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<p>How did you contribute $32,000 with an income of only $49K?</p>
<p>It sounds like this is a FAFSA only school (doesn’t use Profile or a school form). That being the case, your full financial need likely would not be met. It likely will not get met in future years.</p>
<p>As an anecdote, DS went to a school that did not meet full need. When his EFC halved (due to his sister’s enrollment in college) the school gave him $250 additional grant aid…hardly enough to match the $25,000 change in his family contribution. </p>
<p>Re: your contributions to your retirement…those would have counted as income for 2011 on the FAFSA regardless of whether you put them into a retirement account…or not.</p>
<p>Question to others…is the FAFSA4caster the online calculator that has not been updated to reflect the current formula? I think so.</p>
<p>Without additional discussion, it’s impossible to reconstruct the OP’s financial situation. Barring a mistake on the FAFSA, the EFC is correct. His AGI for 2011 is in six figures AFTER the tax exempt contributions have been taken out. When filing FAFSA, they will be added back for an even larger income figure. The OP clearly has income other than from his job, so that he can put away a lot of his salary into savings plans. I think what he and possibly the calculator, is not taking into account is the add back of those amounts which are significant. </p>
<p>Although income and asset market value from accounts such as 401K and other tax exempt vehicles are not included in FAFSA calculations, the contributions are still included as income. Once the contributions are in those accounts, they don’t count any more, but the year you receive them and make that contribution, they are noted as what you did get in pay.</p>
<p>Thanks for all the feedback.</p>
<p>My comment about my salary only being $49k confused some readers who thought that was our only income from work. My wife also brings in income from work so our combined income in 2011 was $103k.</p>
<p>I wish I had known that shoveling $32k into our 403b’s wouldn’t have protected it from the FAFSA fascists unless done in 2010 or earlier.</p>
<p>I also wish I had known that accounts in the children’s names are hit much harder. These accounts were opened by well-meaning grandparents. Now we all know better. <if you="" are="" a="" grandparent="" reading="" this,="" it="" is="" better="" to="" pledge="" help="" than="" give="" before="" needed.=""></if></p>
<p>Some posters allude to other assets that we must not be including, but all of these other assets–home, Roths, 403b’s–are not used in the FAFSA formula.</p>
<p>Anyways, we recalculated our EFC by hand and got $43k instead of $48k. This means that the FAFSA4caster is not useful to everybody. We are still curious about how the FAFSA EFC could be $5k higher than our manually calculated EFC.</p>
<p>Call a college and go over the numbers with a financial aid officer. Easier that getting a Fafsa person ,which I don’t even know if one exists. . The 403b funds are now protected but any contributions to such funds are added back to income in the year they are made. Just the way it works. </p>
<p>I don’t know how much the difference is going to mean since few schools will give full need on FAFSa anyways and unless your child is PELL eligible, there really isn’t much real money out there from the governmet. And if you think the fin aid officers at FAFSA schools are facists, wait till you meet the PROFILE crew. Hang on to the gold and silver in your teeth!</p>
<p>OP-I know something that may really affect you. This ocurred in my situation several years, and it was particularly horrible S1’s first year, as he applied to 11 schools, and some kept changing his FAFSA, then another would change it back. It was a nightmarish merry-go-round.</p>
<p>What number did you use to calculate “wages earrned from work”? This is the number that drives the FAFSA FICA deduction. Therefore, it <em>should</em> be box 3 of your W2 form, social security wages. This number would include your taxable wages PLUS your 403B contributions. 401/403 contributions are exempt from income tax, but they are subject to FICA/medicare.</p>
<p>However, FAFSA instructions are not clear and many schools will change your FAFSA to use box 1 of the W2 as wages earned. It can make a significant difference when the contribution has been large. In a circumstance like this, you will get much less of a deduction for FICA paid.</p>
<p>When I have called FAFSA, I have gotten clerk level people who are fairly scripted. You should be able to figure out exactly where your difference is, but at that level, I’m not sure it’s going to make any practical difference in (lack of) aid.</p>
<p>“FAFSA fascists”? Really? Your income is considered upper class but you are looking for aid this year? Wow</p>
<p>You’ve done a good job saving for your kid’s education. But you did a poor job planning for it with your assets and income.</p>
<p>FA is not an entitlement.</p>
<p>Lynch112 -</p>
<p>That you and your spouse were able to save 32k before tax and another 12k after tax in retirement vehicles last year tells me that you are more than capable of making your children’s educations possible. If you only save the minimum required to get any matching funds from your employers this year, you will have what, 20k or so? Add in one quarter of the total war-chest of you son’s (another 12.5k), and a freshman year Stafford Loan (5.5 k), and you will have 38k. Granted, this isn’t the full EFC, but nonetheless it is a serious chunk of change that will pay for every in-state institution that I know of. It will cover a whole bunch of OOS and some privates as well. You and your family are in a truly extraordinary condition, and should be patting yourselves on the back!</p>
<p>Now that you know the reality of the numbers, you will be able to come up with good plans for both of your kids.</p>
<p>I agree with Happymom. And I congratulate you in your successful savings. I envy the discipline you have.</p>
<p>Never put money in kids names. Have grandparents or an aunt hold onto it. My kids have money in their name. We have an agi of 116,000. EFC is 15,000.</p>
<p>I mean. They dont have money in their name</p>
<p>* We have an agi of 116,000. EFC is 15,000.*</p>
<p>?? With how many kids in college? It’s very hard to believe that your EFC could be THAT LOW if you only have one in college. If you do only have one in college, prepare for an adjustment or a discovered mistake. I can’t think of any scenario where a family with an AGI of $115k (with one child in college) could have an EFC that low.</p>
<p>Now, if you have two in college, then your “family total EFC” would be $30k, which is more in line with what would be expected.</p>
<p>^^ I second Mom2s comment. EFC is primarily income driven unless there are considerable assets. An AGI of 115,000 and an EFC of 15,000 sound very wrong unless there is >1 student in school at the same time.</p>
<p>Iron Maiden beat me to it (post #27)! </p>
<p>Wonder who the dictator of FAFSA-land is??</p>
<p>^^^</p>
<p>The funny thing is that once beyond Pell limits, there isn’t much to get.</p>
<p>Just as an aside - If you read the instructions to the wages line on FAFSA, the source is:</p>
<h1>Form 1040 Use Lines: 7 + 12 + 18* + Box 14 [Code A] of Sch K-1 (Form 1065)</h1>
<h1>Form 1040A Use Line: 7</h1>
<h1>Form 1040EZ Use Line: 1</h1>
<h1>Tax filers who are not self-employed should only use line 7.</h1>
<p>*Lines 12 and 18 and Box 14 [Code A] of IRS Schedule K-1 (Form 1065) are for tax filers who are self-employed.</p>
<p>Line 7 = Box 1 + Box 8 of Form W-2</p>
<p>We have an agi of 116,000. EFC is 15,000.</p>
<p>Unless you have 9 or 10 kids & half of them are under 10, there is a mistake somewhere.</p>
<p>FlMathmom–go ahead and input an example and do the math. What you posted will result in an incorrect understatement of the FICA/medicare taxes that have been actually PAID. FICA/medicare taxes are collected on amounts contributed to retirement accounts.</p>
<p>Sryrstress - the FICA/medicare tax number will also be wrong if someone gets disability income from an employer (otherwise called long-term sick pay) which is only shown in box 1 as wages, but is not subject to social security taxes. </p>
<p>On the FAFSA form, there are instructions for each line number. Regardless of whether the instructions make sense, you are expected to follow them as defined. When your FAFSA is verified by a college or the numbers are imported from your tax return, these rules will be followed. If you think the calculation misrepresents your financial situation, you can present your case to your child’s school’s FA professional. </p>
<p>BTW - I have had several conversations with the staff at FAFSA and found them most helpful. They can’t change the rules or explain why they are what they are, but they can help explain how to determine an answer.</p>
<p>@FIMathMom, Your instructions are exactly the same I found in the FAFSA site, but my Business Income is reported on line 17, not 14 and my K-1 is form 1120S, not 1065, which is for Partnerships. I can’t imagine that a Partnership must include that income but S-Corp’s don’t. However, my S-corp income is included in the AGI.</p>
<p>The problem I have is my Health Insurance and HSA contributions are included in my W-2, Box 1 income but excluded from the Box 3 amount. These amounts are adjustments to income in 1040 Lines 25 & 29. Do you know how these affect the FAFSA EFC? I saw one post saying to use Box 3, but I don’t think that is correct.</p>
<p>Also, I’ve seen in this Forum that FAFSA adds the contribution deduction to a regular IRA back into your income to determine your AGI. Using that logic, shouldn’t a taxable distribution from an IRA be excluded from your AGI? I see the FAFSA form asks for the amount of untaxed IRA distributions, but not the taxed portion. It seems they would be counting the same income twice.</p>