Am I correct that it is possible to have our EFC adjusted by the school for high medical expenses? Our efc is 7550. We competed our taxes yesterday and our insurance premiums and out of pocket was 24,000 (family of 4…and this doesn’t include the tax credit as I’m unsure where to find that on our tax forms). I understand that the efc takes into account our self employment but is 24,000 considered high enough to warrant an adjustment.? Is this done through the financial aid office at each school? These medical expenses are not for any major issues, we just live in a state with pretty awful options on the exchange and my younger daughter has medical conditions that require weekly therapy. I appreciate any help or guidance on this issue. Thanks!
Finaid.org has an explanation of the allowable PJ adjustment for medical expenses (keep in mind that schools can do this, but they are not required to do it - if they choose to adjust, these are the guidelines they must work within):
The calculation of the adjustment to adjusted gross income (AGI) is straightforward. The adjustment is equal to the total of unreimbursed medical and dental expenses (i.e., deductibles, co-pays, after-tax insurance premiums, and other amounts not covered by insurance) minus the amount of any medical and dental expenses already deducted from AGI (i.e., above the line deductions for health insurance, such as the self-employed health insurance deduction), minus 11% of the income protection allowance. Any reimbursement of the medical and dental expenses, whether by insurance or a below the line tax credit like the Health Coverage Tax Credit, should be subtracted from the adjustment. Note that medical/dental employee benefits are excluded from wages reported in box 1 of the IRS Form W-2 and so are already excluded from AGI. Financial aid administrators should ask the family for an explanation if it fails to account for an insurance reimbursement.
This yields the following formula:
PJ Adjustment =
medical/dental expenses
- insurance reimbursements
- self-employed health insurance deduction
- Health Coverage Tax Credit
- 11% of the IPA
In other words, it is not just a straightforward “subtract the amount from the EFC.”
Thank you so much for taking the time to provide this information! It is very helpful!
Where do I find our IPA?
Do you have FA offers now? Or are you looking at next year? Schools can do what they want to in terms of granting extra school aid for different situations. So it is going to vary by school.
We are trying to get enough funding to attend UofArkansas in the fall as a new freshman (coa=Around $24,000). The school awarded a 5000 scholarship and we receive a 1000 state scholarship but that’s all that has been offered. Oh and a 5500 loan. It’s completely my fault for not understanding this process and how competitive scholarships and funding can be. I assumed being a minorty, taking AP classes and being an honors grad would be enough, Wow was I wrong! I’m hoping I can just get through freshman year. More funding and departmental scholarships are available in the following years. I’ve left a message at the financial aid office to get information on filing an appeal to look at our medical expenses
Any additional scholarships (departmental, etc) are only in the couple of thousand dollar range. Don’t count on getting well in future years.
To find the IPA, you will need to complete a manual EFC calculation: https://ifap.ed.gov/efcformulaguide/attachments/071017EFCFormulaGuide1819.pdf . Find the formula for a dependent student.
What are the direct costs the University bills you for? Like tuition, fees, room and board.
https://finaid.uark.edu/cost-of-attendance.php
Looks like tuition and fees is about $9,000 and room and board about $11,000. So $20,000 a year.
Then you have $6,000 in scholarship and grant
$5,500 in loan
So $11,500
So you need an additional $8,500
How much can the student earn with a summer job? $2,500?
Does the high school have a list of local scholarships she can apply to? That would help with the first year at least.
How much can you afford to pay?
Your FAFSA income protection allowance depends on number of household members. It can be found in the “EFC formula” published yearly.
https://ifap.ed.gov/efcformulaguide/071017EFCFormulaGuide1819.html
See page 18 of the PDF at bottom of page
I don’t believe health insurance premiums would be considered in this situation.
It’s unreimbursed medical EXPENSES…for essential medical care that would matter.
And the FAFSA for 2018-2019 uses data from 2016. You would need to document unreimbursed medical expenses from that year.
Get all of your documentation of your daughters unreimbursed medical expenses ready…but keep in mind…you are talking about a public university that does not guarantee to meet full need. If your income is high enough…this might nit net younmich additional aid.
But you will never know if you don’t ask!
It might result in a Pell grant, though … depending on what happens to the EFC if the money is removed from income. The PJ would be applicable to federal aid.
Yes @kelsmom…but that all depends on what the income was to start with. They aren’t going to subtract dollar for dollar from the income using the medical expenses…right?
This family is self employed…it’s very possible their income won’t be low enough for a Pell anyway.
BUT you don’t know if you don’t ask.
@“Erin’s Dad” thanks for that information. I was told today that the dept he’s applying for only gives 2 scholarships to freshman and 99% of their scholarships go to already enrolled students but it’s good to know what to expect in that area. I do know that the Arkansas acedmic challenge 1,000 grant will become 4,000 after the 1st year.
@mommdc It’s my son, sorry I didn’t make that clear. He currently has a job so there will be some savings built this summer. He has applied for multiple private scholarships but we haven’t heard anything on any of the as of today. A few we know won’t be decided until June. I also found out he has the option to do work study
I know we can afford to pay some I just don’t have an accurate figure but I’m working on it now. Our medical expenses are going to be even worse this year. 16,000 premiums and 8,000 out of pocket last year and this year premiums, copay’s and deductibles doubled and our coinsurance costs also increased! It’s insane. We have an old car, rent, no credit cards,t but we are hardly making enough to save a dime. It’s only April and we’ve already spent 8,000 out of pocket not including premiums whic are now over 1300/month. Our costs skyrocketed this year and my budget is just no longer working! So that’s part of why I don’t have an answer even though I should. I feel so awful and embarrassed that I don’t know all of this. I’m very thankful for everyone’s help to get us on track.
Also we have a backup option of the Local community college. I’m trying to be realistic yet still push for his choice if it happened to become attainable.
@thumper1 I don’t know, maybe not. Looking at the formula posted above I would think premiums are included if they are going to subtract my entire self employment health tax deduction but I’m unsure. And may be the school doesn’t do it that way anyway. My premiums were 16,000 and my out of pocket unreimbersed expexeses were 8,000. I’m going to apply either way just to be sure.
@jfles00 I’m sorry things are so tough with the insurance.
Could your younger child be covered with CHIP?
You might have to pay premiums (depends on income) but then maybe it would cover her weekly treatments and the rest of the family could be on a cheaper plan?
I think it covers dental as well.
https://www.insurekidsnow.gov/coverage/ar/index.html
Also, are you and your husband both self employed? Maybe it would be worth it to get a job with employer group coverage and that might bring the premiums down?
I would contact the school. They will decide if and how they take the unreimbursed medical expenses from 2016 into consideration, and what documentation they will need. It’s worth a try.
@mommdc Thank you. I also have a chronic health issue and glaucoma so I am also in need of good health insurance. Because of my health issues we cannot shop around for cheaper private insurance. These issues also keep me from working. Before my health issues I was the highest earner in the household and had employer group insurance. We have honestly been looking at moving to another state with better marketplace coverage/cheaper premiums. Which is also a costly option, but at this point I’m not sure we have many options besides moving or just dropping coverage and hoping for the best with self pay. I appreciate the ideas though. I have never looked into CHIP. Ive always assumed our income is too high. I feel like our high income disappears into a black hole. lol I’m sure I can tighten our budget on the frilly things and being more frugal in other areas but its so hard to save anything when we aren’t even 4 months in to the year and already 8,000+ out of pocket for our healthcare. What an awful mess! I talk to fin. aid yesterday about what I needed to provide and I am happy to know they will at least look at what we have and consider it. I am still encouraging my son to work hard on his remaining scholarship applications and the budget work is still happening!
I have high medical as well, and I’m working with each school’s FA office to provide the information they need to reconsider. Some schools wanted 2016 schedule A, one wanted 2017 schedule A.