EFC ... What??

<p>What an emotional roller coaster. DS was thrilled to be accepted into one of his top choice schools. We completed the FAFSA, CSS Profile, and every other form required of us. Our EFC came out to about $5,000. Well ... son reads the acceptance website and is so happy. I said "let me check the financial aid." We were awarded a $40,000 parent plus loan, small work study amount and the normal small Stafford loans. </p>

<p>Is that considered meeting financial need? If we were able to pay $46,000, we wouldn't have an EFC of $5,000. I'm really shocked. The school says that they meet 100% of financial need. I thought that would mean grants or scholarships ... not loans.</p>

<p>The school is probably a PROFILE school. To get such a huge difference in what they expect you to pay, it must include something big that FAFSA does not. Is there a non custodial parent in the picture? Do you have a lot of home equity? </p>

<p>The EFC is just screening for the federal monies when a school uses another calculator. Do you have any idea why your PROFILE numbers came out so differently?</p>

<p>Unfortunately a school can count loans as part of the “meeting need” package…</p>

<p>Almost $200 grand in loans over 4 years is unacceptable. If your EFC is $5000, you certainly cannot take on $200 grand in loans. Your son will probably need to attend elsewhere :(</p>

<p>Which school is this?</p>

<p>And, as Cpt asks…what different info did CSS provide that FAFSA didn’t? Home equity? Non custodial parent? </p>

<p>Some schools claim to meet need, but do so with Plus loans. It’s very misleading.</p>

<p>Unfortunately, this is what is considered financial aid. Parents/students please have financial safeties on your college lists.</p>

<p>Every year students are sorely disappointed because they cannot afford their dream schools. Meeting need does not necessarily mean that they will give you enough “free” money to cover the difference between your EFC and cost of attendance.</p>

<p>So sorry that you are disappointed but $200,000 of loans is not feasible for anyone.</p>

<p>No, no custodial parent. Unfortunately, no home equity either. We had to take out a second mortgage to help keep our business going. It’s a small business with 10 employees. We’ve been in business for a long time, but the downturn in the economy about killed us. With business being so bad, we couldn’t get a bank loan to help the company. Many of our customers went out of business. Anyway, we had to use the personal assets that we had (home equity, IRA) since banks weren’t loaning to small businesses - even ones they had dealt with for 20+ years. Right before the economy meltdown, older daughter had started college. We had all intentions of paying for her college each year and did not foresee what was about to happen. When all hell broke loose, we didn’t have the heart to make her leave her friends and school, so ended up with LARGE parent plus loan. And, of course, the housing marking died during all this too. Use to have home equity …. now couldn’t sell our house for what we owe.</p>

<p>So to condense this. I have a ton of debts. I am not a lazy person. I work all the time and more than likely, will never be able to retire. That’s okay; don’t think I’d like sitting around anyway and definitely wouldn’t have money to go on any trips. :frowning: Our little company provides incomes for eight families; we didn’t lay one of them off, but it seems we did ruin my son’s future. I am so sad. I wanted my son to get as good an education as my daughter did. I wouldn’t have wasted my time completing all those forms if I’d known all I was doing was applying for more debt. </p>

<p>“Why will no bank give me a loan because of all my debt, but this school is meeting my son’s financial need by offering me $184,000 more in debt?” I’m not a deadbeat. We did NOT spend on frivolous things. We’ve never before asked for help, but the forms implied that we were “more than eligible”, so we applied.</p>

<p>I have no clue why the discrepancy. We put on the Profile that we sold my IRA and used that money to pay off equipment loans. Even doing that, our adjusted gross income was SMALL. We sent personal and business taxes which substantiated everything. A CPA does our taxes, so I know they were done correctly. I don’t know if we need to call them and emphasize that nearly all the income we showed last year was from selling the IRA. I’m baffled.</p>

<p>Son has been accepted to other schools, but had his heart on this one. I just pray that they made a mistake.</p>

<p>Thing is, they are not “offering” you a Parent Plus loan. You still have to apply. I know <em>I</em> would never qualify for that many Parent Plus loans…</p>

<p>[Student</a> Aid on the Web](<a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/parentloans.jsp]Student”>http://studentaid.ed.gov/PORTALSWebApp/students/english/parentloans.jsp)</p>

<p>BlueBlood, I would ask if they are using PLUS to meet need or if they estimate your need to be less than you do. If, in fact, the sale of the IRA is driving up your income, it may be worth having your son defer his admission for next year. Of course, you’ll want to see the other packages too. He may get a better package from another school.</p>

<p>susgeek - Believe me, I don’t want another Parent Plus loan. (We consolidated all my daughters into one.) We shouldn’t have been approved each year for my daughter’s, but we were. She got a great education - and we will pay back every penny.</p>

<p>2collegewego - I will follow up with them. Something, somewhere is wrong. Our median household income has been well below the national average for the last two years. And yes, my son has safety schools. He was awarded a full, four year ride at a popular university. It’s not one that he would want to attend, but he may have to. Most of his schools have not sent information about aid yet. He’s a very smart kid and will have options. I just never thought meeting financial aid was primarily loans. I guess I should have read more on financial aid.</p>

<p>What school is this?</p>

<p>I’d rather not name the school until we get this clarified. Thanks for understanding.</p>

<p>Here is my gut feeling. The school valued your business expenses and business at a higher rate than you thought they would. Some colleges using the Profile add back in business expenses as income. They also assume a “value” of your business. You will need to discuss with the college what information they used to determine your family contribution. Once you know this, you can discuss with them whether or not those assets/income really exist…or not.</p>

<p>I agree with Thumper…this school has likely valued your business more than you do. You say that your business supports 8 families…that suggests that the business earns a decent amount. </p>

<p>* Right before the economy meltdown, older daughter had started college. We had all intentions of paying for her college each year and did not foresee what was about to happen. When all hell broke loose, we didn’t have the heart to make her leave her friends and school, so ended up with LARGE parent plus loan.*</p>

<p>Unfortunately, others have posted similar situations. They borrow a lot for the first child’s college education and that debt is still outstanding when the younger child(ren) go to college so the parents are limited to how much they can help the younger ones.</p>

<p>*I am so sad. I wanted my son to get as good an education as my daughter did. I wouldn’t have wasted my time completing all those forms if I’d known all I was doing was applying for more debt. </p>

<p>*</p>

<p>Hopefully, your son has some other acceptances that will give him a good education. Please don’t think that he can ONLY get a good education at a pricey school. If you feel that things won’t be fair, then make some deal with your son that you’ll help him buy a home or something when you’re all back on your feet.</p>

<p>thumper1 and mom2collegekids,</p>

<p>Thank you very much for your responses. I should have said, the business “helps” support 8 families. All families have a spouse working elsewhere. Our sales are half what they were at one time. Unfortunately leasing companies/banks don’t cut you a break because a piece of equipment isn’t running. Income has not been enough to cover expenses. Thus the loss carry overs, having to sell personal assets, etc.</p>

<p>Anyway, until we this speak with them, I guess we won’t know how they came up with what they did. Again, this is a “very small” company. I thought there was something about being under 100 employees?? I’m too tired to look now.</p>

<p>I will remain open minded and I know there is never “one school” where a child will be happy. I’m prepared to persuade and talk-up whichever school turns out to be the best for the money. </p>

<p>ANOTHER QUESTION: When a school publishes the “average indebtedness amount at graduation” … what does that cover? Is the Parent Plus loan not included in that figure? If the average indebtedness is only $22,000, does that mean that everybody that attends pays full price? That comes out to loans of only $5500 per year.</p>

<p>I’m wondering if that debt reported is STUDENT debt.My guess is that it is. That would be the only debt the college really could know about. Plus Loans are parent loans.</p>

<p>If the school is a Profile school, that “small business under 100 employees” thing doesn’t matter. That is for FAFSA. That very well be the difference you are seeing in your family contribution.</p>

<p>Those reported debt figures do not include parent debt.</p>

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<p>I understand. :)</p>

<p>It doesn’t make sense that it’s only student debt. The school saw our EFC on the FAFSA that they required. They awarded DS grants, staffords, work study and told us that we could make up the $40,000 difference with Parent Plus Loans. My daughter’s UG each year told us how much we could apply for in Parent Plus Loans. It was obvious to them that we didn’t have the money to pay.</p>

<p>The FAFSA said that the EFC was $5000 per year. </p>

<p>Are they now saying that the EFC is $40,000 per year? Do you add son’s Stafford Loans into EFC? I’m so confused.</p>

<p>That must be some expensive school is after workstudy- ($2,000?), grant( another $2,500 maybe?), & max out Stafford loans at $5,500 for freshman- say $10,000 altogether plus the FAFSA EFC of $5,000 but you still have $40,000 to meet the financial obligation of the school.
( & don’t forget loan disbursement charges :p)</p>

<p>I think it is better to know up front what the school is offering, because if my suspicions are accurate, the school may pull the grant for subsequent years.</p>

<p>NYU isn’t worth it.
;)</p>

<p>*Are they now saying that the EFC is $40,000 per year? *</p>

<p>No, EFC is EFC - the FAFSA result. It seems that they have either come to a different calculation of your need (by their own methodology), or they’re considering the loans as a fulfillment of your need. Or most likely, a mix of the two.</p>