The Asset Protection Allowance is a component of the financial aid formula used in the United States to determine a student's eligibility for need-based aid, allowing parents to shield a portion of their assets from being counted in the expected family contribution. This allowance decreases as the age of the older parent increases, reflecting an assumption that older parents are closer to retirement and thus need to preserve more assets for future security.

Asset Protection Allowance

Financial Aid Formula

Student eligibility

Need-based aid is financial assistance provided to students based on their financial circumstances, aiming to make higher education accessible regardless of economic background. It considers factors like family income, assets, and other financial obligations to determine eligibility and the amount of aid awarded.

Need-Based Aid

Expected Family Contribution (EFC) is a measure used by colleges in the United States to determine a student's eligibility for financial aid based on their family's financial situation. It takes into account factors such as income, assets, and family size to estimate how much a family can reasonably contribute to the student's education costs.

Concepts

Relevant Degrees

Your Lessons