential candidates too. Big mistake. All you get for that work is a full email inbox soliciting donations.</p>
<p>the CC EFC is using numbers that aren’t the same as page 19. it gave me income protection of a 50 year old. And it also used 35% for the percentage of the students asset to contribute. The finaid.org calculator was almost to the penny of my actual EFC.</p>
<p>I hope they fix the asset protection for single parents before my son is out of school and before I don’t have any assets left to protect!</p>
<p>purplexed - good for you. Sorry about the emails though - what a pain!</p>
<p>Sue - wow 35% of student assets is well out of date. When I ran numbers through the CC calculator it came out very in line with the formula on page 19 - I did not put student assets in so did not realise how out of date they were.</p>
<p>I just looked at the CC calculator and the finaid calculator side by side. The state tax allowance is 1000 more with CC, the income protection and employment expense allowance is lower and the asset protection is higher.</p>
<p>This was using the exact same data. I don’t think the CC data is using the most up to date FAFSA charts. YMMV</p>
<p>I see that untaxed income and benefits are added back. I know from reading the threads that this includes 401(k) contributions. But does it include medical insurance premiums and other health/dependant care benefits that are deducted from pretax income?</p>
<p>I am pretty sure that Flexible spending account $$ aren’t added back and that is reported in the same spot on my W2 as the pre-tax insurance premium.</p>