<p>My parents make around 100,000 dollars per year. Their wages are 75,000 but they own part of a business and get a dividend, so the 100,000 is their gross income. </p>
<p>Does an EFC of 25K per year seem high? </p>
<p>Can I do anything about my parents wanting to use their money to invest in another business?
They plan on taking out loans for my education and using the cash they have in the bank (40,000) for a car(for me) and another business.
Will the college be willing to reduce the EFC if I tell them this?</p>
<p>My sister will also be going to college in 3 years.</p>
<p>That EFC actually sounds lowish for that income.</p>
<p>No, it doesn’t matter that your parents want to invest in the business. We’d all like to use our money for more investments, but schools aren’t going to give us more aid so that we can have that choice.</p>
<p>The EFC sounds about right. Colleges are pretty self serving, they believe your parent’s number one investment right now should be in your education.</p>
<p>The college will not reduce your family contribution because of a car or business purchase. The
EFC you noted sounds about right…maybe a tad low.</p>
<p>Awhile back, you asked about merit scholarships…did you apply to any schools that would give you large merit scholarships?</p>
<p>Spending savings on a car and another business isn’t going to change your EFC. If your parents only have about $40k in the bank, then that savings may have come under the threshold for married couples anyway (so it wouldn’t have counted.)</p>
<p>EFC is largely income driven. Your EFC is definitely income driven. It’s right for the income amount.</p>
<p>(besides why should a school give your family more money just because it prefers to buy more cars or more businesses???</p>
<p>Slip-Not much can be said to change fao’s minds. Unless you have some new extenuating circumstances, what they give you (in fin aid) is what you get. Believe me, we’d all like to get colleges to reduce efc!</p>
<p>If your schools are FAFSA only schools then the MINIMUM you should expect to pay is your FAFSA EFC. These schools do not guarantee to meet your full need. </p>
<p>I can’t think of anything in what you have posted here that a college would consider to reduce your family contribution. Typically this happens because of high unreimbursed medical expenses or the loss of you parent income.</p>
Maybe the parents are thinking that it makes sense for them to spend down the cash, and that given the options available to them, they prefer taking a PLUS loan to whatever is available to them as a business loan. </p>
<p>I do think they should familiarize themselves with the asset protection allowances for both FAFSA and Profile EFC calculation, so they don’t unnecessarily spend down assets. </p>
<p>FAFSA is based on cash on hand, so if money is spent to buy a car the week before the FAFSA is completed, then the money won’t be in the ban to be counted toward EFC. It’s self-destructive to spend down assets unnecessarily in effort to reduce EFC, given that only 5.6% at most of the assets are counted toward parental EFC – but if it an expense the family would be taking on anyway, it can make some sense. I can’t comment on the car thing, because a car can be a luxury or a necessity depending on individual family circumstances.</p>