<p>Medical expenses…my guess is they would have to be high medical expenses for it to make a difference on the calculations. If it is for something like hospitalization without insurance…that you paid out of pocket, or some expensive medical treatment out of pocket that was essential, it would be different than getting a pair of new glasses, or buying OTC medications.</p>
<p>Catastrophes, and medical situations for expensive chronic health care issues, disabilities are examined on a case by case basis by the financial aid directors. They use what is called Professional Judgement, It varies from school to school as to what the adjustments, if any would be. It even varies case by case at the same school. </p>
<p>Every Friggin’ Cent is what the EFC calls for, it seems, doesn’t it. </p>
<p>Then if you have fill out CSS PROFILE you really begin to see what a close exam is .</p>
<p>cptofthehouse-- Are you sure HSA contributions are added back in to income on the FAFSA? (post #11) I know that the CSS Profile asked about HSAs last year, but not FAFSA, as far as I know. And I don’t think HSA distributions are counted as income, but I don’t know that for sure.</p>
<p>I think that non-voluntary pension contributions, which these days I believe are mostly public employee pensions, are considered to be similar to FICA taxes, which provide you a “pension” and health care when you are retired. I believe most if not all public employee pension plans that require forced employee contributions do not pay FICA taxes.</p>
<p>The FAFSA calculations deduct FICA taxes paid from your income, which nets out to roughly the same as not having involuntary pension contributions count as income.</p>
<p>The vertical/horizontal equity issue is the one I find the most unfair.</p>
<p>Great posts, cptofthehouse. It’s particularly unfair to older parents staring retirement in the face and trying to put kids thru college. If your 401k took a hit in the last decade you should be playing “catch up” with your 401k contributions and taking advantage of the higher contribution limits for people over 50 but if you do you’re screwed by FASFA and CSS profile.
So, save for retirement or pay your child’s tuition? Tough choices for the middle class.
I am in for it this year because I was laid off and got a severence package so my AGI will be higher in 2013 than it usually is. I was lucky enough to get a new job,but it was for 20% less pay. My only consolation is that in 2015 my son should get more aid because of my lower salary.</p>
<p>I received a severance package in 2010, so I had my highest AGI the year before my older child applied to college. I work in IT and was able to get hired as a contractor and eventually as an employee.</p>
<p>It is more important to save for retirement than pay for college. I’m also making the “catch-up” payments, for those 50 and older. My younger daughter is applying and I am a little behind on finishing my CSS profile. However, I am very aware of how much stronger my retirement savings are three years later.</p>
<p>Do bear in mind that it’s not that you are penalized for putting money into a 401 K or HSA or any such qualified plan. It’s just included as income. You don’t get the tax deduction you get from the IRS or the state. There is also the hidden kicker that because you reduced your tax bill, your tax bit will be less, and income taxes are subtracted from the income figure for fin aid purposes. Once the money is contributed into the account, they do not count as assets, nor is interest and other earnings on it counted while in that account. </p>
<p>Some 401 k plans do permit loans, and that may be a way to go too.</p>