Determing the Expected Family Contribution and federal financial aid eligibility through the FASFA is complicated process. So many times a parent will call me and say something like, "we make $62,000 a year, so what do we qualify for?" Sadly, it isn't that easy. Our government has nearly perfected a confusing and highly technical calculation, called the Federal Formula, to determine what students qualify for in financial aid. If your financial aid administrator had to perform these calculations by hand, it would be much longer before you'd ever receive an award letter. Luckily, schools have the electronic resources to make these calculations. So what is in the formula that you don't see on the FAFSA? I've listed some behind-the-scenes allowances that are used in the formula:

• State and other Tax Allowance. This allowance is a percentage of the parents' total income and calculates the approximate amount of state taxes that were paid in state taxes for that calendar year. It's important that your parents' state of legal residence is reported accurately, as changing their state of legal residence could change your financial aid eligibility.
• Parent's Social Security Tax Allowance. The Federal Formula will exclude a certain portion of parents income based on their age. It used to be that student's reported their parents' age on the FAFSA, but that changed a couple of years ago and now you report the year they were born. Historically, the older the parent, the more income is protected.
• Income Protection Allowance. The government has created a formula that protects a certain amount of income that is used for daily living expenses, and is based on your household size and number in college. This income is not used in determining financial aid eligibility. The formula protects the following percentages of income:
• 30% for food
• 22% for housing
• 9% for transportation
• 16% for clothing and personal care
• 11% for medical
• 12% for family consumption
• This is a good place to mention that school's cannot look at your family's mortgage and home costs because it's already been considered with the 22% for housing. With medical, if your family paid large medical costs in the tax year of the FAFSA., the school may be able to make an adjustment to your financial aid eligibility if the amount paid exceeded the 11% already figured in. You will need to contact your financial aid office to see if a review is warranted.
• Employment Expense Allowance. This is an additional allowance for students with two-parent or single parent households where the parents work. The additional allowance takes into consideration extra expenses for housekeeping services, transportation, clothing, and food away from home. Basically, this allowance considers the fact that additional expenses are required for parents working outside the home.

The same allowances are given to students, although the percentages may vary. The Federal Formula also excludes a percentage of the parent and student assets. This is all probably vague and confusing, as it takes a seasoned financial aid professional to understand it all, but my reason for this post is provide you with some insight on how your financial aid eligibility is calculated. Believe me, I wish it were as easy as taking the family income and looking at a chart!

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