Hello, recently I have encountered a problem that has been bothering me ever since. When filing for the FAFSA I did what it told me to do and put my parents’ combined AGI which is around 95,000. Now, this number surprised me because it certainly doesn’t feel like we’re living on 95k a year. So I added my parents’ pay stubs and came to around 70k…
Why is it that universities and FAFSA take AGI into account when that’s the amount before deductions? My parents are actually left with a considerable amount less than the AGI says. The AGI and the actual number could disqualify me from a lot of things like the Blue and Gold Opportunity Program at UC’s which requires an income of less than 80k.
I’d really appreciate it if someone could help me because it seems as though everywhere I go, applications want AGI when we don’t have that many. Is there a way to tell the financial aid office that we don’t have the money that AGI seems to say we have?
No one ‘has’ the AGI - everyone has to pay at least the 7.65% employment tax. Then there can be federal and state income tax, health insurance, 401k coming out as well. That’s just the way it is.
@madison85 so basically what you’re saying is that I have to deal with being disqualified from certain programs and receive virtually no financial aid based on a fake number and money that we don’t have?
The fafsa formula takes into account the amount of federal taxes your parents pay and subtracts that from AGI. There’s a question for federal taxes paid. When you add up net pay from the pay stubs the amount of tax withheld is being subtracted. Most people pay less tax than what they had withheld so they get a refund of some amount. There’s also a table in the fafsa formula that gives some credit for state taxes paid. And the fafsa formula gives credit for social security and medicare tax paid based on your answer to the father’s and mother’s income from work questions. Some deductions are considered optional, like 401k contributions, so are asked for and added back to AGI in fafsa.
Schools that use profile or their own finaid forms likely do something similar though they don’t share their formulas.
But yes, for Calgrants the cutoff is AGI and asset based. The family with an $80k AGI has less than that as take home pay too, maybe in the $60k range.
As Madison85 says, everyone is in that boat with you so to some extent it evens out for families at each AGI level.
@thumper1@madison85@annoyingdad thank you for your replies. Now that my initial question has been cleared, do any of you think I’ll be be eligible for ANY sort of aid by UC’s with a 95k AGI? It seems as though every possible aid I research I’m deemed ineligible. Of course my parents are going to contribute to the best of their ability but an EFC of $18k per year seems way too high for a family that takes home only 70k per year which is an amount, according to Madison, the financial aid offices are well aware of despite the AGI.
I don’t know about other people but every single time I do our taxes I think, “No WAY did we make that much money.” And that’s because with health insurance premiums, mandated state retirement contributions, social security, and everything else that’s deducted, we only have about 65% of that to spend. Over 30% of this money we never even see. This is normal.
In 2010, my family’s AGI was $50,000 and we paid $13,000 out of pocket for our older daughter’s college. It was rough and I didn’t like it, but we did it.
@thumper1 The only CSU’s I’d be interested in going to are SDSU, SJSU, and Cal Poly SLO as I applied to only those. But I really would prefer to go to a UC…
AGI should be equal to or less than the real income. It takes into account other income and unearned income. If the amount in W2 is less than the AGI, that means there may interest, capital gains, etc. It is not an artificial number. If your AGI is $95k, you do have at least this much pre-tax income.
@thumper1 commuting isn’t an option. None of them are close enough for an easy commute. The closest UC and CSU are both about an hour and a half away.
When I do the NPC for UC’s, it tells me that they’ll give me an $8k grant based on the income. Then the 5500 loan lowers that to 19500… Maybe work-study, some outside scholarships, and then my parents contribution can make it work…
@billscho there’s no way it’s equal to or less than the real income. The other posters in this thread have already said that it’s normal for it to be much higher and I literally added my parents’ pay stubs myself. There’s no way there’s 25k unaccounted for.
