<p>I don't understand why employer contributions to a retirement plan should be considered income, no money in the retirement plan is part of fafsa.</p>
<p>I don't understand why every penny (albeit pretax income) I put into retirement is added back into the income for fafsa (would make sense to add in the amount of tax savings I realized on that income put into retirement).</p>
<p>I completely agree there are a lot of what the hecks when it comes to financial aid.</p>
<p>I just really want to know the reason for the asset protection difference for single and married parents. even 50% makes more sense than 40%.</p>
<blockquote>
<p>Why should workers covered by a defined benefit pension have those employer contributions excluded from income while at the same time a person with no DB pension has 401(k) money added back to income?>></p>
</blockquote>
<br>
<p>Because choosing the 401K is just that...a choice. Folks with defined benefit packages have to contribute whether they want to....OR NOT.</p>
<p>It just so happens that the two types of 'retirement plans' are differentially treated by fafsa. If one works for the government say (or UAW), the retirement pension grows every day one is on the job. But, that "choice" is made through collective bargaining. The workers (collectively) CHOOSE have thier employer contribute to their retirement by taking a lower salary in the job. They could just as easily CHOOSE to vote for zero pension but more salary, or more health care dollars, or a car allowance, or whatever they could get in return for zeroing out a defined benefit pension plan; the employer is somewhat indifferent to these individual choices bcos its the total cost of the worker that matters to the bottom line.</p>
<p>My husband does temporary work and will be unemployed by the time we complete the FAFSA. It looks like we are supposed to contact the financial aid offices of the schools my S is applying to. Any experience with how that goes? Does it depend entirely on the school?</p>
<p>"New for 2009-2010: The CCRAA extends the time that an individual who received benefits
from a means-tested Federal benefit program can qualify for a simplified EFC formula
calculation from 12 to 24 months."</p>
<p>it means that in order to qualify for the simplified formula you would have to be getting those federal means benefits for 24 months by the time you apply for federal assistance. so if you have received the benefits for 23 months, you do not qualify for the simplified formula.</p>
<p>A federal means-tested benefit is TANF, WIC, food stamps, SSI, or free/reduced lunch.</p>
<p>SNM, the new FAFSA has a question regarding workers who have lost their jobs. I am not sure how individual schools will handle this ... our school hasn't even discussed it yet. There are a lot of changes for next year, and schools will have to make some changes, too.</p>
<p>The teacher question - public employees in Ohio, including teachers, are required to contribute a percentage of pay to the state pension plan. There is no choice and it has nothing to do with collective bargaining. This is true of schools, libraries, county workers, etc.</p>
<p>SNM, there are MAJOR changes to the FAFSA this year. There is an entire section that addresses employment status. Those who are unemployed (and it clearly states only those who are unemployed NOT by choice) can check a displaced worker box.</p>
<p>It has everything to do with collective bargaining. All union members HAVE a choice: they can vote the pension (and contribution) out if they so desire.</p>
<p>But, again every $100 your teacher mom (and thumper) put into a pension is exempt from fafsa, correct (this is a question bcos I don't really know), but that same $100 put into a 401(k) pension by a different teacher is added back to fafsa. Thus, the same $100 for retirement in is treated differentially by fafsa -- great if you are a government employee-union teacher but not great if you are non-union preschool teacher.</p>
<p>thanks for the clarification on the federal means tested benefit issue in a previous post, kelsmom. i was not quite sure on that one. thanks again!!</p>
<p>Thank you for posting this. It is very difficult to find any official information about simplified needs test and automatic zero efc. I have been looking over the paper version of the fafsa and it isn't very clear about if you are eligible for either of these and which questions you can skip (presumably the questions about investments). Interestingly, it appears that a CD is considered and "investment" but money in a savings account is not..I also don't see any question about being a displaced worker on the fasa...</p>
<p>Whether you can skip the questions can vary by State. For instance we had to complete the Asset information last year even though we qualified for the automatic zero. Other people have posted that they do not have to enter the information.</p>
<p>Money in a savings account would go under cash and savings account. CDs under investments. They are all treated the same, as assets, by the formula so I don't know why they are even listed separately.</p>
<p>The old FAFSA (2008-2009) did not have a dislocated worker question. I am not sure where it will be listed on the new one. There is a draft version floating around somewhere. I will see if I can find it.</p>
<p>google FAFSA on the web 2009-2010 and you should find a link to a powerpoint (I can't post a link because it just goes straight to downloading a power point). Page 28 has info on the dislocated worker rules.</p>