About Parents' Contribution

The Institutional Methodology applied by most university financial aid offices include numerous allowance options in relation to the parents' income and real assets to determine adjusted available income. Allowances are given out on the income's base-year:

• Federal & FICA taxes
• State & local taxes (varies per state)
• 'Cost-Of-Work' allowance for single parents
• Uninsured medical expenses
• Private school tuition coverage
• Income-protection allowances
• College education allowances

Based on the 'Consumer Expenditure Survey', a state census that accurately reflects the real spending behaviors of families, the income protection allowance is determined and adjusted accordingly every year. Such an allowance will not always reflect a particular family's real expenses.

Universities and colleges might also factor in the real assets of the family in determining the parents' contribution toward the student's academic fees. Home and property values are also included in the computation of the institutional methodology. However, retirement schemes like the 401k and IRA accounts are not included in the computation.

In cases where the parents are separated or divorced, it is still expected that both parents will support their child's academic fees.