<p>This is for a friend.</p>
<p>Her husband is a civilian working for the Department of Defense. They live abroad and he is currently deployed in Afghanistan. Their daughter is considered in-state at a public university in Virginia and they are having a serious issue right now with her FA package and I am trying to help. She will be a sophomore.</p>
<p>Husband's W-2 shows $105,000 income plus $35,000 for a housing allowance. They did the FAFSA and their EFC was $32,000 which exceeds the in-state COA which is about $21,000 for the upcoming year. Daughter's FA pkg consisted of a $5500 Stafford loan and that was it. They do not have significant assets. The wife (my friend) does not work. They have 5 children including the one in college. Last year - the COA was several thousand dollars less and they rcvd a few thousand in grant money on top of the Stafford loan. So - they are being asked to pay about $10,000 more this year as compared to last year.</p>
<p>When I try a simple EFC calculator - and use the whole $140,000 income - I get a $25,500 EFC. So - I still don't get the $32,000 EFC. But I think the treatment of the housing allowance is the crux of the issue. I have not actually seen their 1040 or their SAR - but from what I have read - the used portion of the housing allowance should be listed as untaxed income. Does that mean it is not counted in the EFC calculation?</p>
<p>She is in the US right now and has a meeting tomorrow with her daughter at the FA office of the university. For those of you who are very well-versed in the FAFSA - how should this housing allowance be treated by FAFSA? It is important to note that while he is deployed - he is a civilian - not military. He does not have VA educational benefits.</p>
<p>They are panicking right now and I would love to give them some help. Thanks.</p>
<p>It does sound like the housing allowance may be the issue. It’s like getting a bigger salary because you live in a high-COL area…FAFSA doesn’t take high-COL areas into acct. </p>
<p>Since the dad is a civilian, there may not be anything that can be done except appeal for some kind of professional judgment…which is unlikely. </p>
<p>*and use the whole $140,000 income - I get a $25,500 EFC. So - I still don’t get the $32,000 EFC. *</p>
<p>That’s because the housing allowance is treated differently than earned income. It doesn’t have normal deductions taken…so it’s treated as if it’s a larger amount.</p>
<p>They may have no choice but to take out a Plus loan for this year…and get the family back to VA as soon as possible.</p>
<p>The dad should appeal to his COMPANY for some kind of compensation. My H’s company compensates for these kinds of things under a “make whole” policy.</p>
<p>Frankly, if the COA is about $21k, I doubt they would have a low enough EFC anyway…even without the extra housing money.</p>
<p>His regular salary may be higher than the previous year because of the overseas duty. </p>
<p>Are they REALLY spending $35k per year on housing in Afghanistan?</p>
<p>Hi - this situation is kind of complex. He is stationed in Europe - Brussels, I think. So - the whole family of 7 moves from Virginia to Brussels. Then - he gets a 6-month deployment to Afghanistan. He will rejoin family in Brussels in September. I do believe that their monthly rent in Brussels is about $3000/month - so the entire housing allowance is being used. </p>
<p>It just seems like such an odd situation - in that if he were military - he would have certain VA benefits. But he is a civilian.</p>
<p>So - what you are saying is that the $35,000 housing allowance actually translates into an even higher amount because it is not subject to the deductions that regular income would be subject to.</p>
<p>I did the EFC calculator without the housing allowance - just the income of $105,000 - and that came out to be about a $14,000 EFC. It just seems a shame that she is juggling 5 kids in a foreign country away from family and friends - he is deployed every so often - they limited daughter to Virginia in-state options - and they are still pulling their hair out trying to make this work financially.</p>
<p>So - asking for professional judgement due to this rather unique situation is the best option?</p>
<p>So - what you are saying is that the $35,000 housing allowance actually translates into an even higher amount because it is not subject to the deductions that regular income would be subject to.</p>
<p>Yes…because things like social security and other stuff doesn’t come out of that. </p>
<p>I do believe that their monthly rent in Brussels is about $3000/month -</p>
<p>yikes…they may need to find less expensive housing. </p>
<p>*So - asking for professional judgement due to this rather unique situation is the best option? *</p>
<p>They need to do two things at the same time…</p>
<p>1) Ask for PJ…I don’t think they’ll get it.</p>
<p>2) Ask his JOB to compensate in some way because of this situation. They may have some kind of “make whole” policy. They can show last year’s aid as their documentation to his job.</p>
<p>My H has to go to Afghanistan as a defense contractor and he gets “hazard pay” when he goes (and it’s significant…like 50% more). Are you sure this guy isn’t getting paid a higher salary while he’s there? That’s kind of standard. </p>
<p>Do these people still have their VA home? Are they renting it out?</p>
<p>Since the husband is in Afghanistan the missing $ are probably his hazardous duty pay which is not taxed. That would need to be thrown in the mix as well. VA has some good CCs which have matriculation agreements with their 4 year schools. By then the family should be moved again and probably have a lower income.</p>
<p>$3000/mo is actually not that high for Europe. We were north England until a year ago and our rent ran about $3500/mo. depending on the local currency exchange rate. It’s that currency thing that kills. Also they have a big family and Brussels is VERY expensive so getting “less expensive housing” doesn’t always work in Europe.</p>
<p>OP best of luck to your friend. Make sure when they talk to Financial Aid, that they emphasize that the housing allowance is absolutely not available to pay for tuition.</p>
<p>when i ran an EFC calculator (finaid which is a little out of date, but s/b close enough), I came up with an EFC of 32,000. That was putting the 105k in taxable income, and the 35k as untaxed income.</p>
<p>
No, quite the opposite. The untaxed income will have a higher impact than taxed income. It does not attract the same allowances as taxed income. And it does not attract allowances for FICA. That $35k will have a huge impact on the EFC. At that income level every extra dollar after allowances (FICA, taxes) is probably having an effect of around 46 cents on the EFC.</p>
<p>Talk to the university about a professional judgement. I was in a similar situation (working overseas with misc income which never saw my bank account) and it was fairly easy to get the university to adjust the EFC once they understood the specifics. Good Luck.</p>
<p>Thanks for the suggestions - I am curious to see if the university will use pj and adjust the FA and I will also suggest that he speak with his employer.</p>
<p>Rockville…</p>
<p>*Last year - the COA was several thousand dollars less and they rcvd a few thousand in grant money on top of the Stafford loan. So - they are being asked to pay about $10,000 more this year as compared to last year.</p>
<p>*</p>
<p>they need to have a copy of their aid package from last year to show how this “housing allowance” has screwed up their D’s aid. </p>
<p>If this guy works for a large defense contractor, they have the means to “make whole” their situation. The company will pay the $10k plus more to compenstate for the taxes on that $10k…there’s a formula for this.</p>
<p>Tell them to hold firm, go up the ladder if necessary. $10k is nothing to them…nothing.</p>
<p>So - friend and her daughter met with the FA advisor this morning. They were able to get an additional $1000 in grant money - so at least it made the trip worthwhile. Besides the housing allowance issue - another thing that came out was that her husband had submitted the FAFSA from Afghanistan and he had submitted it late! After the March 1 priority deadline - so that hurt them as well. So - I think she has learned a lot - with 5 kids - she will need to become a pro on these issues. Thanks for the help.</p>