<p>FAFSA/EFC experts: I am hoping you can help me again. For the 2nd year in a row, my son's EFC is going to be very close to the cutoff for a sizable university grant at his school. We had about $4K in medical expenses this year. Does that amount justify asking for a professional review? I haven't finished his FAFSA yes, but it looks like the EFC is going to be about $80 over the limit! (We used Collegeboard's calculator; there is nothing complicated about our tax/income situation, so we're assuming it's accurate)</p>
<p>I believe the medical expenses have to exceed 7.5% of your AGI, some schools may use a higher percentage.</p>
<p>Consult with the book “Paying for College without Going Broke” Princeton Review, Kalman Chany.</p>
<p>The 7.5% of AGI is the floor for being allowed to deduct any medical expenses for taxes, not for applying for a professional judgement for FAFSA. Unless it has changed (we did one my daughter’s first year of college), the FAFSA income protection allowance includes an “allowance” for medical expenses. Only medical expenses that exceed this allowance will be used to make an adjustment. The income protection varies based on your family size and the number in college. I think the medical expense part of the allowance is somewhere along the lines of 11%.</p>
<p>It is completely at the discretion of each school and some may not consider an adjustment if it will be fairly minimal. Make sure you include all your medical expenses that were uncovered by insurance (dental, prescriptions etc). It doesn’t hurt to try. The worst they can say is no.</p>
<p>Thank you! </p>
<p>SLUMom, I knew the expenses weren’t tax deductible. I’m asking about the FAFSA though–two completely different animals as swimcatsmom explained. And, son will be a senior. So far weren’t not broke. Still don’t like missing out on a possible grant, though. :)</p>
<p>I can’t remember the details, but another poster had the same problem…income slightly above threshold. I think she quickly made an IRA contribution (which counted for the previous year) to lower her AGI. Would that work? (others can chime in if this won’t work).</p>
<p>I know that IRA contributions get “added back in” but I’m thinking that AGI is still lower and that’s what’s used for these aid thresholds?? I may be wrong…lol</p>
<p>For CSS PROFILE schools under the IM formula (Institutional methodology) the percentage is 7.5% over your AGI for a medical expenses allowance. I had assumed you were referring to a PROFILE school, not a FAFSA only school, but for anybody else reading this whose child attends a CSS PROFILE school, the information might help them.</p>
<p>We’ve made our IRA contributions. We did Roth’s this year which doesn’t affect AGI. Traditional IRA contributions are added back to AGI so theFAFSA income available is the same either way (I’ve gone through the calculation worksheets multiple times). Taxes are higher with Roth’s, which lowers EFC (compared to traditional IRAs) but in our case not enough to get us under this threshold. </p>
<p>Talking about a FAFSA school here.</p>
<p>Do a search for recent threads started by “fidoprincess” (using the “advanced search” tool). Her family was in an almost identical situation - just a few dollars over the threshold needed to qualify for Cal Grants (which is FAFSA-based). She has a few recent threads . . . you’ll have to sort through them to find the one that specifically addresses this issue. You might also want to PM her - I know that various people contacted her privately with suggestions that didn’t make it into her thread.</p>
<p>OP, I encourage you to consider that the cut off for grant funding is there for a reason. If you can play with your numbers just enough to then qualify, will you be taking a grant away from another family who really does qualify and needs the money more than your son? Just a thought…you are blessed that you have what you have and are not really “losing out”…</p>
<p>teachandmom - The difference between being $80 above the threshold and $80 below is not significant . . . and once you take into account each family’s personal circumstances, it’s entirely possible that the family above the threshold has significantly more need than the family below.</p>
<p>They have to set the cutoff somewhere, but that certainly doesn’t mean that the family just above that cut-off can afford more than the family just below.</p>
<p>Teachandmom…an $80 efc equates to $170 extra income. We are talking about a $9000 grant. Do you seriously believe that someone who made 170 less than us has a justifiable need for $9000 but I don’t?</p>
<p>A family with an efc $81 lower (or $170 less income) could easily not have had $4000 in out of pocket medical expenses.</p>
<p>scubasue: can you clean out (i.e., down to $0) your and your son’s checking and savings accounts as of the day you submit the FAFSA by paying bills, rent, etc?</p>
<p>Thanks Everyone for the advice! Dodgersmom, we calculated EFC based on $25 left in son’s account. We have no contributions from assets since almost all of our assets are in retirement accounts. What is not in retirement is less than the asset protection allowance.</p>
<p>If you have the FAFSA worksheet printed out, you can adjust the numbers and see how that affects the EFC. Are you asking about the cal grant? Did you make sure that you are looking at the right numbers? The income ceiling this year is $83100 which is up from last year’s amount. It is based on the “modified” adjusted gross income where they add back in things like my husbands 403B pretax contributions. </p>
<p>We were so close to the cut off for cal grant and someone here suggested that it would be worth us paying more in taxes to qualify for the grant. One of the ways to do that would be to not take the child tax credit of $1000 if you have any other kids because ages 17 and up don’t qualify. If you have the worksheet, you can see on the box “allowances against parents’ income” where the tax amounts are figured in. There are some other credits you may be entitled to that you might also want to just not take this one year. The higher the taxes, the higher that allowance becomes.</p>
<p>You really need to have the worksheet in front of you to see exactly how much difference each change you make affects the bottom line. Here is the link just in case you don’t have it:
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf</a></p>
<p>There really isn’t a lot of room to make changes but there are a few things you can do. One thing I know you can NOT do is make a contribution to an IRA to save on the FAFSA. That was suggested at one point but because FAFSA uses a “modified” adjusted gross income figure, they just add those IRA contributions back in as income. Thankfully, I caught myself in time by using the worksheet to test each thing before we did it.</p>
<p>Go back and double check each figure, make sure you are using the right tables and giving yourself the proper asset protection allowance based on age and that you entered the right amount in that box 17 of the worksheet because people often make mistakes there. Any adjustments that you can do to your AGI “above the line” won’t be added back in so look for those too! One place that I made a simple math mistake was at the very last step where you have to use table 6, so double check that calculation also. Good luck.</p>
<p>As far as I know, the only time making an IRA contribution is useful in FAFSA is for the simplified needs and auto 0 formulas. That is because they do use the AGI before any addbacks to decided if a person is eligible for those specific special treatments. As fidoprincess says, for the EFC, making an IRA contribution will not reduce the EFC (actually could increase it a little with a non roth as it reduces the taxes which are an allowance against income).</p>
<p>I would suggest going ahead and trying for the professional judgement for the medical expenses. It can’t hurt to ask. I think we were even able to include our insurance premiums in ours (ours were paid for with after tax money), but I would not swear to it - it has been a few years. Good luck.</p>
<p>Thank you everyone for the suggestions. Sorry for the silence on my end…we were in the boonies for the long weekend. Plus my head was spinning from thinking about this issue so much. </p>
<p>To answer a few questions: This is not Cal Grant–we’re in a different state. We have two kids–youngest headed to college next year, too. She’s 17 so we don’t get the tax credit for her this year. I do have thw worksheets and have gone through them with a fine tooth comb. </p>
<p>We’ll ask for the professional judgment, but we’re going forward with the assumption that we’ll be denied and plan accordingly. </p>
<p>If you have any other ideas, please let me know! </p>
<p>Thanks again.</p>
<p>Do you have a taxable state refund included in your 2012 AGI (i.e., taxable because you itemized your deductions in the previous year - 2011)?</p>
<p>Could you amend your 2011 return, not deduct your state income taxes, and then the state tax refund in 2012 would not be taxable (the ‘tax benefit’ rule), your AGI would be lower and then maybe your EFC would be below the threshold you are looking for. </p>
<p>Is this grant you may miss out on $9,000?</p>
<p>Madison…we don’t have state income taxes. And yes, it’s a $9000 grant.</p>
<p>I would request professional judgement and see how it flies. </p>
<p>THe only way I know that you can adjust your income right now is by putting more money in your HSA accounts if you are at a company that permits you to do so. Ask personnel if that is a possibilities… We can do this. I believe, but am not 100% certain that health plan contribuions do not get added back in as IRA ones do.</p>
<p>The guidance this year explicitly states that HSA contributions are added back in (as untaxed income). But if the issue is that you need an AGI under a certain amount, I would think that might work - it would reduce the AGI.</p>