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Actually, I don’t think that is the case, because there is no way that the college financial aid office would have known about the work-for-tuition arrangement from the FAFSA or the standard CSS Profile questions. So unless the OP volunteered that information somewhere along the line, that is unlikely to be the basis for the financial aid calculation that was so upsetting when it arrived last week.</p>
<p>The issue of the attributed income came up when the OP posted a draft of a proposed appeal letter, and posters on this board pointed out that it was not a good idea to volunteer information about that arrangements, because it could be construed as representing an additional $21K of annual income. </p>
<p>I still think that the OP’s problem is more likely due to an attributed asset value, based on the $32K of income from investments. I pointed out the specific document provided by the College Board that encourages financial aid officers to make such an attribution. Based on what the OP told us, the entire $32K would have shown up on the tax return as being “interest” income – and at current bank rates, it is difficult for even large scale investors to earn even 2% in CD or Money Market accounts. Large investors would more likely opt for bonds, but I think the return on bonds would be reported as dividends rather than interest.</p>
<p>The OP has told us that she has “friends” who took her money as a “loan” and are paying 10% interest – but I don’t know whether (a) she provided that information to the university financial aid department, or (b) whether they believe her, even if she did provide that info. The arrangement is odd enough that I would think any financial aid officer looking into it would ask for documentation, including copies of the promissory notes. </p>
<p>So basically the mom has $300K worth of assets - after deducting the FAFSA asset protection allowance ($20,300 for a parent age 58) – that leaves $279,700 in assets, which would add $15,663 to the parent’s EFC. The income protection allowance for a single parent, with one kid in college, is $16,230, so if you subtract that from $32K worth of income, you get about $3500 from income in the EFC. (Formula: $3,190 + 25% of Adjusted available income over $14,500). So, leaving aside other issues, such as the daughter’s social security benefits, we’ve got a parental contribution of over $19,000 just based on the assets & income. </p>
<p>The mom also told us she is a homeowner with $100k of equity - so you can add another $5600 and now the figures inching closer to $25,000. </p>
<p>But she wrote in the first post that “Our FAFSA EFC was under $4,000. They want me to pay $51,000.” </p>
<p>That makes me think that she didn’t list her assets in the FAFSA<em>, so the FAFSA EFC was based on income only. (</em>It’s possible that her current income fell into a range that the online FAFSA would allow her to skip the assets question; or alternatively, it’s possible that she didn’t see the outstanding debt owed to her as an “asset” as it is not money in the bank. In any case, it’s clear that the FAFSA didn’t take into account the $300K). </p>
<p>Based on what the OP told us, we need to figure where the other $26,000 comes from ($51K that the U. wants less the $25K that the assets as stated by OP would yield). Even if the U. was looking at her $21K tuition benefit as income, that wouldn’t raise the EFC by $26K – so it doesn’t answer our question. However, $465,000 in assets WOULD raise the EFC by that amount – and the university could have gotten pretty close to that figure by assuming a 4.2% rate of interest, which would be reasonable in the current market ($32,000/0.042 = $761,905)</p>
<p>The numbers are more complicated because CSS Profile has some differences in their formula in terms of asset & income protection, so my math above only gives a rough outline of the problem. But it is the first place I’d look.</p>
