<p>I just saw what our EFC is based on submitting the FAFSA with estimated numbers (I used our 2011 tax return, since 2012 should be close to that). Once I get all the W2s, etc, I will file our 2012 taxes and submit the changes to FAFSA.</p>
<p>But I just about had a heart attack--our EFC is $32k!!!! Now I know we are probably considered upper middle class, but if they think we have an extra $32,000 laying around?!?!?! </p>
<p>I need to look through the EFC calculation worksheet to figure this out, because that is just a crazy number. They are suggesting that we have an extra $2,600 each month. </p>
<p>Anyone else get that shock? Or any suggestions on what to look at to see if there is an error.</p>
<p>Your EFC is not supposed to be paid out of your income but from savings, income and loans. An EFC of $32K would mean you make >$100K (it tends to be ~25-33% of income). That is one reason it’s important to look for schools you can afford and where the student might get some merit aid.</p>
<p>I’m curious as to what percentage of AGI most people are getting for their EFC. For us, we are expected to use 16% of our gross income (not net). We are educators, middle middle class.</p>
<p>^Or op could also have substantial assets, which can also lead to a large EFC.</p>
<p>mamaduck ours is more like 50%, but it’s because of the assets, not the AGI itself.</p>
<p>*but if they think we have an extra $32,000 laying around?!?!?! *</p>
<p>As mentioned above, EFC’s from those with higher incomes are assumed to be paid for from savings (college funds, etc), current income, and future income (loans).</p>
<p>What’s even worse is that most schools don’t meet need, and when your EFC is that high, any “need” is often filled with loans and work-study (little or no “free money”)…so your child can’t help to reduce the EFC with Stafford loans. </p>
<p>many have unaffordable EFCs. It’s unfortunate that you’ve found out this late that your EFC may be too high. Hopefully, your child has already applied to a few schools that will give HUGE merit for stats. Modest merit won’t help you since those will just get applied to “need” and not reduce your EFC.</p>
<p>I see that your child applied to some OOS publics. At many of them, your EFC won’t count hardly at all. They’ll expect you to pay all costs except for any merit that you might get and a student loan.</p>
<p>Your instate public (PSU) will also expect you to pay all costs. It doesn’t look like your son’s stats are high enough for merit. </p>
<p>mamaduck…the percentage varies by income. Those with more modest incomes will pay a very low %. Those with higher incomes will pay 33%+ of their incomes. It seems (to me) that once you get above $80k, the % really starts rising. When you get into the 6 figures, the % can be 25%-33%+. And, of course, assets can come into play as well.</p>
<p>It was pretty much what I expected, and I was not surprised. I think it’s probably a fair EFC, but as has been pointed out few colleges meet need. We are lucky to have a tuition exchange benefit as part of my husband’s college job.</p>
<p>From memory, according to past EFC formulas (formulae? am never sure), the max EFC for higher incomes will be around 47% of adjusted available income (AAI = income less taxes and allowances and plus 12% of assets over protected asset allowances). Haven’t seen the 2013-2014 formula.</p>
<p>And the income that counts as “higher” is not very high.</p>
<p>Waiting, we had a similar EFC and a similar shock…I (foolishly) thought that such an EFC would mean a school that ran $50k+ would probably assume we had some need, but in our case that didn’t happen. The expensive schools admitted our D, and the aid package was essentially: parent plus and student loan.</p>
<p>I hope you have some affordable options. Do you have any college savings at all? </p>
<p>My D found some good merit & we did have savings; but economizing a lot, we’ve made it work with hardly any loan debt at all. Some schools just weren’t realistic (those 50k+ need-based-aid only schools). </p>
<p>Once I got over my shock, I realized that if we’d wanted those to be realistic, we should have saved a lot more! If we hadn’t saved at all, I’m sure D would be at local U, commuting, which would not have been the end of the world.</p>
<p>Every Friggin’ Cent. That’s what the EFC consists of, LOL. (not really laughing at all). </p>
<p>College involves past, present and future earnings on part of both the parents and the student. Kids should be saving for college, have summer jobs and maybe part time employment in their college plans, and they do have those Staffords available to borrow. Parents shoudl be putting something away for college and when we have kids in college, we have to tighten that budget even more and cut back so that a hunk of the monthly paycheck goes there, and then we have loan options to stretch the cost over say 10 years instead of 4. Also, looking at state schools, commuting opitons and schools with merit awards help too. Our second child went to a state school with a small scholarship, just $3500, but over 4 years that comes to a whopping $14K. State school costs are far less than most any option for us. Plus where he went, inexpensive student housing was availabe around the school and most upper classmen would go off campus for that reason. Cut the cost even more. Plus a job 8-12 hours a week provided some extra spending money as well as a summer job. </p>
<p>It’s tough for those of us trying to enjoy a bit of the good life and still pay for college. A lot of my friends have found that when their kids do get some financial aid, it comes down to the same cost as the state school. Still have that set amount to pay. Worse yet, most schools do not meet need, so the whole EFC thing is a big joke. I know a lot of people who would love to pay their EFC. Can’t find any school for that price that has a higher sticker price. Comes down again to commuting or state school options.</p>
<p>It hurt, I agree. I really wanted my kids to go to LACs, but we simply could not afford the sticker prices of them and the ones we most liked did not offer any discounts. We have saved, but not enough.</p>
<p>Waiting, we had a similar EFC and a similar shock…I (foolishly) thought that such an EFC would mean a school that ran $50k+ would probably assume we had some need, but in our case that didn’t happen. The expensive schools admitted our D, and the aid package was essentially: parent plus and student loan.</p>
<p>Yes, it does seem that a number of schools don’t give any “free aid” to those with highish EFCs. I think those are the schools that rely heavily on fed aid, state aid, and merit scholarships. So, if your child doesn’t qualify for any of those sources, there will be little or no “free money” in the aid pkg. </p>
<p>I remember looking thru the Viewbook of a well-known Jesuit univ with a COA of over $50k. In the back of the Viewbook had various income/aid scenarios. One example had the EFC of around $25k. The student was given a $5k merit scholarship, a Stafford loan, and the rest of the “need” was filled with a Plus loan (which of course would need to be increased if EFC wasn’t also affordable.) </p>
<p>Imagine the shock the family had when they only received $5k in free money with an EFC of $25k for a school that costs $50k.</p>
<p>WaitingInCPA…triplets EFC just came in at over $20K+ each…57% of AGI. I know it’s not the case, but it seems like you get penalized for saving, saving, saving. It’s like anything else…you’d better have a lot…or nothing. If you are in the middle, look out!</p>
<p>I remember the shock when my one son got offered a $30K award, and it hit me that it still meant another $30K to cover. The costs are getting up to the mid 60’s at some schools with some programs, Throw in visiting your student, travel if it involves air fare, high rents in some locations, and …oww,… it does hurt. It’s really tough when your work it out that first year and it’s very tight, but you make it work, and then the second year the cost of upper class housing is more, the price has gone up, your kid gets an unpaid internship or other such opportunity that cuts into working for pay, some emergency occurs at school or home, some great program opportunity comes up or a need to take summer courses due to major change or other reason. All of these things can and do happen so it’s not wise to budget to the dime.</p>
<p>We had NO college savings…not a nickel. Our EFC was in the same range or higher because of our incomes. The reality is that your EFC is based largely on your income. Generalized rule of thumb for families earning over $100,000…your EFC will be 25% to 33% of your gross income…higher amount for higher wage earners or those with significant assets.</p>
<p>The bottom line is that families are “first in line” to pay for college. There are some ways around that (merit scholarships, some gov’t aid for low income, or a few super generous schools), but in most cases, families are expected to pay for most/all costs. </p>
<p>For many students (especially those with good-but-not-great stats), the only affordable choice is to commute to the local public. Paying $25k+ per year to “go away” to an instate flagship isn’t affordable to many families…especially those with more than one child.</p>
<p>This year, I was shocked at what some state flagships are charging OOSers. Ouch. UTexas-Austin caught my eye. I knew Michigan and some of the Virginia schools were priced up there with the privates, but itpolymicrogyria looks like other schools are joining them. OOS colleges offered my kids some nice options to go away to new horizons, out of the state without paying private prices that we just did not want to fund. But not those. I cannot see paying as much as a private school for those publics. They are off of our list.</p>
<p>I know what the part of the problem is–we set up 4 PA-529 accounts and have equally funded them for our sons. The problem is that FAFSA views the lump sum as a Parental Investment–not just the account for the son that is headed to college. So we are penalized for actual trying to save for each son.</p>
<p>Combine that 529 money that is supposed to be for each son and our combined income being above 100k (but not that much above), and apparently you get an EFC of 32k.</p>
<p>How about they take a look at what it costs to support a family of 6? And we don’t live a fancy life!</p>
<p>Maybe one of these days the State(s) and Federal government will take a long at the Public schools and start asking questions about why tuition rates continue to skyrocket. Pennsylvania is the home of the most expensive in-state public school in the country–Penn State. West Virginia and NC State costs for out of state aren’t that much more expensive than PSU in state–and that just isn’t right!</p>
<p>Would it benefit us to convert each of the 529 to be owned by the son is was set up for? Assuming I can do that.</p>
<p>The good news just keeps coming. It is not an option to move the 529 accounts to be owned by the sons they were set up for. You have to be 18 to be the owner of the account.</p>
<p>Assets in the kids names are assessed at a much higher %…I think at 25%. The assessed rate as a parent asset is about 6%. And, parents have about a $45-50k asset exemption. Students have none.</p>
<p>Before you do any financial gymnastics (changing names), you need to determine what aid you might get if your EFC were a bit lower…say $28k. At the OOS publics, you’d get nothing. At PSU, you’d get nothing. Either way, you’re only going to get loans. </p>
<p>Much of your EFC is income driven. </p>
<p>How much is in each 529?</p>
<p>Edited to add…I see that changing names isn’t possible. Well, it may not have made any real difference considering where your son has applied. Keep in mind that the schools that give the better aid usually require CSS Profile.</p>
<p>Is there a grandma or other relative that can own the accounts but have FBO the kids involved. Even moving them to the kids would not be helpful for PROFILE purposes since they look at sibling accounts. We know a blended family where some of the kids have college accounts funded by grandparents and deceased parent, whereas the steps do not. Those accounts are considered family assets for profile purposes.</p>
<p>I thought that 529 is considered a parental asset and therefore is counted at 6%. Income and real estate ownership produce the large EFC. Maybe you can quickly take out a HELOC since you will need the money to pay for college while reducing equity in the house? Not sure whats best, just throwing some ideas.</p>
<p>We did not do FAFSA yet, but the EFC from the net price calculator is really ouch 48K! The first time I filled out the calculator our EFC was much lower and seemed affordable. Probably I made an error because the site used general terms “income”, savings" etc. Now that I used another profile schools calculator that specified the lines on IRS 1040 form, the EFC is 48K. </p>
<p>Cptof thehouse: A lot of my friends have found that when their kids do get some financial aid, it comes down to the same cost as the state school. How can we send our son to a private school with this EFC? In contrast the same numbers entered into Harvards calculator produced 17K EFC 
That is just not fair. We do have college savings in 529 (enough for 1year at this EFC), own a house and fund retirement accounts at 10-15% as my husband will hit 65 when the next kid goes to college.</p>