Know What Counts
In order to get the best EFC (Expected Family Contribution) on your FAFSA
results, it can be helpful to know ahead of time how your assets are counted:
Counted: Savings and checking accounts, CDs, stocks, bonds, mutual funds,
529 and other prepaid plans, and any payments into retirement accounts during the
2015 tax year
Not counted: Your home, retirement assets (contributions before the 2015
tax year), pensions, property in LLCs, personal assets (cars, clothing, household
items)
Know the Lingo!
FAFSA: Free Application for Federal
Student Aid
EFC: Expected Family Contribution
*See more student loan lingo in Dave
Ramsey’s “A Simple Guide to College
Financial Aid” at potentialmagazine.com
Parent income is counted 9x more heavily than parent assets
in college aid formulas!
All Income and Assets are Not Equal!
Up to 6% of a parent’s assets and 22%-47% of a parent’s after tax income (based on a
sliding income scale and after certain allowances) are considered resources
available to pay for college expenses.
Student income and assets, however, are counted at a much higher rate - 20% of
student assets (529, savings, trust funds, etc.) and 50% of a student’s income (after
certain allowances). Keep this in mind if your student works and saves for college
expenses!
Each college offers different packages based on this formula:
[Cost of Attendance] – [Your EFC] = Financial Need
Cost of Attendance includes: Tuition, fees, room and board, and books.
FAFSA4CASTER
You can’t begin your FAFSA until October 1
of your senior year, but there is a way to get
an idea of how much federal aid you may
qualify for. The FAFSA4caster can be
completed at any time and should give a
fairly accurate estimate of the aid you may
qualify for, including Stafford loans, federal
work-study and federal Pell Grants.
www.studentaid.ed.gov/sa/fafsa/estimate
Source: www.savingforcollege.com
www.potentialmagazine.com
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