It's that time of year again when college parents across the country are forced to grapple with the complicated process of completing the FAFSA application in order to determine how much federal financial aid they may be eligible for. This aid takes the form of grants (Pell Grants, Federal Supplemental Educational Opportunity Grants, SMART Grants and TEACH Grants) or loans (Perkins Loans and Subsidized Stafford Loans) and is determined by the following formula:

Cost of Attendance
minus Resources (employer educational assistance funding, VA educational benefits, scholarships, non-family funding)
minus Expected Family Contributions
= Financial Need.

The Expected Family Contribution amount is determined as follows:

1. Parents' Contribution From Income which = Parents' Adjusted Gross Income plus Exempt Income plus 401(K) Plan Contributions plus IRA Distributions plus Workers'  Compensation Benefits plus Military Allowances plus untaxed Social Security Benefits plus Child Support plus Veterans Disability, plus Veterans Pension Benefits received minus Income Protection Allowance minus Federal Income Taxes minus Social Security Taxes minus State Allowance minus Employer Expense Allowance. Multiply this amount by 22%-47%.
2. Plus Parents' Contributions From Assets which = Total Parents' Assets minus Annuities minus Cash Surrender Value of Life Insurance minus Retirement Accounts minus Financial Aid minus Personal Assets (cars, computers, various equipment) minus Family Residence minus Family Farm minus Family Business (100 of fewer employees). Multiply this amount by 2.64%-5.64%.
3. Plus Student's Contribution From Income which = Student's Adjusted Gross Income plus Exempt Income plus 401(K) Plan Contributions plus untaxed Social Security Benefits minus Income Protection Allowance minus Federal Income Taxes minus Social Security Taxes minus State Allowance minus Employer Expense Allowance. Multiply this amount by 50%.
4. Plus Student's Contributions From Assets which = Total Student's Assets minus Annuities, minus Cash Surrender Value of Life Insurance minus Retirement Accounts minus Financial Aid minus Personal Assets.

Adding items 1-4 results in the Expected Family Contribution, which is the amount that the parents' and college student are expected to contribute to the cost of college. Of course, the devil is in the details, but this gives you an idea as to how to determine what, if any, you can expect to receive in financial aid. Whether that financial aid is in the form of grants or loans depends on your income level. As a general rule, individuals may qualify for grants and subsidized student loans when their income level is below $50,000.