<p>I had to send off some numbers to a couple schools for DD (recruited athlete). I think I did something wrong on the estimator though, it shows our EFC as half (a bit over actually) of our take home pay. Is that right? If so YIKES. We would like to eat sometime over the next 4 years.</p>
<p>Not enough info to provide much help. If you have a large amount of assets and/or have a large amount withheld for taxes or contribute a large amount to a retirement account(which gets added back in because it’s considered discretionary) or pay a lot for your health and dental insurance, I suppose it could be half of take home pay. Usually when the EFC is stated as a percentage of pay, it’s gross pay, not take home. There are a lot of variables in take home pay.</p>
<p>That said, it sounds high. You didn’t include assets in formal retirement accounts, did you? It also could happen if the student’s income and assets are unusually high.</p>
<p>Our take home income when our first was in college was about $90,000 a year. Our gross income was about $125,000 a year. Our EFC was $44,000…about a third of our gross income. Is that the scenario you are looking at? As a rough GUESTIMATE, EFC is between 1/4 and 1/3 of your GROSS income at our income level. We did not own a second home…or have significant assets above the protected allowance.</p>
<p>Not enough info, SteveMA. While income is the primary driver in determining the family contribution, assets are also taken into consideration. Things like second real estate holdings, student held assets, parent held assets if above the protection allowance, can really impact the EFC.</p>
<p>Here’s a link to the 2013-2014 FAFSA EFC formula guide. It looks daunting but it’s not so bad to go through and will give you an understanding of how each bit of information is affecting your EFC.</p>
<p><a href=“http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf</a></p>
<p>Yep. Depending on your take home pay. See it all of the time. A lot of things that you may have deducted out of your pay are added back in, like HSA and 401K amounts. </p>
<p>It doesn’t much matter, in that EFC guarantees nothing other than the PELL which you are probably way over and unsub Staffords for which your students are eligible regardless of income.</p>
<p>Don’t you have two of them going to college? The amount should have been split in half for the parent contribution amount.</p>
<p>I agree that FAFSA EFC is generally 1/4 of GROSS income.
PROFILE is closer to 1/3 of gross.( or if your gross income is $80,000 +)
Student held assets bumps it up, as does being self employed- having rental income & if your retirement funds are not in retirement accts.</p>
<p>This is why many families say that 100% need met schools are still out of the question because their EFC is high.</p>
<p>Your “take home pay” is rather irrelevant. That wouldn’t include taxes, deposits to 401k plans, payments for health insurance, etc. </p>
<p>What % is it of your AGI?</p>
<p>Don’t you have two of them going to college? The amount should have been split in half for the parent contribution amount.</p>
<p>If this is a CSS school, then it may not split in half, it more likely would split 60/60. That said, the OP doesn’t indicate that the estimate is based on 2 in school, unless he’s calculated for that as well.</p>
<p>I agree that FAFSA EFC is generally 1/4 of GROSS income.</p>
<p>It seems that once you approach the 100k mark, then FAFSA EFC can be 30-33% of AGI.</p>
<p>* I know we are STILL struggling with our DD to grasp the fact that her #1 choice is still leaving a gap of $25,000 where the rest of her schools are coming in at $10,000 or less. With 2 going off to school, the $25,000 is NOT happening.*</p>
<p>From your other thread… ^^^</p>
<p>Are you saying that your D’s school is expecting you to pay $25k and you’re guessing that your son’s school will expect a similar amount, and that $50k is half of your “take home” income?</p>
<p>It sounds like you’re doing the right thing…just telling both kids what you WILL pay, and that’s that.</p>
<p>School is supposed to be paid from current income, savings, and loans (last resort). If you are missing or unwilling to provide any of these you either need to find cheaper schools and/or schools that give scholarships for your child’s stats.</p>
<p>*School is supposed to be paid from current income, savings, and loans (last resort). *</p>
<p>That is a good point. Comparing costs to only income can be misleading. The calculations assume that families with good incomes should have saved and can borrow, and those funds added to some of current income will go towards EFC.</p>
<p>I put a ceiling on what we, as parents could pay for our kids. One was way under going to one of our state schools. One went to a private LAC with merit, and this one is at an OOS where the COA comes to slightly above our contribution. He had money saved, works summers, was willing to work during the school year and the Staffords were buffers. </p>
<p>Well, he had an eye opening first year last year in seeing why one doesn’t want to spend right up to the limit with one’s back to the wall. Several things went wrong, as well as a great opportunity costing money and taking time (from work) arose. Had he used the Stafford loan in his planning, he would be truly with no margin. As it is, he took the entire $5500 right before the end of the year, and basically funded an extra summer school course at a private college of his choice and used the rest to make up for the work he could not do as planned. </p>
<p>His actualy cost was a bit under COA last year, but is higher this year due to having a nicer dorm room as upperclassmen tend to get. He had no choice in the matter as the rooms are assigned by lottery, and swallowing that extra cost isn’t making him happy. But he is working this term at a pretty good paying job and wil have paid for that course he took this past summer, and is paying the interest on his loan and intends to pay a quarter of it off, if he is on track at the end of this year, and continue on that schedule. NOW, he sees a lot of things he did not. </p>
<p>Steve, we are paying with some savings, some scrimping and some borrowing. As are our kids. All of our kids have savings, work and have the loan option. Make sure that your kids asset values are zero the day the FAFSA and Profiles are completed as their EFCs will be immediately affected by every dollar they have. They can reimburse you for expenses, and you can use those funds to open college account in your name for their benefit.</p>
<p>Ok, it looks like I did something wrong. I was using a pay-stub and with the way DH is paid it’s a bit confusing. I know I forgot to take out our contributions to our health insurance, which I don’t think is considered taxable income and therefore wouldn’t be what would be put in line 1 of the 1040, correct? He has 3 different amounts on his paystub for “gross income”, I used the biggest one. Dh got a significant raise this year so that is why it’s a bit confusing. I just used last year’s tax returns for guestimating but I think I used the wrong “gross” number. I guess I would rather error on the side of too much income reported right now vs not enough and then get a big surprise later at how much we have to pay.</p>
<p>The kids know exactly how much we will pay for their school each year and it isn’t anywhere NEAR 1/2 of our take home pay :D. Most of the schools they have applied to come within that range after merit/athletic aid so that is good:D.</p>
<p>As for assets, no I did not include any retirement accounts, we are upside down on our mortgage thanks to a job transfer in 2006 and buying at peak housing prices in our area…so on paper we basically have no assets.</p>
<p>Well the bright side is i guess, if you rented instead of buying when you had to relocate, some of that money might have been sitting in the bank & need to be reported.
;)</p>
<p>* I know I forgot to take out our contributions to our health insurance, which I don’t think is considered taxable income and therefore wouldn’t be what would be put in line 1 of the 1040, correct? He has 3 different amounts on his paystub for “gross income”, I used the biggest one. Dh got a significant raise this year so that is why it’s a bit confusing*</p>
<p>I could be wrong, but I’ve never heard anyone here on CC say that you’re supposed to take out healthcare contributions.</p>
<p>You say that your H has 3 “gross incomes” on his check? Does the high one include contributions to 401ks and/or flexible spending accts???</p>
<p>^ I’ve always started with the gross that appears on the W-2. Even DH’s final December paystub usually does not reflect the totals on the W-2. The 3 different amounts you see on a stub could be three tallies for different tax witholding calculations. Where HC is a factor is on the CSS.
What forms, what estimator? Fafsa or NPC?</p>
<p>mom2collegekids–what I mean is that I used his “real” gross, before any deductions. Since we pay our health premiums pre-tax, his “real” gross is not the same as what shows up on the W-2 as his “gross”. It’s only about $5000 so nothing all that different. This was the FAFSA forecaster along with the NPC for this particular school–which is what they use for athletes for pre-reads.</p>
<p>I BEG parents to run the EFC Fafsa forecaster NO LATER than when their kid is in 10th grade. </p>
<p>They ignore me and are AGHAST at the number (when they get around to it) and invariably say, is that for 1 year or all four years total.</p>
<p>mom2collegekids–what I mean is that I used his “real” gross, before any deductions. Since we pay our health premiums pre-tax, his “real” gross is not the same as what shows up on the W-2 as his “gross”. It’s only about $5000 so nothing all that different. This was the FAFSA forecaster along with the NPC for this particular school–which is what they use for athletes for pre-reads.</p>
<p>Are you saying that you use a Flexible Spending Acct to pay your health premiums? </p>
<p>I’m not sure that contributions to FSA accounts aren’t part of AGI. anyone know?</p>
<p>Wouldn’t an FSA that is taken out pre-tax, get added back in for the FAFSA?</p>
<p>That’s possible, too. I just don’t think the amount is kept completely off of FAFSA.</p>