<p>Can anyone tell me how FAFSA reviews any assets, 410k, money market & CD’s that parents may have? Does it hurt the applicant? My son is a senior seeking as much financial aid as possible. I’m presently unemployed with little income and struggling to find a job. Any advice?</p>
<p>You will get more information by looking in the financial aid forum of this site. There is a lot of information there. I am not an expert, but what I do know is that there is a protected amount of parent assets and then 5.6% of the rest goes into the EFC calculation. 401k’s aren’t counted as assets, but if you contribute a deductible $5000 to a 401k in 2009, that amount would be added back to your 2009 income for the calculation.<br>
With very low income (and a couple of other circumstances), there is a chance the student could get a 0 EFC, which means he would be eligible for certain grants, but does not necessarily mean he could go to college for free.</p>
<p>Thank you Mamabear, your comments are helpful, and I will review financial aid forum area.</p>
<p>Actually ANY amount you contribute to your 401K or IRA is added back in as income (no limit…the above post implied a $5000 limit…not so). In other words, when you file the 2010-2011 FAFSA, you will use the tax year 2009 info. Any contributions made in 2009 will be added back as income BUT the balance IN those accounts is not counted as an asset on the FAFSA. Some Profile schools, however, do ask for the balances in your retirement accounts. No one really knows how those figures are used.</p>
<p>There is some asset protection for parents. In addition, the FAFSA primarily computes your EFC using Income and Assets (like your bank accounts and CDs).</p>
<p>Agreed…go over to the Financial Aid section of this forum. Lots of information there re: financial aid.</p>
<p><a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf</a></p>
<p>Here is the exact formula for 2009-10, you can plug in your numbers and determine the precise affect. There is a decent asset protection amount, $40-50k or so for a couple.</p>