1. Chuck Moore, CCFC, CAMC, CAFC Louisville, Kentucky 502-721-8646 ▪ tuition2@insightbb.com www.collegeliteracyacademy.com www.gearuped.com

2. How The EFC Is Calculated

3. What Is College Financial Aid Student financial aid refers to funding intended to help students pay educational expenses including tuition and fees, room and board, and books/supplies, and miscellanious costs, for education at a college, university, or private school. Financial aid may be classified into two types, merit- based or need-based.

4. Most student aid is provided by the federal government. Students received more than $109 billion in federal aid during the school year of 2011–2012. Most federal student aid is awarded as grants and low-interest loans. Where Does Most College Financial Aid Come Form

5. The Financial Aid Process FAFSA and CSS Profile

6. The FAFSA cannot be filed until after January 1 of the student’s senior year of high school. Furthermore, it must be filed each year the student is seeking financial assistance while in college. The Federal Methodology Formula that calculates the family’s EFC is based mainly on the parents’ and student’s income and assets minus certain deductions and allowances.

7. Completing The FAFSA Simple To Complete Complicated To Understand

8. FAFSA Formula Similar To Tax Formula Income Protection Allowance Asset Protection Allowance Employment Allowance Deductions For Certain Taxes Paid

9. Income Protection Allowance Family size Number in college 12345 2$17,100$14,170 321,29018,38015,450 426,29023,37020,46017,530 531,02028,10025,19022,26019,350 636,29033,36030,45027,53024,620 Parents of Dependent Students

10. Income Protection Allowance Example Number In Household4 Number In College1 AGI:$85,000 Income Protection Allowance$26,290 Available Income$58,710

11. Asset Protection Allowance

12. Asset Protection Allowance Example Oldest Parent46 Allowance$37,100 Exposed Assets$50,000

13. Asset Protection Allowance Example Oldest Parent46 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)

14. 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)

15. 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)

16. 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)

17. Tax Allowance Example Federal Taxes $ 5,250 Social Security Taxes$ 6,120 State Taxes 4%$ 3,200 Total Tax Allowance$14,570

18. Total Allowance Income Allowance $26,290 Asset Allowance $ 729 Employment Allowance$ 3,500 Tax Allowance$14,570 Total Allowances$45,089

19. Adjusted Available Income Of Parents Total Income $85,000 Total Allowances-$45,089 Adjusted Available Income $39,911

20. Adjusted Available Income Of Parents If AAI is—Then the contribution is— Less than −$3,409−$750 ($3,409) to $15,30022% 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

21. Adjusted Available Income Of Parents Available Income$39,911 Adjustment Factor- 30,901 Adjustment Factor Left$ 9,010

22. Adjusted Available Income Of Parents First $30,901 Assessed$8,358 Second $9,010 Assessed 47%+4,235 EFC Of Parents$12,593

23. Student’s EFC First $6,130 - $0 (50% thereafter minus taxes) Assets 20% (No Asset Protection Allowance)

24. Student’s EFC Student’s Income $ 3,850 Student’s Assets$10,000

25. 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

26. Total Family’s EFC Parents’ EFC$12,593 Student’s EFC+ 2,000 Family’s EFC$14,593

27. Student’s Financial Need Total Cost Of Attending$18,000 EFC Of Family- 14,593 Financial Need$ 3,407

28. Student’s Attends Private University Total Cost Of Attending$38,000 EFC Of Family- 14,593 Financial Need$23,407

29. 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

30. Chuck Moore, CCFC, CAMC, CAFC Louisville, Kentucky 502-721-8646 ▪ tuition2@insightbb.com www.collegeliteracyacademy.com www.gearuped.com