<p>Let me start off by saying that I'm not bitter, I'm not looking to start a thread to whine about bad financial aid, etc. I'm genuinely curious.</p>
<p>My dad is in his late fifties and works as an electrician. He needs to save for retirement; colleges disagree. I find it odd that, in calculating EFC, the FAFSA expects <em>everyone</em> not to retire until their early sixties or later. That makes sense for a college professor or someone with a desk job--sure, it's work, but not physically demanding or dangerous--but certainly none of my dad's coworkers are in their late sixties, and if any were I'd be worried for their safety. It's just not reasonable to expect that he'll continue to be able to do heavy lifting and wiring without hurting himself at age 65. </p>
<p>I'm not entirely sure what the point of this thread was. Chalk it up to another oddity in this mysterious financial aid process.</p>
<p>It necessarily has to assume a lot about one's family to standardize a form for all the kids in the country applying for FA. You can state what you believe are unique circumstances directly to your college FA office. I think your position may be strengthened if your dad is presently suffering from a documented medical condition that will make it necessary for him to stop working in the very near future.</p>
<p>Muffy's right; the financial aid forms cannot slice & dice occupations. And even in your father's case, he may not have to "retire" even though he may not be able to do lifting and wiring as he ages. He can become a foreman, a drafter, a teacher, a consultant. So it is unrealistic even to assume that an electrician "must" retire earlier than someone in a desk job (who could get carpal tunnel syndrome which forces retirement at 50, too). There's only so much individuation that a standard formula can make.</p>
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<p>I find it odd that, in calculating EFC, the FAFSA expects <em>everyone</em> not to retire until their early sixties or later.>></p>
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<p>It's not just the FAFSA. Even the Social Security folks feel that working into your mid sixties is the expectation for full benefits. That age is creeping up to 67. </p>
<p>Plus, it's best to start saving for retirement a LONG time before 10 years prior to your retirement. In fact, (parents of young kids might want to consider this)...the best advice we got was to put as much as we could into our retirement accounts as early as we could. This would mean that by the time our kids went to college, the balance IN those accounts would continue to earn interest and would be more sizable than if we didn't contribute to them in a big way prior to college. </p>
<p>We figure we can pay back the loans using our retirement income...but that's because we contributed to it very early on.</p>
<p>tokenadult, imo nobody should even be allowed to take an SAT test until they and their parents have read the document from the above link. (yes I'm being sarcastic)</p>
<p>I also think that it should be FREE for students to take the SAT/ACT test twice.</p>
<p>Maybe Collegeboard could save a few bucks by moving to a lower cost area. That NYC rent can't be cheap :-)</p>
<p>WAY too many families are so clueless when it comes to money and this clue needs to acquired early on in life. Say before people have 4+ kids or buy the most house they can afford. </p>
<p>Yes, you CAN save money even if you make the median income of about 50K. </p>
<p>Clip coupons, buy used furniture, never get fast food or take out. Credit should ONLY be used for a house or a car (and get a used car, not a new one). Need a haircut, only get a cut - where I go, it's less than if you get a wash and blowdry (I pay $17 incl tip every other month). I could go on and on about how I scrimped and saved every penny I could for the past 18 years (for the first 10 of which I made btw 20-40K) and the past 8 I've made (40-65K). </p>
<p>PAY YOURSELF FIRST, you can get a starbucks some other time.</p>
<p>Bagpiper:
A representative of almost EVERY profession will give you arguments for early retirement.
College professor? Don't assume that he is paid for repeating the same lecture to students every year. At big universities he is usually expected to spend most of his time doing research and compete for research funding. Can you quickly learn a generation of electronic devices if you have to? I guess you can. Can you father? (and I stress - quickly and while continueing working!) The answer is less obvious. Many universities have a right to retire even tenured faculty above 60 or 65.
The engineers and IT people are in even worse position. They can be fired anytime. And good luck looking for a new job after 60. They do not want you for the same-level position and cannot take you for a lower-level position. Plus, an electrician is needed everywhere. For them there is frequently one employer within drivng distance. Lost a job? You are selling you house and moving (you heard about situation in real estate?)
I could go on about doctors and lawers, but I think you got the point. It's about the grass that is always greener on the ther side.</p>
<p>That College Board document is fascinating (ok, I confess I was an econ major, but still...)</p>
<p>Speaking of slicing and dicing:</p>
<p>*The appropriate level of the IPA (Income Protection Allowance) is different depending on where the aid applicant lives. For example, $25,000 goes much farther in the rural Midwest than it does in Honolulu or New York City. Unfortunately, no reliable and complete index comparing the cost of living in every area of the United States is available. It is also impossible to entirely separate the higher cost of living resulting from residence in a general area such as metropolitan Boston from the higher cost of living resulting from the choice to live in a suburb with expensive homes and high-quality schools instead of a less desirable town. Because of this, the geographical adjustments made in need analysis are generally quite limited. Institutional Methodology has recently implemented a new list of adjustment factors for major metropolitan areas. Because housing is the compononent of budgets that varies most by location, differentials in housing costs are used to adjust the IPA upward. *</p>
<p>In other words, in government speak what they are saying is "it's a crapshoot". </p>
<p>I haven't read the whole thing, but I wonder how they rationalize the fact that the income protection for a single parent is less than 1/2 than for a married couple.</p>
<p>I realize they are raising the income protection for students over the next several years, but 3K is way too low and I think it's been that value for a long time.</p>
<p>^^^
I would assume it is working costs(transportation/clothing) for a couple,
One really interesting thing I noticed was when filling out the fin calcs was if only one person worked, you had a higher EFC than splitting that income between 2 working.</p>
<p>ie: AGI of 150K EFC was less if both parents worked than if entire 150K was earned by only one even if you only shifted 10K to the other person</p>
<p>I think there is a $ 19,000 or so protection allowance for each adult worker, or it might be a percentage.
so lowest EFC would be if income is split.</p>
<p>sueinphilly, the document doesn't address the IPA discrepancy for single parents. Here's part of what it says:</p>
<p>*Both aid professionals and parents sometimes complain that the IPA is too low because it is not enough for the family to live on. In fact, the need analysis system does not in any way incorporate the idea that the IPA is the family's living allowance. Instead, the idea is that up to the level of the IPA, the family's income is so low that it has virtually no discretion about how to spend its money. No one expects families to spend all of their money above the level of the IPA on college. Rather, some fraction of additional dollars should be devoted to college. *</p>
<p>IPA for single parent seems to be $19,150. For parents and independent students with dependents, the income protection allowance can range from approximately $15,000 to $32,000, based on family size and number of family members enrolled in college.</p>
<p>But the income protection for 2 parents was about 44K (I think the numbers change based on age of older parent). </p>
<p>I don't pay 1/2 a mortgage just because no man lives here. Fixed costs for 1 person aren't less than 1/2 that for 2 people. I'm not talking food and clothing, I'm talking mortgage and utilities.</p>
<p>THANKS FOR THE LINK TO THE COLLEGE BOARD'S ECONOMICS PRIMER!!!</p>
<p>This was a huge revelation for me. It really should be a read-first for all of us parents. What a relief to now understand the CB's logic - demonic as it is.</p>
<p>The more we know, the better we can help ourselves and our kids.</p>
<p>The big picture is that the Profile and the Fafsa formulae are compromises between complexity and accuracy. The goal in an ideal system would be complete accuracy in terms of determining the fair amount for every family to pay for their children's education. Unfortunately, considering every relevant factor would take a team of CPAs and investigators a week for each family to really determine exactly what should be paid. That would be fine if there were only ten families a year to analyze in the whole country.</p>
<p>So we have to have a system where information is self-reported and the benefits calculated, efficiently and on schedule, for hundreds of thousands of families every year, by the FA offices at thousands of institutions. What results are benefits that are reasonably-okay across the middle but grossly-insufficient or overly-generous at the margins.</p>