Chuck Moore, CCFC, CAMC, CAFC
Louisville, Kentucky
502-721-8646 ▪ tuition2@insightbb.com
www.collegeliteracyacademy.com
www.gearuped.com
How To Complete
The FAFSA
How The EFC Is
Calculated
FAFSA Formula Similar To Tax Formula
• Income Protection Allowance
• Asset Protection Allowance
• Employment Allowance
• Deductions For Certain Taxes Paid
Income Protection Allowance
Family
size
Number in college
1
2
2
$17,100
$14,170
3
21,290
18,380
15,450
4
26,290
23,370
20,460
17,530
5
31,020
28,100
25,190
22,260
19,350
6
36,290
33,360
30,450
27,530
24,620
3
4
Parents of Dependent Students
5
Income Protection Allowance Example
Number In Household
4
Number In College
1
AGI:
$85,000
Income Protection Allowance
$26,290
Available Income
$58,710
Asset Protection Allowance
Asset Protection Allowance Example
Oldest Parent
46
Allowance
$37,100
Exposed Assets
$50,000
Asset Protection Allowance Example
Oldest Parent
46
Exposed Assets
$50,000
Allowance (minus)
$37,100
$12,900
$12,900 X 5.65%
Adjusted Available Assets
$729
($729 Is Added Into Your Adjusted Available Income)
Employment Allowance Example
Number Of Parents Working
2
Lowest Earner Amount
$26,000
Employment Allowance %
35%
Maximum Allowance
$3,500
(Single Wage Earners Do Not Get An Employment Allowance)
Employment Allowance Example
Number Of Parents Working
2
Lowest Earner Amount
$26,000
Employment Allowance %
X 35%
$9,100
Maximum Allowance
$3,500
(Single Wage Earners Do Not Get An Employment Allowance)
Employment Allowance Example
Number Of Parents Working
2
Lowest Earner Amount
$7,000
Employment Allowance %
X 35%
$2,450
Maximum Allowance
$2,450
(Single Wage Earners Do Not Get An Employment Allowance)
Tax Allowance Example
Federal Taxes
$ 5,250
Social Security Taxes
$ 6,120
State Taxes 4%
$ 3,200
Total Tax Allowance
$14,570
Total Allowance
Income Allowance
$26,290
Asset Allowance
$
Employment Allowance
$ 3,500
Tax Allowance
$14,570
Total Allowances
$45,089
729
Adjusted Available Income Of Parents
Total Income
$85,000
Total Allowances
-$45,089
Adjusted Available Income
$39,911
Adjusted Available Income Of Parents
If AAI is—
Then the contribution is—
Less than −$3,409
−$750
($3,409) to $15,300
22% of AAI
$15,301 to $19,200
$3,366 + 25% of AAI over $15,300
$19,201 to $23,100
$4,341 + 29% of AAI over $19,200
$23,101 to $27,000
$5,472 + 34% of AAI over $23,100
$27,001 to $30,900
$6,798 + 40% of AAI over $27,000
$30,901 or more
$8,358 + 47% of AAI over $30,900
Adjusted Available Income Of Parents
Available Income
$39,911
Adjustment Factor
- 30,901
Adjustment Factor Left
$ 9,010
Adjusted Available Income Of Parents
First $30,901 Assessed
$8,358
Second $9,010 Assessed 47%
+4,235
EFC Of Parents
$12,593
Student’s EFC
First $6,130 - $0 (50% thereafter minus taxes)
Assets 20% (No Asset Protection Allowance)
Student’s EFC
Student’s Income
$ 3,850
Student’s Assets
$10,000
Student’s EFC
Student’s Assessment From Income $3,850 - $6,130 = $0
Student’s Assets $10,000 X 20% = $2,000
Students EFC = $2,000
Total Family’s EFC
Parents’ EFC
$12,593
Student’s EFC
+ 2,000
Family’s EFC
$14,593
Student’s Financial Need
Total Cost Of Attending
$18,000
EFC Of Family
- 14,593
Financial Need
$ 3,407
Student’s Attends Private University
Total Cost Of Attending
$38,000
EFC Of Family
- 14,593
Financial Need
$23,407
BIG PROBLEM
How Is This Family Going To Pay Their
Expected Family Contribution Of
$14,593
This is 14% of Gross Income or;
17% of Net Income After Taxes
Chuck Moore, CCFC, CAMC, CAFC
Louisville, Kentucky
502-721-8646 ▪ tuition2@insightbb.com
www.collegeliteracyacademy.com
www.gearuped.com