Valedictorian, 4.0 GPA, National AP Scholar son has been accepted to a couple of prestigious private universities. Of course we are delighted.
But my EFC is $70,000? No way, not even close. I barely bring that much home after taxes.
Here’s the thing. I’m an extremely frugal guy. I’ve never borrowed a dime to buy any the several used cars I’ve owed (never new). I had a mortgage, but I worked & saved really hard, and I paid it off. I’ve been saving diligently for retirement (I’m 57). So I have a paid-off house, a paid-off used car, and something in my 401k (half of which I’m going to lose in the divorce, but that’s another story).Valedictorian son has a modest trust account bequeathed to him by a late uncle.
I’ve never paid a dime of interest on a credit card. I hate debt. I don’t have any debt at all. I’m a saver, not a spender.
What freakish formula do they use to calculate EFC, and why is it returning a number that IMO is so radically unrealistic? This is a problem.
I do agree that if you do everything right - pay off your house, save your money, you are punished in American society. I was listening to Elizabeth Warren on the radio the other day, and all should could talk about was the “poor people who had to declare bankruptcy” and how dare student loans not be cleared by bankruptcy and how dare the government make it harder to declare bankruptcy? Same thing with the foreclosure and sub-prime lending crisis - whose fault is it that people made stupid decisions - and then we, the ones who pay off our debt are punished? Every day we are bombarded by commercials about paying the IRS a dime on the dollar what you the delinquent taxpayer owe
I know that my FAFSA and CSS Profile, let alone the NPCs, gave different EFC numbers. And it was an influence on us that the NPC for my son’s fall college destination was generous with merit aid, and we did know that other schools were not as generous.
Something seems odd though - your EFC is twice mine, so unless your home equity is like 4x as much as mine, or maybe the schools do not have a limit on how much home equity is counted, or unless you have savings stashed away, it does seem quite high. Our take-home is more than yours, but we do have a few other kids in the mix.
I don’t know anyone who has an EFC, of any amount, who was paying that amount every year for a vacation and just will “have to go away locally” instead…
And are you talking about your FAFSA EFC . . . or your expected family contribution at a particular college? If the latter, and if the college uses the CSS Profile to calculate your ability to pay, that paid-off house could be what’s skewing the numbers. Home equity isn’t considered for your FAFSA EFC, but it will be taken into account by most colleges that use the CSS Profile.
Looking at this more, I am sure the schools you are considering use the FAFSA and also the CSS/Profile? In cases with the Profile, you likely aren’t going to get calculations from the schools as to how they determine what you have available. I only linked the FAFSA EFC guide, which just determines federal eligiblity (Pell Grant, Direct loans, etc.).
Home equity is usually capped at a %age of your income.
Equity in your primary residence Isnt even mentioned on the FAFSA…which is what generated an EFC. If your FAFSA EFC is $70,000, either you have huge assets, or you made a mistake.
Do you have your retirement monies in IRA and TSA accounts? If so, the balances on those accounts are not included as assets on the FAFSA. Did you include those as assets?
Did you list your primary residence as real estate on the FAFSA? If so...that doesn't belong there either.
Check your entries to make sure the decimal point is in the right place!
The value of your cars doesn't matter...at all.
Are you the custodial parent? Or not?
Some of those prestigious schools don't give merit aid...yoir kid's stats helped him get accepted.
Did this student apply to any schools with guaranteed merit aid for his excellent stats? Of not, why not?
What is the value of the trust? If in your son's name, the value of that would be assessed at 20% of its value.
You mention your income...what about the other parent? That likely counts to as most of these prestigious schools get financials from BOTH parents.
There is no college with a COA attendance of $70,000 a year…so where is that number coming from?
The time for math was before you all finalized your application list, not after applications, are you not a custodial parent? You didn’t participate in that part of the process?
FAFSA EFC used to have a 99k cap, now I think it may not have any
If your EFC is correct, then the student should target colleges that award merit aid. There are threads for automatic merit, competitive merit and low cost colleges collected in the threads pinned to the top of this forum.
We are careful with our money too and the EFC is a shocker here too.
I discovered I had entered a wrong amount for our retirement accts (basically doubled it) for the CSS. I have emailed son’s schools but still waiting to hear back results.
Good news anyways though, many schools will pay for kids with stats like your child. If you ran done npc’s before hand you must have had an idea of the efc.
I am guessing it is your child’s assets that are hiking up the efc.
I will double check the numbers on the FAFSA and the PROFILE. The schools I’m concerned about certainly use the PROFILE, so maybe my paid-off house is hurting me here? Dang.
Special thanks to thumper1 for detailed questions. I will check all the suggestions! I am the custodial parent. Useless soon-to-be-ex has no income (don’t get me started). Fortunately kid applied to state land grant university as a financial Plan B, where he for sure gets some merit money. True, no college has COA of $70,000 but that’s what my EFA is? I don’t get it either.
We knew that acceptance at top colleges was not a problem, but paying for it would be. So far he has been accepted at half the top colleges he applied to & waitlisted at most others. Only one outright rejection. But so far we are batting 0.000 at paying for it.
Your FAFSA EFC really has no bearing on your financial aid award at Profile schools. And really, the equity in your primary residence is not counted on the FAFSA at all. So a $70,000 FAFSA EFC is due to some other issue or combination of them as I noted on my above post.
You won’t be paying $70,000 for your kid to attend college…most schools don’t cost that much.
But you do need to figure out what is driving your FAFSA EFC to that amount. It is not your primary home equity…unless you entered it mistakenly on the FAFSA.
I don’t think it’s clear yet if the EFC that OP is aghast over is the FAFSA EFC or an EFC as determined by a Profile school. Knowing which would help us figure out what’s going on. Given that FAFSA doesn’t look at primary home equity or retirement funds in qualified plans, and assuming the Trust really is “modest,” it certainly sounds like the EFC that raised OP’s eyebrows is from a school and not FAFSA. If that’s the case, given how many ways the different schools come up with an EFC, it may be hard to come to any definite conclusions. But I bet that home equity plays a part in it.
And yes your EFC can go over $100k. I saw it and laughed! I too think the only way your EFC could be that high is with a lot of assets barring the income.
But even with an EFC of $100,000, you will not be paying $100,000. College doesn’t cost that much for a year.
What the OP needs to figure out is how much he or she CAN contribute annually. Then add that to 1/4 of the trust fund money. Then add $5500 in Direct Loans. What is that total? That is the college budget.
The best time to do this is before applications are sent.
from what the parent wrote, the student did apply to some more affordable options.
If the current acceptances really are NOT going to work out, then perhaps consider a gap year. During that time, take NO college courses anywhere. Work or do something else worthwhile. Then for next year, craft a better list of colleges that include affordable and appealing options. There are likely some.
Here…read the links in this…lots of info about scholarships and lower price options.
Sorry - I think maybe the NPCs give an EFC for some of the schools, is that correct? I remember for example Cornell and Duke and an in-state school giving different EFCs, so they must have been from the NPCs.
I don’t know, “can” contribute annually for us is not near our EFC, yet we will be paying it by going into debt (manageable, not getting near our previous debt that was paid back).
I would say, if you look at the annual payment necessary in terms of 10 monthly installments, as we will pay, you can see if it is possible. 60K per year is 6K per month for 10 months, or an average of 5K per month over the whole year (but at most I think you can pay over 10 months).
If paying 5K extra per month (or taking out 5K per month out of the trust fund) is not possible, what per month is possible? 1K per month? 3K per month? Then I feel it is easier to multiply it back up.
What is the value of your son’s share of the trust fund for which he is a beneficiary?
Have you checked to make sure that you did not report your retirement accounts in the general investment question on the Profile? (And not at all on the FAFSA!)
The net price calculators give a net cost. To get a net cost of $70,000, the cost of the school would need to be that amount, and the student would need to get NO aid…at all.
Since every student completing a FAFSA gets a $5500 Direct Loan if they want it…I can’t see the net cost being $70,000 at all…anywhere.
I’m hoping the OP clarifies this. Is this $70,000 the FAFSA EFC? Where is this $70,000 EFC number coming from??
