<p>Is this normal? My current EFC seems a little high to me. We definitely cannot afford 35,000 a year. Also, does Pension count in EFC? Cuz if it doesn't that would drop us to $80,000. What can my family do about this? I plan on applying pretty much exclusively to universities that meet all need. (I'm a junior)</p>
<p>Yes, that’s very normal. </p>
<p>If your parents can’t afford that, I’d suggest that you opt for an in-state public or look for colleges that might offer you merit aid.</p>
<p>It seems way too high although you don’t mention if your family has high assets. Check your numbers against these, which assumes assets at the level of the protection allowance:</p>
<p>A. Age of older parent 50
B. Number in family 3
C. Number of children in college 1
D. Parent income 110000
– parent income from work 110000
E. Parent assets $48,800 </p>
<p>Parent FICA $8,415
Assumed federal tax % 0.10
Parent federal income tax $11,000
Assumed state income tax % 0.05
state income tax $7,700
Parent income protection allowance $20210
Employment expense allowance $3,500 </p>
<ol>
<li> Total allowances $50825 </li>
<li> Available income $59175 </li>
</ol>
<p>Asset protection allowance $48800
3. Discretionary net worth 0
Asset conversion rate 12%
4. Parent contribution from assets 0</p>
<p>Adjusted available income $59175
Contribution from AAI ( $7,926 + 47% of AAI over $29,300) $21967</p>
<ol>
<li> Parent contribution $21967</li>
</ol>
<p>Total EFC $21967</p>
<hr>
<p>If your assets are > $50,000, multiply the amount over $50K by 5.56% and add that number to your bottom line EFC.</p>
<p>Thanks! I will show that to my dad! And, no, I’d really rather not go instate. I’m aiming 4 ivies, lol. But I do have a financial safety.</p>
<p>vballmom…you have used this formula a few times of late. I have to say…I’m wondering how accurate it is. When our income was $115,000 a year…family of 4, our EFC was over $40,000…and NO we not have a lot of assets. Oldest parent was over 50 when first kiddo applied to college. </p>
<p>It has been our experience (and the experience of a LOT of people we know) that the family contribution is between 1/4 and 1/3 of your GROSS income. We have known a few people with lower family contributions than that…they had families with 5 or 6 children.</p>
<p>I agree with calmom, that your EFC is normal. </p>
<p>However, without knowing your stats, I would not automatically rule out a private school. With income of 110k, many private schools might offer your family a financial package that is MORE attractive that what you would pay at a state school. For example, at HYP, tuition, room and board would, on average, be equal to 10% of your family’s AGI or $11,000.</p>
<p>Untaxed portions of social security pension are not reported on FAFSA. But with the income level you mention all SS pension would be taxable. </p>
<p>Yes, 35,000 sounds normalish for a $110k income. Perhaps a tiny bit high, unless there are also some assets involved.</p>
<p>
if $35,000 of the income is from pensions then that will not attract FICA so that will reduce the FICA allowance.</p>
<p>The formula comes from the 2011-2012 form. I’ve included assumptions for age of older parent (affects asset protection allowance, from table A5), number of people in household (affects income protection allowance, table A3) and state tax rate (table A7). It doesn’t take into account values for single parent income protection, a higher (or lower) Federal tax rate, and more than one child in college. It also doesn’t take into account student income/assets. So, it’s not a perfect fit for all situations, my intent was rather to give a ballpark number. </p>
<p>I have this all in a spreadsheet so it’s easy to run different scenarios. Of course, each family should do the calculations themselves to be sure they’re capturing their own specific financial situation.</p>
<p><a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf</a></p>
<p>The formula is tweaked every year, so it’s possible that the same income one year would yield a different EFC the next, all other things remaining equal.</p>
<p>Well, my dad sees the problem I guess. Our assets total 150,000 b/c we have our house paid off. oops. crap.</p>
<p>I guess my question…if this “formula” is so accurate, how come so many of us have EFC’s in the 1/4 to 1/3 of gross income range as opposed to 1/2 of that amount which is what our formula would yield for my family? Our assets were BELOW the amount protected by the FAFSA formula…and when our kids enrolled in college, that included home equity.</p>
<p>runline: Your primary home is not a reportable asset. </p>
<p>If your total assets are $150,000 then there are some allowances for assets (depending on number of parents and age of older parent). 5.5% of assets over that amount go to the EFC.</p>
<p>Also if there is any student income or assets that can have a big impact on the EFC.</p>
<p>Yep, that would raise your EFC quite a bit. Here’s a new calculation, incorporating swimcatsmom’s note about untaxed pension:</p>
<p>A. Age of older parent 50
B. Number in family 3
C. Number of children in college 1
D. Parent income $110,000
– parent income from work $80,000
E. Parent assets $150,000 </p>
<p>Parent FICA $6,120
Assumed federal tax %: 0.10
Parent federal income tax $8,000
Assumed state income tax %: 0.05
state income tax $5,600
Parent income protection allowance $20,210
Employment expense allowance $3,500 </p>
<ol>
<li><p>Total allowances $43,430 </p></li>
<li><p>Available income $66,570 </p></li>
</ol>
<p>Asset protection allowance $48,800
3. Discretionary net worth $101200
Asset conversion rate 12%
4. Parent contribution from assets $12144</p>
<p>Adjusted available income $78,714
Contribution from AAI ( $7,926 + 47% of AAI over $29,300) $31,151 </p>
<ol>
<li> Parent contribution $31,151 </li>
</ol>
<p>Total EFC $31,150</p>
<p>For FAFSA the equity of your primary residence is not counted as an asset.</p>
<p>Haha I think my dad just screwed up the whole thing lol. When he fixes his mistakes, hopefully it will be a little lower.</p>
<p>To the OP: do not include your home equity as an asset. Only include the value of brokerage, checking, saving and 529 accounts. Does that make a difference?</p>
<p>thumper - if you’d like, I can send you my spreadsheet and you can plug your numbers in to see if it comes close to your official EFC. Might be a good exercise.</p>
<p>One difference between this year and last year’s formula was that the asset protection allowance is lower this year, which will result in a higher EFC this year than last (all other numbers remaining equal).</p>
<p>As I noted on another thread, my EFC is 44% of my gross income, so count me in that club of people with painfully high EFCs.</p>
<p>I just don’t understand this formula…and how it seems to work. We entered every number on our FAFSA forms accurately. Our EFC was over $40K every year. Our income was about $115K the first year. By the end, our EFC was $44,000. Using Vballmom’s formula, our EFC would have been 1/2 that amount. It wasn’t.</p>
<p>It seems that others have EFC amounts more in line with what we experienced. Just wondering what the problem is. </p>
<p>And yes…I know that EFC doesn’t use primary residence.</p>
<p>Again…income $115,000. Oldest parent 50 ish. Family of 4. One in college. EFC…$40K. That was OUR experience (actually just checked…it was “only” $38K the first year).</p>
<p>Idk what to do. We don’t know anything about fin aid. My dad said on the EFC calculator it asked for the value of the home or whatever. With an EFC of 35000, should I bother applying for fin aid?</p>
<p>thumper, I just took a quick look at the 2008 formula and found these differences: income protection allowance was lower (leading to a higher EFC than 2011) and the contribution from income baseline was lower (leading to a higher EFC than 2011). It’s possible that other differences added up as well resulting in a higher EFC for you, but it does seem odd that the delta is so significant.</p>
<p>runline what EFC calculator are you using? For Profile (a different form than FAFSA) you’ll be asked for your home equity, but FAFSA will not ask for that information.</p>
<p>The federal FA forms do not require home equity. But the institutional forms may. </p>
<p>have you actually filed FAFSA? FAFSA does not ask for the primary home.</p>