<p>When we filled out the FAFSA, my husband listed his 401K/profit sharing amount, and it's not some great huge amount, I think it's around $125K, but he can't even touch it, except for an extreme hardship. I thought when he filled everything out he should not have listed it as an asset, that it would hurt. He thought he had to put it so he did. Our family income is between $68-85k a year (depends on the year). We had an EFC of $21,000. Do you think listing the 401K amount hurt, or does this just sound right, $21,000 EFC? I just can't imagine how we would ever realistically be able to pay that much without taking out person loans, which we are not prepared to do. My D got a great scholarship offer from Simmons College, but with R & B it would cost us about $21,000 and she would have the max amount of loans that she could take. Luckily, she has a better back up, two in fact, that are doable, but I am now just wondering if listing this $125 as an "asset" the way he did screwed us up.</p>
<p>Balances in retirement accounts such as IRAs and 401ks are not reportable assets on FAFSA. I am not sure what the profit sharing is - if it is part of a 401k then it is not reported.</p>
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<p>Current year contributions to retirement accounts (other than Roth accounts) must be reported as untaxed income and will be added back to the AGI in the EFC formula. But the asset itself is not reported. Retirement accounts are protected assets.</p>
<p>Parents also have a certain amount of asset protection based on the number of parents and the age of the older parent. After that 5.6% of the assets go to the EFC. So the 125k may have added up to 7,000 to your EFC (probably less if you have no other assets).</p>
<p>Log back into the FAFSA and exclude the 401k plan balance by doing a ‘correction’.</p>
<p>it appears as though your qualified plan accounts were reported as assets that were included in your EFC. So redo and ask for a recalculation of need. If the schools do not guarantee need , it may not make any difference in their packages. But it is worth a try.</p>