<p>Can someone explain this?</p>
<p>Every dollar a child makes in income above $6,130 (the limit for 2013-14 aid) cuts their possible award by 50 cents.</p>
<p>So is this the spring of junior year/fall of senior year that would be counted? Is this true? For ever dollar the student makes - subtract (taxes) and then another .50 in aid?</p>
<p>Also - I read that Pell Grant or Stafford loan amounts go up after Freshman year? Is this true?</p>
<p>thaniks.</p>
<p>Pell Grants don’t change but Stafford amounts do go up.
Fresh - $5.5K
Soph - $6.5K
Jnr - $7.5K
Snr - $7.5K</p>
<p>I believe the income is not 50% over the protected amount but 20% (but I’m sure someone will correct me if I’m wrong).</p>
<p>EFC goes up by 50% of income over the protected student allowance. (The 20% is the percentage of student assets that go to the EFC). The exception is if the student qualifies for the automatic 0 EFC, in whiach case the student income and assets are not considered (currently requires parent AGI <$23k plus meeting some other criteria).</p>
<p>It is based on the tax year required for the FAFSA being submitted. So 2012 for the 2013-2014 FAFSA.</p>
<p>Whether it will actually reduce aid will depend on what aid you qualify for and whether the school meets full need.</p>
<p>Swimcatsmom, maybe you can translate this: <a href=“http://ticas.org/files/pub/IPA_Rollback_in_House_FY13_Budget_06-18-12.pdf[/url]”>http://ticas.org/files/pub/IPA_Rollback_in_House_FY13_Budget_06-18-12.pdf</a></p>
<p>My impression is, earn beyond the student Income Protection Allowance and the hit may be 20%, but the “feels like” is more. Eg, earn 7130 and that 1000 “gross/pre-tax” excess is not only assessed at $200, but also cuts into aid. ???</p>
<p>No, I can’t interpret it at all.</p>
<p>Where do you get the impression it is 20%? The 50% of student income over protected allowances (with allowances for taxes/FICA) comes direct from the FAFSA EFC formula. It has been 50% of income for as long as I have been involved in doing FAFSA FAFSA, and 20% of assets for the last few years (was 35% of assets till about 5 or 6 years ago).</p>
<p>The current EFC formula is here:
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/010512EFCFormulaGuide1213.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/010512EFCFormulaGuide1213.pdf</a></p>
<p>The page 10 worksheet shows .50 of student income and .20 of student assets.</p>
<p>So if income is 7150 and the allowance is 6000 (current year), the remaining 1150 in excess of the income allowance would get an allowance for taxes and FICA, say 150 to make it simple, That would leave 1000 available income. .50 of that would go to the EFC - 500. Not 200.</p>
<p>looking forward - I just read through your link more closely. The paper is talking about proposed *reductions *in income allowances and the impact they would have. According to the paper they are talking about reducing the dependent student income allowance from $6130 to $3380. That would mean if the student earns 6130, instead of it all being protected income, 2750 would now be unprotected with some allowances for taxes/FICA. According to their calculations, the EFC would go up by 1100 reducing the Pell from 5320 to 4220. </p>
<p>The 21% they refer to is *not *the percentage of income going to the EFC. It is the percentage the Pell has been reduced by 1100/5320 = 21%.</p>
<p>The paper is not to do with how much income over the protected allowance goes to the EFC. It is to do with drastically reducing the protected allowances and the impact it would have on a student who works. </p>
<p>I wonder if this is actually something in the works.</p>
<p>Thanks, I see my confusion between assets and earnings.</p>
<p>swim, I hope not- especially with the decrease in auto 0 EFC. IMO, it is poor students who have to work full time or close to full time that would be greatly screwed over by that rule. If that had been implemented this year, along with the reduction in auto-0 EFC, I would have likely been out of Pell range.</p>
<p>It’s also worth noting that work-study income if applicable, is not counted in that income protection and it doesn’t go towards your EFC.</p>
<p>Ok - guys - I am not tracking.</p>
<p>Can I give parameters?</p>
<p>EFC is zero.</p>
<p>IF the student works more than the allowed amount - which is currently 6000 - pell aid is reduced or stafford, or what? and how much?</p>
<p>thanks.</p>
<p>It depends.</p>
<p>If the EFC is 0 because the student qualifies for the Automatic 0 EFC, then his/her income will not be taken into account at all. (currently the auto 0 requires a parent AGI of <23,000 and meeting one of the other criteria. But it changes every year - last year the cut off was 31,000 so it dropped considerably).</p>
<p>If the 0 EFC is not from the automatic 0 special formula, then student income assets/income will be taken into account. That means any 50% of any income over 6,000 (less allowances for taxes/FICA) will go to the EFC. So if the student earned 8,400 the unprotected income would be 2,400. Say 400 is allowed for taxes and FICA, that leaves 2,000. The EFC would be increased by .50 of that, so 1,000. (also, any assets the student has on the day FAFSA is filed will add 20% of their value to the EFC unless he/she qualifies for auto 0 or simplified needs)</p>
<p>The pell is based on the EFC. As the EFC goes up, the Pell goes down almost dollar for dollar (actually in something like $50 blocks). So is the EFC goes up by 1,000, the pell would go down by around $1,000.</p>
<p>But they change things every year. From the link looking forward posted, it looks like they may be considering cutting the protected student allowance.</p>