<p>I'm the parent of a college bound senior. I filed the FASFA out for my daughter very early in Jan. once my tax papers arrived and I completed my taxes. I went back to the FASFA and made my small adjustments, my AGI actually went down just a little bit, however I entered the amount I contributed to my 401K last year (its not very much just short of 2K) and I was very suprised that this seemed to increased the EFC by almost 2K? Does this sound right? The only changes I made were to lower my AGI and add in my 401K contribution.</p>
<p>Yes that sounds right. While 401ks are nor reportable as assets the contributions for the year are not allowed to reduce income. So in the EFC formula they are added back to the AGI before the EFC is calculated.</p>
<p>^^^</p>
<p>that’s right, but it does seem odd that adding $2k resulted in an increase in EFC of $2k. </p>
<p>Does the system assume that every dollar put into a 401k account could be available for schooling?</p>
<p>Yes it should not be a dollar for dollar increase (got to start reading posts more carefully or not answering when I am short of time). That is strange. There *must *be something else different in there. </p>
<p>Did you perhaps chage they type of return when you actually filed? When income is <$50k eligibility to file a 1040a or 1040ez can make you eligible for the simplified neeeds test where assets are ignored. If you initially had 1040a/ez and changed to a 1040 then assets may have been included in the calculation where they were no before.</p>
<p>Also if you changed AGI did you change tax numbers? Taxes are an allowance against income in the EFC formula so if you changed them then that would change the EFC. (If they were lower than the allowance against income would be reduced, increasing the EFC)</p>
<p>The other thing is did you change the number for income earned from work? That also affects the EFC (it is used to calculate an allowance for FICA).</p>
<p>Swimcatmom,</p>
<p>I’m not sure what you mean by change the number, but what I did was where it said Income (AIG) or whatever: $xx,xxx I put the new lower vlaue in the change colum next to the origional number. Then I put what I contributed to my 401K in the change column of that item. Previously I had a 0 there…That might explain it.
I’ve printed out your responce and will look at it when I get home tonight again.</p>
<p>I guess the Government feels if you can contrib to your 401K you can spend that same amount for college. Guess I’ll really get the picture when Aid letters start comming in.</p>
<p>Thanks for your help!</p>