real estate

Paying for College
5

<p>You indicate that your friend’s father’s income is around $30K. I assume that number is what’s listed on his 1040 on the line adjusted gross income (AGI). </p>

<p>A family’s EFC (expected family contribution) is a sum of a percentage of four factors: parent’s income, student’s income, parent’s assets, student’s assets. Under the federal methodology, if the parent’s income (AGI) is beneath $50K and the parents file a short form (1040A or 1040EZ), then two of the above factors (parents assets and student assets) will be excluded when your friend’s EFC is determined. See
<a href="http://www.finaid.org/educators/needs.phtml%5B/url%5D"&gt;http://www.finaid.org/educators/needs.phtml&lt;/a&gt;&lt;/p>

<p>So if your friend applies to schools that only use the federal methodology (FAFSA), the real estate will be excluded if the parent’s income is beneath $50K and the parents (and your friend) file short 1040’s. On the other hand, if your friend applies to schools that use institutional methodology (PROFILE) then the real estate will be treated as an asset and used by the schools when your friend’s family’s EFC is calculated.</p>