<p>So i was chosen for Fafsa verification and i handed in all the forms the college requested... so today i got a email saying the college has made changes to my Fafsa app, so i checked it and notice my EFC has increased. I checked what they changed and it was "parents net worth of current investments" the thing is my parents dont have any investments... we only have a house that we have mortgage on and i dont think that counts as an investment...so am i wrong or its the college's mistake?</p>
<p>Time for a phone call to them.</p>
<p>they are closed already… and they dont open tomorrow</p>
<p>Then call them on Monday.</p>
<p>Does either of your parents have a common name? Is it possible that the assets of a relative with the same name were “found” and thought to belong to your parents?</p>
<p>Or…are you sure that your parents don’t have any assets other than their home? Any Savings? Any investments?</p>
<p>Do they contribute annually to a 401k? If so, the money that they put in for 2009 would get added back in…but I don’t think that’s under assets. </p>
<p>What was your EFC before and what is it now?</p>
<p>Are you an incoming freshmen? What school is this?</p>
<p>Do you live in the house? Only a house that is your primary residence is exempt from being reported as an asset.</p>
<p>Do your parents taxes show income from sources other than work? If there is anything like rental income or dividends then that may have cause the school to believe there are assets that were not reported. </p>
<p>Or it could be a mistake.</p>
<p>Only they can really tell you.</p>
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<p>If this house is NOT your primary residence, then it would count as an asset.</p>
<p>Did you list a house on your FAFSA form? Your primary residence is NOT listed on the FAFSA…there is no place to list it.</p>
<p>If this house you mention is some kind of rental property or another residence that your family owns, then value of that would need to be accurately reflected on your FAFSA.</p>
<p>If it’s your family’s home only…call the financial aid office. Perhaps you made the mistake by listing this property to begin with.</p>
<p>@thumper1
The house is our primary residence and list a house on my fafsa form? i put the address of the house does that count?</p>
<p>No the address of your house would not flag this as an asset. Your primary residence is NOT listed financially on the FAFSA at all.</p>
<p>If you really don’t have any other assets, call the school. Sounds like a mistake was made. Check your online FAFSA line by line to see where the change was made…just to be sure.</p>
<p>@mom2collegekids - how do 401k contributions affect EFC? Thanks so much</p>
<p>401k contributions are added back to the AGI by the EFC formula, so increase income. The money in a 401k is not counted as an asset, but current year contributions cannot be used to reduce income.</p>
<p>Thanks so much- so using round numbers if you make $100,000 and make a $15,000 contribution to a 401k even though your AGI for tax purposes is $85,000, FASFA and the Profile considers your income as $100,000. Do I have this right?</p>
<p>Yes, that is correct for FAFSA. I don’t know for profile.</p>
<p>Did your parents report any interest or divident income on their taxes last year? It sounds like the school may have added an imputed value if there were no investments reported.</p>
<p>It sounds like the 401k contributions for 2009 are the problem. </p>
<p>If your parents contributed about $15k to their 401ks last year - which increases their AGI from about $75k to 90k, then you could see about a $5k increase in your EFC.</p>
<p>The OP never said anything about a 401k contribution - that was a different poster.</p>
<p>^^^</p>
<p>Thanks…I missed that it was a different poster. </p>
<p>*Did your parents report any interest or divident income on their taxes last year? It sounds like the school may have added an imputed value if there were no investments reported. *</p>
<p>What exactly does that mean? Does that mean that the college just assumed that the family “should” have some interest income from savings/investments - even if there are no savings/investments?</p>
<p>Did your parents cash in any savings bonds? When that happens, usually there is a huge chunk of interest, especially if the bond has been held a long time. So lets say that someone cashes in $10,000 worth of bonds, and $4000 of that is interest. They receive a 1099 on the interest and report it on their taxes. </p>
<p>The college looks at their tax return and sees $4000 of interest, but doesn’t know that it is from a cashed-in savings bond. So the college figures, well… it would be tough in this economy to get more than 2% interest on a money market fun, so in order to get $4000 interest, the family must have $200,000 socked away in a bank somewhere. </p>
<p>Of course that is not true – the parents in my example had assets – savings bonds – worth $10,000 – and now their assets are -0- because they cashed in the bonds.</p>
<p>I think the bond problem comes up fairly frequently, because very often the bonds were the parent’s college savings plan. Plus, if times are hard, that’s when people are most likely to cash in their bonds.</p>