It’s that time of year again when parents college students across the country are forced to deal with the complex process of completing the FAFSA application in order to determine how much federal financial aid they may be eligible. This assistance is in the form of grants (Pell Grants, Federal Supplemental Educational opportunity grants, SMART Grants and teaching grants) or loans (Perkins loans and subsidized Stafford loans) and is determined by the following formula:
Cost of Attendance
minus Resources (employer educational assistance funding, VA educational benefits, subsidies, non-family funding)
minus Expected Family Contributions
= borrowing requirement
The Expected Family Contribution amount is determined as follows :.
1. The contribution from income = Parent parental adjusted gross income plus exempt income as well as a 401 (k) Plan contributions as well as IRA allocation as well as workers’ Compensation Benefits as well as Military allowances along untaxed Social Security Benefits plus child support plus Veterans disability, as well as Veterans pensions received minus Income Protection Provisions minus Federal Income Taxes minus Social Security Taxes minus State Allowance minus Employer expense allowance. Multiply this amount by 22% -47%.
2. Plus’ contributions from assets = Total parents parents Assets minus Annuities minus cash surrender value of life insurance minus private saving minus financial aid minus personal property (cars, computers, various equipment) minus Family Residence minus Family Farm minus family (100 fewer employees). Multiply this amount by 2.64% -5.64%.
3. Plus contribution from student revenue = adjusted gross income plus student exempt income as well as a 401 (k) Plan contributions plus untaxed Social minus Income Protection Federal income tax allowance minus minus minus State social allowance minus employer expense allowance. Multiply this amount by 50%.
4. Plus contributions from assets = Total student minus Annuities, minus Cash surrender value of life insurance retirement accounts minus minus minus financial personal property of the student.
add items 1-4 success in the Expected Family contribution, which is the amount that is expected of parents and college students to contribute to the cost of college. Of course, the devil is in the details, but this gives you an idea of how to determine what, if anything, you can expect to get financial assistance. Whether financial assistance in the form of grants or loans depending on the income level. As a general rule, individuals may be entitled to grants and subsidized student loans when income level is less than $ 50,000.