<p>Single parent's income is $170k and we have $200k in assets. Our EFC turned out to be 70k, which my parent thinks is outragous. Is that justified or does this actually add up?</p>
<p>It seems a smidge high. With that income and those assets (but mainly the income) I would expect it to be pretty high, but more in the 40,000 to 50,000 range (unless there are assets or income in the student’s name. Those have a higher impact than parent’s income and assets.)</p>
<p>Of course, 40,000 to 50,000 would still be too high for aid at most places.</p>
<p>Your EFC is very high because your single parent has a high income and there is only ONE adult in the home. If there were two adults in the home, the EFC would be lower.</p>
<p>How many kids are in the home? If there are only 1 or 2 kids, then that further explains it. </p>
<p>If there is only one parent and one or two kids, then the formula is assuming that a good amount should have been saved and/or a good amount can afford to be borrowed…along with a good amount be paid out of current income.</p>
<p>Does your parent realize that families are living on a lot less income than that?</p>
<p>It sounds about right to me - for a household of 4 with 2 kids I figure it should be in roughly the $65-70K range. Having one adult in the household would bump it up a bit, as would there being only one child.</p>
<p>It seems too high to me. Can you check your state and federal tax amounts in the numbers below to see if they’re in the ballpark? Also the age of the parent will have an effect on the number given for the asset protection allowance - a higher allowance given for a high age & vice versa.</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>A. Age of older parent 50
B. Number in family 2
C. Number of children in college 1
D. Parent income $170,000
– parent income from work $170,000
E. Parent assets $200,000 </p>
<p>Parent FICA $13,005
Assumed federal tax %: 0.15
Parent federal income tax $25,500
Assumed state income tax %: 0.05
state income tax $11,900
Parent income protection allowance $16,230
Employment expense allowance $3,500 </p>
<ol>
<li><p>Total allowances $70,135 </p></li>
<li><p>Available income $99,865 </p></li>
</ol>
<p>Asset protection allowance $16,700
3. Discretionary net worth $183,300
Asset conversion rate 12%
4. Parent contribution from assets $21,996 </p>
<p>Adjusted available income $121,861
Contribution from AAI ( $7,926 + 47% of AAI over $29,300) $51,430 </p>
<ol>
<li> Parent contribution $51,430 </li>
</ol>
<p>Total EFC $51,429</p>
<p>^^^I would expect an EFC along the lines of what vballmom posted. She is estimating using the actual EFC formula.</p>
<p>Well it doesn’t really matter if the EFC is coming in at $52k or if it’s coming in at $70k if the family only has one child going to college. This family is going to be full pay or very close to it. </p>
<p>Either way, the parent is going to think it’s outrageous that the child will be a full pay student. </p>
<p>The EFC in the above post is still a bit iffy because we don’t know the parent’s age nor do we know how much federal tax is paid. I don’t know if the particular state might change the numbers, too…such as if the student lives in a no state tax state or low state tax state. We also are likely getting approx numbers for income and assets from the student…since he gave round numbers.</p>
<p>But again, when you only have one child going off to college, then having an EFC in the $50’s is going to seem outrageous to anyone who was expecting to qualify for aid.</p>
<p>Yes the state will make a difference. There are tables in the EFC formula that calculate allowances for state taxes based on the state of residence. The % of income can vary from 2% to 10% (New Jersey :eek:).</p>
<p>There are a ton of variables in the EFC formula. If income is from working it gets 7.65% allowances for FICA, if the income is not from working the FICA allowance is not available, so the EFC would be higher. The age of the parent affects the asset protection allowance (though single parents get a very raw deal for asset protection - a 50 year old single parent gets $16,700 while a 2 parent family would get $48,800). </p>
<p>it is a very complex formula, but vballmom has done a good job of estimating using the OPs numbers and some estimates, based on the limited information given. I ran the OPs numbers through the finaid EFC calculator (which is unfortunately out of date by a couple of years) and came up with an EFC in the same ballpark as vballmom. I wish the finaid people still updated their calculator - it used to be spot on back when I first was learning about FA. </p>
<p>Though the OP is not going to be eligible for much aid, other than loans, with EFCs anywhere in these ranges.</p>
<p>I have to say I am surprised when people with $170k income expect to qualify for aid. When my son started school our income was reasonable (though nowhere near $170k) and it never crossed our minds to apply for aid (I was very uninformed and did not know about Stafford loans). I though FA was for really poor people. Roll forward a few years, and our financial situation was drastically different due to job loss and severe health issues, and I discovered CC which was a godsend (learning about special circumstances adjustments for high medical expenses was like a miracle after the couple of years we had had).</p>
<p>^^^ FICA estimate is way too high. Since there is a single earner, you only pay 7.65% on the first $106K or so, 1.45% on the rest. So it should be around $9000 instead of $13000, this will add almost $2000 to EFC.</p>
<p>We don’t know if this number included student income/assets.</p>
<p>
Don’t know what the parent’s expectation was, but being told you can afford to carve 40% out of your paycheck before taxes will cause outrage, because for most people, no matter what their income, this is not realistic. That number is probably over 60% of income after taxes. How many people live on only 40% of their take-home? </p>
<p>(Yes I know EFC is supposed to include past savings and future income, but I don’t think most people look at it that way.)</p>
<p>^^^</p>
<p>True…but if you have an expectation of going to a pricey college, then why shouldn’t you have an expectation that you should have to pay for it?</p>
<p>Not only that but even for people with lower EFC, it can be a hardship. It’s all relative!</p>
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<p>Yes, you’re right, I haven’t incorporated the if/then/else logic into my spreadsheet. A lower FICA withholding means an increase in EFC, all other figures being equal. FICA in this case would be around $9000, not the $13,000 I have above.</p>