Parent Financial Information - how much will it hurt to have OVER the assets of $21,300 on Fafsa?

Paying for College
1

The Question >> “As of today, does the total amount of your parents’ current assets exceed $21,300.00?”…

“As of today, what is your parents’ total current balance of cash, savings, and checking accounts?”…

How is this calculated…it sounds if you have less than the $21,300 -it is safe then ?? they don’t factor it in at all??

So what percentage to they deduct after reporting over this $21,300 ??

Last year this was much higher… at $33,000 or something if I recall … why so much lower this year… wondering if we should help oldest son pay off some college loans to lower this below this amount ?? We are about $4,000 higher -when we report it… should we spend it ??

We’ll also have 2 sons in college this year also… Income at $60,000

Thank you

2

Is there anything you can prepay? Your mortgage? any bills? your property taxes? Car or home insurance?

3

I’m sure I’ll be corrected if I’m wrong, but I believe that this is the asset protection allowance, and anything over this amount will be assessed at the parent asset rate of 5.6%.

4

Buying oil … could prepay cable for a year… if we wanted to pay $2,000 of oldest son’s student loans… how does that work. does this need reported or something ? It’s not something we’ve ever done… maybe that would have tax ramifications on his end… I just want to know if over this amount… how much it will hurt… how this is calculated… where to find an article about it - if anyone knows… I will need another car soon but I hate to run out & buy a used car -feeling pressured -before I file this fafsa (probably mid -to late Feb)

5

Yes, the asset protection allowance was higher last year, it was reduced for this year.

6

You know…how much above the asset protection allowance are you? Does this make the difference between being Pell eligible…or not? Do your colleges all guarantee to meet full need for all acceoted students? If you are $10,000 above that asset protection allowance, it would add $560 to your family contribution. Is it really worth prepaying $10,000 worth of bills to have $600 or so less family contribution?

7

Maybe… $600 buys a lot of beer. :slight_smile:

8

With two in college, low assets, and income of $60k the kids are likely to get Pell grants, depending on their own income and assets.

If I were in that situation, I would pay down my HELOC by $4000 right before the FAFSA is submitted.

Pell-eligibility allowed one of my kids to apply for and receive a nice-sized study abroad scholarship (Benjamin Gilman).

9

If your FAFSA EFC was about $3,000 last year, I think it will be about $1,500 per college student this year (depending on their income if any).

I tried to determine your EFC with this EFC formula
http://ifap.ed.gov/efcformulaguide/attachments/100615EFCFormulaGuide1617Attach.pdf

with $60,000 W2 income (also AGI?), no 401k deductions, 5 children at home, 2 over 17, 3 under 17(?).
with $25,300 in assets.

It came up with available income (AI):
$60,000- $2,400 state tax allowance- $4,590 Soc sec tax allowance - $39,090 Income protection allowance (7 person in household, 2 in college) = $13,920

And total assets $25,300 - APA $21,300 = $4,000
It list an asset conversion rate of .12 so it would add $480 to your EFC

So $13,920 + $480 = $14,400 Adjusted Available Income (AAI)

table 6 then figures Parent contribution by taking that amount by 22% = $3,168

then you divide by number in college (2) and parent EFC is $1,584

Also don’t wait to submit FAFSA until February! Perkins loan and SEOG grants might be gone, that would cost you more than a few hundred more for $4000 over the APA in assets. You can look on paystub and file FAFSA now with close estimate and then update after tax return was filed.

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If you want to get you oil tank filled and prepay some bills, go ahead, but if my numbers are correct (and I hope so although I can’t guarantee they are) I don’t think your assets are going to make that much difference.

IMO Timing of the FAFSA will be much more important, to be able to qualify for aid that is given out till it’s gone.

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[QUOTE=""]
I will need another car soon but I hate to run out & buy a used car -<<<

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Then I would think that prepaying cable or filling your oil tank would be worthwhile so that you’ll be freeing money up later on for the car purchase…when you’re ready to buy.

Unless you were planning on paying off your kids’ student loans, I don’t think that’s the route to go. Lowering your own bills would make more sense.

Do you own your home? When are your property taxes due?

If you typically pay your auto insurance every 6 months, you can pay for the whole year.

12

Is this coming semester (tuition, books, room, board) all paid?

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BTW are you going to claim the AOTC for son 2 if you had to pay $3,000 out of pocket?
https://www.irs.gov/Individuals/AOTC

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Thumper1 said: You know…how much above the asset protection allowance are you? Does this make the difference between being Pell eligible…or not? Do your colleges all guarantee to meet full need for all acceoted students? If you are $10,000 above that asset protection allowance, it would add $560 to your family contribution. Is it really worth prepaying $10,000 worth of bills to have $600 or so less family contribution?

Thank you very much for this valuable info… this is what I was seeking to understand… you are so helpful here… and no… it wouldn’t be worth paying all that extra it it’s just a matter of a few hundred dallors… we will be over for about $5,000… we have no mortgage or car payments. we will have 2 sons in college though…

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madison85 said : If I were in that situation, I would pay down my HELOC by $4000 right before the FAFSA is submitted.
I never knwo what these abbreviations are … what is HELOC? If I pay anything down or off… we would like to give olderst son money for his loans … will this cause problems - does the governement need to know that we did that… for his taxes, our taxes -is my question??

16

Mommdc said: Also don’t wait to submit FAFSA until February! Perkins loan and SEOG grants might be gone, that would cost you more than a few hundred more for $4000 over the APA in assets. You can look on paystub and file FAFSA now with close estimate and then update after tax return was filed.

Ok… you are scaring me with this… every year so far we havent’ submitted them until MID Feb due to my husband can’t even get his W-2 form online till the end of Jan… then it seems the few others things we are wating for show up around then or early Feb… HOW CAN I SUBMIT THIS without our taxes being fully down… am I allowed to do this ??? then change it… I have already started them BOTH -with the full intention of coming back as soon as I get our taxes completed…

We have never missed any Grant money YET… is something changing about this -that parents need to do as early as Jan… other places say before march… I am confused on this now…

We DO have 401 contributions… total gross is more like $69,000

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Mommdc said:

with $60,000 W2 income (also AGI?), no 401k deductions, 5 children at home, 2 over 17, 3 under 17(?).
with $25,300 in assets.

I was looking on a recent pay stub of my husbands… and it says NET PAY (year to date) is only $39,020

but total gross is $69,089.54

Taxable Gross $60,495.56

Total Taxes (year to date) $13,712.39

Total Deductions (year to date) $16,356.64

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Do you own your home? When are your property taxes due?

If you typically pay your auto insurance every 6 months, you can pay for the whole year.

Myself & husband don’t make a lot of money but we are extremely frugal… Yes… 2nd sons tuition is paid in full… car insurance is paid for a year… House insurance for $700 will be due this month… House /property been paid off …Property taxes all paid in full. I wasn’t sure how they calculated that extra money we have in assets… that is very fair… and fine… it’s better to have the extra income I feel… now that I understand it… If this was the college students money, however, it is a much bigger bite… right ? at 10% or something _____%

They have not worked … too busy in Band… didn’t have a car…

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[QUOTE=""]
Is this coming semester (tuition, books, room, board) all paid?>>>>>>

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2nd son needs to get on this… and get those bought (the books)… he has no told me yet -the cost… I need to talk to him today about this … good idea ! Thank you !

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[QUOTE=""]
BTW are you going to claim the AOTC for son 2 if you had to pay $3,000 out of pocket?>>>>>>>

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I have never heard of this… and have no idea… I am wondering if I should ask our TAX man to do our Fafsa or something… do people do this… every year I have not been able to get the IRS website to automatically fill in the fafsa … that “retrieval thing”… just NEVER worked for me… not sure what I am doing wrong… how does one claim this ?? is this something the TAX man does… or I do on the Fafsa…

So much to learn !! Just so many things… I always worry I am doing something wrong too. …