<p>I just filed my fafsa and it gave me an expected efc of $34,000. I was not expecting such a high EFC because my parents make only around $80,000 a year combined. However, our assets are fairly high, mainly through investments. How does this affect the EFC? Is there any way that this can possibly be lowered, or are we stuck getting pretty much nothing as far as financial aid goes?</p>
<p>Depends how high the assets are.</p>
<p>There is a certain amount of asset protection in FAFSA. Primary home is not included. Money in retirement accounts (IRAs, 401ks etc) are protected. There is also an asset protection allowance which varies according to the number of parents and the age of the oldest. After that @5.6% of assets go to the EFC. For the student portion of the EFC 20% of assets in the students name go to the EFC and 50% of student income after the protected income allowance of $3070 also goes to the EFC.</p>
<p>If your parents assets are not in the primary home or in protected retirement accounts (they have to be retirement accounts - not money set aside for retirement in other investments) there is not really anything you can do.</p>
<p>I never understand why people say they use 5.6% in the assets calculation.</p>
<p>I'm looking at the formula. (Assets - asset protection)* .12 is what I see . <a href="http://www.ifap.ed.gov/eannouncements/attachments/0809EFCFormulaGuide.pdf%5B/url%5D">http://www.ifap.ed.gov/eannouncements/attachments/0809EFCFormulaGuide.pdf</a>
see page 9</p>
<p>Of course the asset protection for a single parent (like myself) is about 60% less than a 2 parent family. see page 19</p>
<p>swimcatsmom: are you sure primary residence is not included? I thought they asked for purchase price, date of purchase, current market value, and mortgage amount.</p>
<p>federal methodology ignores the house value.
Institutional methodology uses the house value</p>
<p>Caleno - I was only referring to the FAFSA as that is what gigidaisy was asking about. CSS profile was talking about.</p>
<p>Sue - see my post in this thread <a href="http://talk.collegeconfidential.com/financial-aid-scholarships/454210-fafsa-parent-contribution-assets.html%5B/url%5D">http://talk.collegeconfidential.com/financial-aid-scholarships/454210-fafsa-parent-contribution-assets.html</a></p>
<p>about where the 5.6% comes from</p>
<p>Oh - just looked at that thread and Saw your other post Sue - but I will leave the link in case anyone else is wondering.</p>