<p>I remembering reading about a guideline as to how assests affect EFC. I know that the student expected portion is around 35% and parent 6%. The number or guideline I'm looking for is how much of a decrease in assests results in how much of a decrease in the EFC? I,of course, know that other factors are involved. Thanks for any help.</p>
<p>Here is a hyperlink which might help you...</p>
<p><a href="http://finaid.org/fafsa/maximize.phtml%5B/url%5D">http://finaid.org/fafsa/maximize.phtml</a></p>
<p>Parents get an asset protection allowance of around 50K (depends on age of older parent and number of kids and such). Home equity and retirement savings assets are excluded, as are cars and other physical assets. As a result, few families have any contribution to the EFC from parental assets. For those that do, it's usually a small amount-- about 6% of the amount above the asset protection allowance.</p>
<p>So if your parents (assuming you're the student) have, say, 35K in savings and checking accounts, and non-retirement mutual funds, they'll contribute nothing toward the EFC from their assets, and reducing those assets won't help at all.</p>
<p>The student, on the other hand, doesn't get an asset protection allownce. AND, he gets hit at a much higher rate (the thinking being that he doesn't have financial obligations, other than college). They used to grab 35% of the student's liquid assets (again, excluding car, stereo, retirement stuff, and the like) and add it to the EFC each year. That's changing to 25% in '07. Still, if the student saved, say, 10K from whatever (work, or gift from grandma), the net effect is that it increases the EFC by $2,500, and reduces the potential aid by that amount.</p>
<p>SO-- for every $1,000 you reduce the student's liquid assets, you reduce the EFC by $250, and increase your potential aid by a like amount. </p>
<p>Remember that assets are a 'snapshot' on the day you file the FAFSA. Unlike income, which is pretty much fixed by the time you file FAFSA, student's assets can change to your advantage the day before you file FAFSA.</p>
<p>So if the student who saved 10K decided to buy a used car the day before filing FAFSA, he could decrease his EFC by $2500, and increase his potential aid for that year by the same amount.</p>
<p>Thanks for the information and the link.</p>