<p>I looked at the link provided by swimcatsmom in an earlier post in this thread and it says a 50 yr old (by next 12-31-08, which would be my age then, OUCH!), assets are DEDUCTED from contributions to the tune of $49,000. So unless I am missing something, it seems that the $40k from the refi would turn into -9k, rendering WHEN and how the money is consumed - for the roof or whatever - irrelevant to EFC calculations.</p>
<p>Is this a correct interpretation of the FAFSA EFC?</p>
<p>A5: Education Savings and Asset Protection Allowance for EFC Formula Worksheet A (parents only)
parent as of 12/31/2008* </p>
<p>joecollegedad, I believe you are right that the $40,000 is protected, provided you don’t have $10,000 or so other financial assets sitting around, as in checking and savings accounts, CDs, stocks, etc.
The College Board website has calculators for both FAFSA EFC
[EFC</a> Calculator: How Much Money for College Will You Be Expected to Contribute?](<a href=“http://apps.collegeboard.com/fincalc/efc_welcome.jsp]EFC”>http://apps.collegeboard.com/fincalc/efc_welcome.jsp)</p>
<p>joecollegedad, in my experience, colleges that use the IM will apply it if it comes up with numbers more beneficial to them than FAFSA. Home equity is the big booster in most cases, I think. But colleges have different ways to figure home equity, with some capping it at some multiple of income. Other schools, such as Princeton and Hamilton (I’m sure there are others) don’t count home equity at all.</p>
<p>I can see clearly how I can model or estimate EFC from a FM point of view with the link you provided. </p>
<p>However, I could not find on the CSS Profile link how I can similarly do an unofficial preview model of EFC there. How can I model or estimate EFC from an IM point of view?</p>
<p>This of course is of first importance since you pointed out that the institution will (probably) use IM first. That is obviously the method we informed college consumers need to preview.</p>
<p>EDIT – I looked closer at the Colleged Board EFC calculator, and saw that it will model both FM and IM formulas.</p>
<p>oops, sorry joecollegedad!
Start the EFC estimator and very quickly you will be asked to “Pick a Formula”. You can choose to have both formulas calculated at the same time.</p>
<p>JoeCollege- if you do have other assets which would be included in that $49k which is protected, use the refi proceeds you planned towards consumer debt, go ahead and pay off that consumer debt BEFORE you file finaid foms. The same with any other intents for it- $20k counts, a new roof is not listed as an asset. </p>
<p>As long as you are below the protected amount, in total, it will not count for FAFSA. CSS Profile has different rules, seems like it would be smart to deal with the reasons for the refi, can you redo the roof before you file?</p>
<p>I have done the roof already - and paid w/ a credit card,which was to be a temp solution until the refi proceeds came thru which wd then be used to pay off the credit card.</p>
<p>I actually have ‘done’ the refi, but it is in the rescission period.
So, is it a reportable asset now, or do I have to wait until the check is deposited into the bank and clears?</p>
<p>somemom, why is it important to pay off consumer debt before doing FA?</p>
<p>I think this was my strategy, but I am having some doubts about timing now. So I want to do the correct order in the next 24-48-72 hours before the 12-01 filing date for the EA colleges.</p>
<p>wd this be the right order?</p>
<ol>
<li>receive refi ck $50k (was more than I had said)</li>
<li>deposit it in bank</li>
<li>pay off credit cards </li>
<li><p>now there is $20k leftover from the refi that will be used for windows and fixing a sagging porch, but which will not bedone by 12-01.</p></li>
<li><p>complete profile / college FA</p></li>
</ol>
<p>btw, we do not have any other assets other than this cash out amount that is really a chimera since it will be exhausted in the next month.</p>
<p>Just to clarify, the refi loan proceeds are a reportable asset-- once you have them, you have to report them (unlike other assets which aren’t reportable: IRA’s, cars, furniture, etc.) In that sense, they aren’t protected.</p>
<p>However, you get an asset protection allowance (FAFSA) of around 49K-- which gets deducted from all of your reportable assets before any assets are assessed. The Profile asset protection allowance is calculated differently, and is generally less than the FAFSA allowance.</p>
<p>If there’s any chance that your reportable assets will exceed your asset protection allowance, it makes sense to use some of the reportable assets to spend down consumer debt, in order to reduce parental contribution to the EFC (and thereby increase potential aid).</p>
<p>If your reportable assets are less than your asset protection allowance, you won’t have any parental asset contribution to the EFC, and spending assets down prior to filing doesn’t have any benefit, financial-aid-wise.</p>
<p>Thank you dt123 and swimcatsmom. I picked-up the book!</p>
<p>I had one more question. I have some invested in mutual funds. Certainly that will be counted as my money. But, would it be @ the NAV on the date of the application or is it just the amount I invested (at face value)?</p>
<p>How about this: assume you have a collection of 1000 rare silver dollars. Each is appraised as being worth $1000 a piece due to their fine condition and scarcity. Do you report this as $1,000 in cash, or $1,000,000 in investments, or nothing as a personal possession?</p>
<p>Another good book: How to Pay for College, a practical guide for Families by Gen and Kelly Tanabe. (Yes, it is put out by Sallie Mae, but has lots of useful info, even if some is a bit dated - 2005).</p>
<p>Join Date: Aug 2004
Location: Texas
Threads: 12
Posts: 699 That’s an easy one.</p>
<p>How about this: assume you have a collection of 1000 rare silver dollars. Each is appraised as being worth $1000 a piece due to their fine condition and scarcity. Do you report this as $1,000 in cash, or $1,000,000 in investments, or nothing as a personal possession? </p>
<p>Well, dt123 - that’s really an easy one because if I had such silver coins, even if 1/10th of that - I wouldn’t be posting on this forum - I would straight go to the college my daughter wants to go as soon as I she gets accepted!</p>
<p>But, I don’t have a single silver coin :(. So, what really happens - is it the face value or the market value. Do we need to report such possessions?</p>
<p>Stocks, shares, bonds etc - it is the value on the day you file FAFSA (I just used the most recent statements but had to enter every e bond into an online calculator to find current value - forgot I even had the darn things till someone mentioned them on CC).</p>
<p>The coin question - hmm I don’t know. If one had tens of thousands as an investment it seems they should be reported. We probably have the odd one or two and it never crossed my mind to put them down.</p>
because if I had such silver coins, even if 1/10th of that - I wouldn’t be posting on this forum - I would straight go to the college my daughter wants to go as soon as I she gets accepted!</p>