I’m applying to schools this fall, and I ran several net price calculators to estimate my costs for college.
My family has low income (~20k) but very high savings.
I used College Confidential’s EFC calculator, and my EFC was estimated at around 67K (basically, my family would have to pay completely out of pocket, which isn’t possible). On the other hand, several NPCs (MIT, BU, etc.) offered me anywhere from 20-30k in financial aid with the exact same information entered.
If my EFC is that high, can I rule out any type of financial aid? Or are some of these NPC results accurate? It should also be noted that my family doesn’t own any businesses or other assets besides a home, and my parents are married and not self-employed - The only factor driving up my EFC is the savings. Any help would be appreciated 
Generally, the NPC’s from the colleges have a reputation for being fairly accurate. However, your family may be an outlier since the household income is low…and “very high savings” is a relative term. Does very high mean $100k or $1M?
If I were in your shoes, I’d probably do this:
[ul][]Complete the FAFSA. That will calculate your official EFC (https://fafsa.ed.gov/)
[]Complete and save the NPC results from each college on my list.
[li]Call the financial services office for each college and explain your low income / high savings situation, and ask if they expect the NPC to be accurate.[/li][/ul]
Good luck!
So…your income is about $20,000 a year…but your EFC is $67,000?
You would need to have a LOT…a LOT of savings to have an EFC of that amount. Like…a million dollars. Is that what you have in savings?
If your family income is really $20k, it is likely you’d qualify for an automatic $0 EFC and the assets would never be considered, your (student’s) income and assets wouldn’t be considered. That only helps you for an FAFSA only school, not one that also requires a CSS/Profile filing.
Are you sure you are filling out the FAFSA form correctly, even if it is only the sample one?
Do you get a means tested benefit like free or reduced lunch! Or SNAP? Is one of your parents a dislocated worker?
Can they file a 1040A or 1040EZ tax form for 2016?
If so, for FAFSA purposes your savings would not be counted…but for the profile, it would be.
Is this $20,000 a year income a recent income reduction?
Does your family has a business?
This is a big disconnect. Savings is an asset. If your family has “very high savings,” then there definitely are “other assets.”
Something doesn’t sound right about your financial information. Are you sure the numbers are correct and that your parents don’t own any property or assets (rentals, investments, etc.)? Have your parents always earned just $20k/year? They never owned a business or other assets? It seems unlikely that they’d qualify for a mortgage on that income. It’s equally unlikely that they could accumulate substantial savings while paying a mortgage and raising children on a $20k/year income. However, if the information you entered in the NPCs is correct, you won’t qualify for need based aid.
You said the College Confidential EFC was $67k, but that the MIT/BU NPCs gave you ~$20k of financial aid. MIT’s cost of attendance is $67k, so your net cost there is ~$47k. BU’s COA is $70k, so your cost is ~$50k. Make sure you’re comparing apples to apples. You need to focus on the net cost of each school, not the amount of aid each offers.
Your other thread indicates that you have a 1560 SAT and a 98 GPA. Look for colleges that will offer guaranteed merit for your stats. How much can your parents contribute? If they can’t contribute anything you’re probably going to have to keep travel costs to a minimum. Do any schools in your state (or nearby states) offer guaranteed merit aid?
How can your family have savings on a 20K income? 20K is barely enough to subside on. Did your family fall on hard times recently and lose its assets/source of income?
OP, you have lots to learn about FA and the thinking behind it.
How long have your parents been earning so little? Is this some work slowdown and they’re living off assets? Or did they inherit a high worth home? (If so, how do they pay taxes and insurance?)
Or did you make a mistake on the NPC? Go back and be sure you didn’t mistakenly count excludable, legit qualified retirement plans. Or put other info in the wrong categories. Or add a zero somewhere.
And the colleges offering no aid may have none to give, in the first place. You need to offer more info here.
Is this 20k earned income, or is it interest income from the large invested assests?
Ia the large asset land (like a farm)? That can indeed mess up the calculations.
@happymomof1 the op wrote:
She says no other assets…just “savings”. And it would need to be over a million in savings to generate a $67,000 EFC on a $20,000 income.
To the OP…do your parents work to earn this income…or is it investment or retirement income? Please explain.
And agreed, check the info you have entered on the net price calculators. Make sure you didn’t include parent assets under student assets. Ditto income. Make sure you didn’t add an extra 0 someplace…making $10,000 something like $100,000. Check and double check.
Your story as you tell it doesn’t make sense.
And…if your SAT is 1560, and your unweighted GPA is 98, perhaps you should be applying to colleges where you will get very significant merit aid…like potential for a free ride.
Your assets won’t matter for merit aid.
@ucbalumnus any suggestions?
It could be the opposite, that the family had a high income, saved it, and then retired and live off the savings.
Yes…it’s possible,that this $20,000 in income is interest earnings from the huge savings.
But really…they own a home too. That isn’t free. Even if it’s only insurance and property taxes…they have home expenses.
But if this is a recent reduction in income…than maybe they paid the house off too.
Who knows? The OP posted…and hasn’t been back…
I know a family that parents worked at a restaurant as waiter and waitress. They had minimal salary income while all the tips in cash were not reported as income on tax return. They actually made a lot of money from the tips and bought several apartments over the years. So it is possible to have small income on the tax form but with huge saving. I am not saying this is legal or this is the case for OP though.
It’s not only illegal, it’s tax fraud, and dishonest. Let’s hope the OP family isn’t doing THAT.
How do people with poverty earnings have a lot of savings and a home? What type of work do they do?
Where did the savings come from? Is it in stock or just in a savings acct?
The schools that you’re looking at will use css profile so they will expect your parents to pay some/all of your expenses.
How much will your parents pay each year towards college
Some older workers don’t make much but have high assets. My brother will be 67 when his kids go to college and I think his income will go down a lot. He owns a house, has some assets but his income has never been that high. Living low his whole life.
You are a HS junior. You need to discuss college finances with your parents…now.
If you are being honest here…you have excellent stats, and the potential for merit aid.
If your parent income is REALLY under $20,000 a year…or even under $49,999 a year…do you also qualify for a means tested benefit? Is one parent a dislocated worked? Can your parents file a 1040A or 1040EZ form?
It would be very helpful if you answered these questions. Otherwise, no one on this forum can offer you realistic advice.