I understand that part of the determination of EFC is the amount in the parent’s savings and checking accounts during the student’s junior year in high school. How is that exactly determined? Will the FASFA form ask for a bank statement from the last month of the year? For all twelve months of the student’s junior year? Or is it figured by calendar year average? School year average?
We are thinking of taking our savings and using it for shingles on our roof. If we do that, what timing would help us lower our EFC?
Run your numbers through the net price calculators at the schools that your child is interested in attending.
Keep in mind that most FAFSA only schools do not meet 100% demonstrated need, so your spending down will not net you any additional monies in financial aid. Also assets at the parents rate is assessed at 5.6%
You list the balance in each account on the day you file. Good advice that I got here was to take screen shots in case you are asked to verify.
FAFSA opens October 1. You can file at any time after that (the earlier the better, especially if any applications are EA or rolling), so have the roof work done and paid for (meaning check has cleared) prior to the date you file.
But a caution, which ties in to the reply above: Your EFC depends much more on income than on assets. So if the roof work reduces your savings by, say, $15,000, you’ll decrease the FAFSA EFC by about $800 – but it may well make zero difference in most schools’ NPCs. So do the roof work if it needs to be done, but not in the hopes of seeing much of a change in financial aid.
Just do the roof prior to filing FAFSA. So that would be during SENIOR year. Prior prior does not involve savings. You put the amount of assets that you have the DAY you file. If that’s $20k, that’s what you put.
Anyway…it sounds like you’re talking about savings that is less than $20k. I don’t remember what the exclusion is for married people, someone can chime in here.
Savings only adds 6% (after the exclusion), so be careful about unnecessary spending.
Your income is the big driver for EFC.
Also…remember, FAFSA-only schools rarely give great aid. Your EFC is meaningless to most schools.
If your income is about $100k, with modest savings, expect to have an EFC of about $20k. At many schools, an EFC beyond $7k means no free money awarded…just loans and some work-study.
My son is starting college in fall of 2018. We will be filing his first FAFSA for 2018/19 in October of 2017 and will report 2016 income and assets as of the day we file FAFSA, which will be in October of his SENIOR year of high school.
Parents get an asset protection allowance before the available assets are assessed at about 5% towards EFC.
for example the APA is about $20,000 for a 48 year old in a 2 parent household.
You will report the bank balances (if they exceed the parent asset protection allowance) from the day you submit the FAFSA (account snapshot). So if you get the new roof in the summer before senior year, or before you file the FAFSA in the fall, your balance will be lower.