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 3 4 5

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

Parents of Dependent Students 

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 ExampleOldest 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 $ 729

Employment Allowance $ 3,500

Tax Allowance $14,570

Total Allowances $45,089

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