<p>I'm new to filling out the FAFSA so I have a question for those of you with experience. I knew our EFC was going to be high. But it really shocked me - it actually came in quite a bit higher than any estimator I had been using. Our EFC is equal to 50% of our take home income for the year (after federal, state and social security taxes). How can that be possible? It doesn't seem to take into account state income taxes - if I'm wrong there please let me know. Oregon has very high state income taxes.... I'm just looking for some advice - perhaps I filled it out wrong - but I don't think so....</p>
<p>FAFSA calculates an allowance for State taxes based on the State you live in. It does not necessarily reflect the actual state taxes you pay, it is just an allowance. For Oregon the allowance is 8% of income up to $15k and 7% of total income over $15k.</p>
<p>Parent assets and student income/assets can also impact the EFC. </p>
<p>There are some allowances against income, then up to 47% of the remaining income can go to the EFC. </p>
<p>To arrive at available income any contributions to retirement accounts are first added back to the AGI. Then certain things are deducted from that: Actual Federal taxes, allowances for state tax (based on tables in the formula), FICA (based tables and on the reported income from work), an income protection allowance based on the number in the family. This gives the income that is considered available for the EFC. As much as 47% of that figure can go to the EFC (at a not very high income).</p>
<p>EFC is often shocking.</p>
<p>It does not assume that you’ll be paying out of current income. There is an assumption that college gets paid for out of past savings, current income, and future income (loans). </p>
<p>There are ways to “reduce” your EFC (not really reduce your EFC, but reduces how much YOU have to pay).</p>
<p>1)…go to a school that costs less than EFC</p>
<p>2)…go to a school where a big merit scholarship reduces COA to a cost that you can afford.</p>
<p>What is your EFC?</p>
<p>What schools is your child looking at?</p>
<p>Has your child already applied to some schools?</p>
<p>How much can you spend each year?</p>
<p>What are your child’s stats?</p>
<p>To the OP…it is very possible that your EFC is correct. Go back and be sure that every item was entered correctly on the FAFSA form. This is just a ballpark, but in OUR experience…the FAFSA EFC was between 1/4 and 1/3 of our GROSS income per year…ours was at the lower end as we do not have significant assets.</p>
<p>Your child’s GPA and standardized test scores have nothing to do with your EFC. EFC is for need based aid. Your child’s “stats” are used to determine merit aid awards, and admissions to schools. Your child’s “stats” might put them in the running for a scholarship someplace but this will also reduce your financial NEED by the amount of the scholarship. So…you would get less need based aid at most places. </p>
<p>The important question to answer is how much you feel you can contribute annually to your child’s college education. Remember that college is four years, so it is advisable to consider how you will be able to do this for the next four years, not just one year.</p>
<p>Schools cannot award you need based aid to fulfill payment of your EFC.</p>
<p>^^^</p>
<p>Right…</p>
<p>I wasn’t asking about the child’s stats because of EFC. I was asking about stats for merit aid purposes to help reduce costs to a level that the Waudio can afford. I was suggesting ways to effectively reduce the amount that a family has to pay. </p>
<p>When families have a very high EFC (such as equal or more than COA), then by getting merit or going to a cheaper school, you’ve reduced what you have to pay.</p>
<p>Waudio…we have a very high EFC because of rental properties. We would get no aid even with 2 kids in college at the same time. However, we pay very little in college expenses because both of our kids have big merit scholarships. That has effectively reduced our high EFC to a very low “family contribution.”</p>
<p>That said…to get good need-based aid at many schools, you do usually have to have good stats to get into those schools.</p>
<p>Another thought based on errors I’ve seen…check and make sure that parent income/assets are not entered in fields meant for student income/assets. It may help you to have these detailed instructions open when you’re checking it:</p>
<p><a href=“http://studentaid.ed.gov/students/attachments/siteresources/2011-12CTF.pdf[/url]”>http://studentaid.ed.gov/students/attachments/siteresources/2011-12CTF.pdf</a></p>
<p>Thank you all really for your help/advice. To answer a few of your questions. My daughter has the stats to get merit aid. In fact she already has some substantial offers including one full out of state tuition offer. The problem is the merit aid is not coming from her top choice schools. Her top choice schools are Northwestern and Stanford - don’t know if she got in yet she applied RD - but she has the stats to be in the running to get into either one. </p>
<p>The problem is our income is too high for for much need based aid - and too low for us to just say - hey we will pay for it for you. The economy has hit us hard - as it has for many. My husbands job is in sales. Our housing payment vs. our income is high right now. And I couldn’t get out of my house even if I wanted to - so I’m stuck. I have some money saved for college - but no nearly enough to finance schools like NU or Stanford. I planned my college financing/savings goals on the economy before it tanked. </p>
<p>I guess in the end barring a miracle DD isn’t going to be attending a dream school. Which is really sad because I know she would have thrived there. I know I’m not alone - I’ve been reading here for months. And I’m not complaining - I feel lucky we have what we have. I guess the other option is for DD to take out some big loans. This is going to be an extremely tough decision once we get all the final acceptances and financial info back…</p>
<p>What really perplexes me is why the estimator’s were so off. I checked Standford’s financial estimator again last night using the SAME numbers from the current FAFSA and the EFC came in 10K less - how is that possible???</p>
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<p>I don’t believe either school really gives MERIT aid. Their aid is need based only.</p>
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<p>The above quote is from Stanford.</p>
<p>The NU website actually lists the income thresholds for their “scholarships”. It looks like all of them have a need component.</p>
<p>If your daughter is looking for merit aid, she will not see it from Stanford or Northwestern.</p>
<p><a href=“http://ifap.ed.gov/efcformulaguide/attachments/111609EFCFormulaGuide20102011.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/111609EFCFormulaGuide20102011.pdf</a></p>
<p>here is the actual formula, run your own numbers and see that everything matches and is accurate</p>
<p>Therein lies my problem. The merit aid DD has received has come from other schools (all really good schools just not her top choices). I’m guessing that schools like NU and Stanford have demographics that are mainly low income or high income - not much from the middle class - due to the middle classes ability to pay the COA at these schools - no merit aid - and very little financial aid. And the poor economy had only made it worse.</p>
<p>Stanford has probably the most generous NEED BASED aid in the country, giving need based aid to families with much higher incomes than other schools. Students with very high family incomes with typical assets can still receive some of Stanford’s very generous merit aid. Families with incomes $100K or less pay 10% of their income to attend. This is extremely generous and is NOT for low income earners only. Let’s face it…families with incomes approaching 100K per year are NOT low income.</p>
<p>And Stanford guarantees to meet full need for all accepted students. You would have to have a very high income to NOT be eligible for at least SOME need based aid at Stanford.</p>
<p>NU also guarantees to meet full need. Their financial aid policies are not as generous as Stanford but they are still generous.</p>
<p>Waudio, I must be misinterpreting your posts. If your EFC or family contribution is in excess of the cost of attending these two schools, you will not receive need based financial aid from these schools (or probably any other as the COA of these school exceeds $50,000 a year). And neither Stanford nor NU offers merit aid.</p>
<p>If your EFC exceeds the cost of attending NU or Stanford, your annual income would be near $200,000 a year OR you would have significant assets. There would be no eligibility for need based aid.</p>
<p>Well, then we will hope for the best with Stanford. We aren’t low income. We know that and we are grateful for what we have. Our AGI dropped significantly over the last few years (over 30%) and we have done our best to make adjustments for that in expenses. But the fact is - our lower income significantly dropped our college savings/payment ability. I know we aren’t in this alone. There is a pocket of the population that is in the same place - not low income enough to get significant help - not high income enough to be able to pay full ride. I’ve had so many conversations with other parents that are in the same place as us. </p>
<p>I’m grateful that there are colleges out there that are still willing to give significant merit aid - and I’m grateful that I have such a great DD that has worked so hard and is eligible for it. </p>
<p>I did realize that I made a mistake on our AGI on both the CSS and the FAFSA. My correction will drop our AGI by 10K - now I just have to figure out how to make the corrections…</p>
<p>Easy to make the corrections on the FAFSA…just go to the site and amend the FAFSA to reflect the corrected amount. Resubmit. BUT you will still have to do this again once you have completed your taxes (to change your filing status to “taxes completed” and by putting in the numbers from your actual 2010 tax return).</p>
<p>For the Profile, you will need to call the school. This cannot be changed online. Ask the schools what you should do. They may tell you to wait until you have completed your taxes and then make the change only ONE time. Ask them.</p>