<p>For the majority of people the FAFSA EFC is driven more by income. On FAFSA the highest impact on the EFC of income over a certain (not very high) amount is 47%. The highest impact assets over the protected amounts will have is 5.6%. For students 50% of income over the protected amounts goes to the FAFSA EFC. 20% of student assets go to the EFC. Assets have to be very substantial for them to have a higher impact than income (parent income of $100,000, after taxes etc, over the 47% threshold would have an impact of 47,000 to the EFC. 100,000 in parent assets over the protected allowances would have an impact of 5,600 ish).</p>
<p>Profile may be quite different of course. I know some schools with generous aid for even highish income families include a caveat that the policies are based on “normal” assets for the income.</p>
<p>I’m an 18 year old student who is a little confused about financial aid.
My EFC is 27827, according to Fafsa, and my parents make around 90,000-ish a year. I thought the EFC was high but I realized it’s because in the investment box my parents have 94,000 from putting their savings into Bank CDs. Does that include the original amount put in the CD? Or only the interest accumulated from the CD? The way I see it, my parents being responsible safely invested their savings in a bank and so I have to pay more for college compared to a fiscally irresponsible parent who makes the same as my parent? Or maybe I’m wrong. Or is that expected for my parent’s income bracket. I guess I’ve been really naive about being covered for college. </p>
<p>The University of Rochester expects me to pay 43,000 (including room and board) a year, my parents have been saving since I was born and if I attend UofR I will still graduate with debt. I just don’t think I could do that to my parents though. </p>
<p>Thanks for anybody’s help.</p>
<p>EDIT/ Oh, I was typing this post when swimcatsmom posted. I think I understand better now.</p>
<p>I was in college from 1975 to 1979 and admittedly went to a state school whose admission standards at the time were pretty much limited to a high school diploma and a pulse, but the 4 years probably cost me less than $10,000 in total.</p>
The asset value you must report is the current value of the CD.That is the initial investment and the accumulated interest. Interest on CDs is also be taxable income so will be included as income in the AGI reported on FAFSA.</p>
<p>Is the interest already added to the income or do I need to add it myself? If it’s already added to my parent’s AGI, how does Fafsa know my parent’s net worth of current investment is from interest from bank CD’s because it includes original investment?</p>
<p>For the majority of people the FAFSA EFC is driven more by income.</p>
<p>That’s true, since most don’t have assets/savings much larger than their protected amounts. However, those who do have such big assets might get confused when they hear that FAFSA EFC is income-driven. </p>
<p>Haven’t we all seen posts where people say, “Why is my EFC so high, our income is only $70k?” But, then, after we ask about assets, they’ll mention rental property, investments, savings, etc.</p>
<p>FAFSA EFC is driven by 2 things: Last year’s income, and current non-retirement liquid assets. PROFILE takes a much more nuanced look at the picture; that will make matters worse for some, better for others.</p>
<p>FWIW – When I went through this dreadful process last year, I eventually had an epiphany: The purpose of financial aid is to make college possible, not to make it painless. That perspective somehow helped me.</p>
<p>I think that’s where the “wait a second…I have to pay more for the same school than someone whose family has the same income but spent instead of saved???” reaction kicks in.</p>
<p>the 4 years probably cost me less than $10,000 in total. >></p>
<p>My four years cost less than 5K. When I began college, there was 10K in my college fund and (with the 13% interest rates of the early 80s), 7K or so left at graduation. I used that to pay for my wedding and buy a car. I worked the last two years and used that money for my $175 month rent/food expenses.</p>
<p>What I think people sometimes forget when they jump into this mentality is that sometimes families don’t have a choice BUT to spend. For instance, my mom went back to school when I was 7, so instead of saving, we paid for that. My dad currently has cancer, so any “savings” is eaten by that.
I hate when people assume that because my family only has around 1500 in assets(plus 20k towards the house) that we spend it on cars and vacations. Yes, our cars are fairly new(I mean they’re a 2001 and a 2003…), but the majority of our money has gone to unavoidable things
I hate when people assume all the “spenders” are irresponsible or greedy</p>
<p>Just a reminder - page after page has people saying that they could not possibly take their EFC out of current income, or it’s 2/3 of their current income, or…etc. etc. etc.</p>
<p>No one expects you to pay that amount out of current income. As an earlier poster said, that is how much you can afford if you factor in savings from the past, loans from the future, summer jobs, etc. </p>
<p>The fact that you do not WANT to take out loans, or your parents do not WANT to sell their extra house, move your siblings to public schools, forgo a vacation, keep working past 62 or 65 or 70, etc. is not relevant. Of course it is relevant to you and your family, but not to either the taxpayers who will subsidize your aid, or the school which has needier people than you applying.</p>
<p>I know it seems harsh, but there’s simply no entitlement to higher education. The EFC has been tweaked repeatedly and is as fair as it can be. Once you decide to take into account every single family’s every single quirk, desire, etc., you can see where that would lead in a hurry!</p>
<p>Just remember that you can tell the COLLEGE all the details of your personal story and THEY can decide to increase your aid, etc. But be glad the formula itself LEVELS THE FIELD so personal stories don’t matter (if they did, there could be fraud etc.).</p>
<p>louise, I agree, ctmother’s post above is a great example. That’s why a PROFILE school is a better choice for some people than a FAFSA-only school, since as I recall, PROFILE does ask about medical expenses. FAFSA is a sledgehammer; PROFILE is a scalpel.</p>
<p>Do you think people do assume that? I get the sense that people kvetch about the family across the street whose income is the same, but who have nicer cars, vacations, clothes, iPhones, and whatnot…not the family across the street whose income is the same but who clearly are struggling and burdened with medical expenses, supporting extended family, etc. It’s not hard to tell those families apart. I cannot imagine bedgrudging a family who gets help they legitimately need.</p>
<p>^DeskPotato-I really wasn’t referring to you in that rant, so I’m sorry if you think I was
There are some posters on CC who seem to lump everyone together without a second look at circumstances</p>
<p>Our son is in the process of waiting on acceptances and fin aid packages. We have done our homework, he has lots of fin safety schools on his list. We are from the Boston area and while visiting schools in the South and locally, it seems like a tremendous amount of people applied and were accepted to Northeastern. We were wondering how they were going to fit all the accepted students into the University. We finally figured out that most kids who were accepted cannot afford to go there, so they must have to start with a big acceptance pool. Not to pick on Northeastern, but do you think that’s how these schools do it?</p>
<p>For S’s first 3 years of college we didn’t qualify for aid - and I didn’t expect to. We planned for college as if FA did not exist. BUT it’s frustrating when your EFC is $200 higher than the total cost of attending the college. Congratulations - you make exactly the LEAST amount of money you can make without qualifying for aid! What gets even more frustrating is filling out tax returns and finding out your household income is <em>just</em> over the limit for taking any credit for the cost of S’s tuition. I wonder if I didn’t work at my part-time job if we’d actually be better off, college-expense-wise. We are truly in the “too rich to be poor, too poor to be rich” category. </p>
<p>I don’t want to complain - we are blessed to be able to pay for our kids to go to college. But at the same time, D (hs senior) is seeing a lot of her friends who live in bigger houses than we do, with pools and hot-tubs, who drive newer and fancier cars than we do, who wear $100 jeans, being told by their parents that they can only go to colleges that offer them merit aid. Or worse, being told that they filled out the forms and are getting FA. We always assumed these people made more money than we do, but maybe we’re wrong and they’re in debt up to their eyeballs to support this lifestyle. </p>
<p>Sometimes I feel like we’re suckers for paying full price for S’s LAC. It’s a choice we made, but still… S knows a girl at college whose parents are both doctors, they have a waterfront home and another house in Florida and travel frequently, yet she gets FA. S probably has the oldest car in his frat parking lot - a 13 year old Camry - but he’s one of the few in his house who doesn’t get some form of aid. Maybe we’re doing something wrong…</p>
