<p>
[quote]
"Who can blame them for thinking maybe they should stop at $3000 and then play video games at home all day for the rest of the summer?"
[/quote]
</p>
<p>Perhaps the better idea would be to get a valuable unpaid internship after that point. I can definitely see the reasoning behind not wanting to work hard after a certain point.</p>
<p>Does the FAFSA take into account just the money a student makes after taxes, or before taxes? For example, I made $700 in two weeks, yet after taxes I actually have in my bank account $500. Will the FAFSA look at the $700 or $500 in regards to putting it towards the $3000 thing?</p>
<p>The FAFSA Student Income Protection Allowance is $3K after tax dollars. So the first $3249 pre-tax dollars are excluded from assessment. Above that, income gets assessed at 50%. And if the income sits in a bank account come next FAFSA, it takes another 20% hit as an asset. Ouch.</p>
<p>So FAFSA will look at all your income for the year. If you're keeping track as you go, count the $700 and work your way up to $3249.</p>
<p>I wonder what braintrust came up with the idea of excluding the first 3000. And then how much to take after that (50%). </p>
<p>I definitely think the student should contribute, BUT I think those numbers seem arbitrary. I want to know the logic behind them. I bet you there is none. Why not make that number go up to excluding more (maybe 5000) and taking a smaller percentage (not more than 30). </p>
<p>I bet you that no government person could tell you exactly why the system uses 3000 and 50%</p>