<p>Having searched for awhile, I've found varying responses. My H and I both have had great years the past few years, and I anticipated that, with some sacrifices, we could pay for S's private LAC. We should still do well enough this year that our EFC would be full freight.</p>
<p>What would happen if, in 2010, one of us lost a job, our income decreased 75%, etc.? Would we have to wait until 2011 to apply for aid? What is the general salary that makes FA $0? S is an only, our mortgage reasonable, 401k's not what they were, but do schools expect you to cash those in to meet EFC?</p>
<p>Sorry - for all the research I've done into the college application process, I've pretty much ignored this until now. Thanks for any help/advice.</p>
<p>Some random thoughts in answer to your questions:</p>
<p>Retirement savings such as 401ks and IRAs are protected in that they're not considered assets in the financial aid formulas. Schools do not expect you to cash them in; they're not reported at all on FAFSA.</p>
<p>Parent income has a much greater influence when calculating EFC than parent assets. Parent assets are "assessed" at 5.6%, student assets at 20%. You can plug 25% of your current income into a financial aid calculator and play with that as a what-if scenario. What I've found in general is that income over $120K or so equals a very high EFC.</p>
<p>I'm in a similar situation as you, cpeltz - income that seems high relative to the US average, and enough savings between 529s and my own accounts so that my son's EFC is greater than the COA. I go back & forth between taking the FAFSA plunge and just saying forget it. But I'll probably go ahead and file FAFSA.</p>
<p>If your income drops drastically over the course of a year due to job loss, family emergency, etc you can always contact the college's Financial Aid office to ask for a review of your aid. How willing they'll be to work with you varies a great deal. Having filed the FAFSA ahead of time, you'll be in a better position to negotiate, plus you won't be scrambling to pull together all of the financial information at a stressful time.</p>
<p>Thanks, vballmom. I do feel guilty even thinking about this as we've been very fortunate, but things are so tenuous that I'm trying to cover all the bases. It doesn't help that every day we get mail from colleges about the FA deadlines.</p>
<p>If we do file FAFSA knowing we won't qualify and send it to colleges, will a higher income make schools less inclined to offer merit aid?</p>
<p>I think in some cases merit aid is used to sway the student's decision, because colleges know they're competing with similar schools for a given pool of students. My son was offered much higher merit aid at one college than we ever expected, and this was before any financial aid information had been filled out. This is just one data point though.</p>
<p>Usually when people have done well over the years they build considerable home equity and other assets. If this is your case run the numbers and see if you would qualify even with a job loss. Then check the specific schools DS is applying to and see if they allow you to apply for aid in subsequent years if he did not apply as a freshman. </p>
<p>Despite all the need blind claims, I marvel at how schools come up with roughly the same percentage of aid students year over year. So I think not asking for aid can be a benefit and why hurt your chances if you're not going to get any?</p>
<p>I appreciate the feedback, and think we'll probably pass on the FAFSA. There's really zero chance we'd get any FA, so why take it from a student who might need it not to mention the fact we'd be releasing a lot of personal information.</p>
<p>As stated earlier, 401(k) values are not reported on the FASFA. However, contributions made to such plans are considered "untaxed income" by the Federal Methodology and are added back into the EFC calculation and assessed at the applicable rate. </p>
<p>The thinking is that you can stop contributing towards retirement and apply these contributions to college expenses. Nice of them to think of us! </p>
<p>This is not to suggest that you discontinue your retirement contributions. However, understanding the pros and cons of any financial moves made during your base year or any year in which financial aid is applied for- from both a tax and financial aid standpoint goes
a long way in determining what your pay for college.</p>
<p>Also, some scholarships use FAFSA info no matter what the income may be. I would say file it. It is much easier the second, third, and fourth time you file.</p>