Efc ?

Paying for College
1

<p>I appologize in advance, but I have a crazy question.</p>

<p>D#1 is currently applying to many schools. Initial FASA numbers suggest an EFC close to $38K. EFC Profile number looks better and is closer high 20s/30K.</p>

<p>How should I look at EFC? Assuming D#1 FA EFC is on the order of high $30s, how should we look at our EFC in the near future for D#2?</p>

<p>Does our family EFC top out at its current number, or do we have to anticipate it doubling when its time for D#2 (both will be in college). Do we need to look long term at trying to manage $60+/ year, or accept $30+ for a longer time period.</p>

2

<p>Your EFC is for the family. Usually when more than one kiddo is in college the EFC is divided amongst the group. For example if your EFC with one child is $40,000...the when you have two kids EACH will have an EFC of about $20,000. That is assuming your financial situation doesn't change. And remember...just because that is your EFC does not mean that the college will award you full aid for the balance up to the Cost of Attendance...that depends on the schools.</p>

3

<p>While thumper's explanation is essentially correct, the EFC for each individual kid can skew based on assets, savings in each kid's names.</p>

<p>There was a 2 year overlap with our s and d as concurrent undergrads. Because of d's very steady employment history throughout high school, she had amassed significant savings, while son's was minimal or non-existent.</p>

<p>EFC for d was on average $8k higher than son's during the overlap period. Net effect, d paid some of her own costs out of pocket, whereas s had more federal student loan amounts, thus higher payments upon graduation. </p>

<p>Both kids were at private colleges where the cost of attendance was very similar.</p>

4

<p>thumper1 - to continue the discussion, if one were to assume an EFC of $40k for child 1, and child #2 goes to college in 2 year, it appears the total EFC generally remain @ $40k. Thus, FA Aid assistance for Child 1 might double to offset the increased burden of the family for 2 tuitions. Is this generally accurate.<br>
My fear is accepting an EFC for Child 1, only to find out that 2 years down the road colleges now expect us to come up with an EFC of 2x.</p>

5

<p>"if one were to assume an EFC of $40k for child 1, and child #2 goes to college in 2 year, it appears the total EFC generally remain @ $40k. Thus, FA Aid assistance for Child 1 might double to offset the increased burden of the family for 2 tuitions. Is this generally accurate."</p>

<p>No-</p>

<p>While the combined EFC's for the two kids will probably remain near 40K (assuming similar parental financial situation, and as violadad said similar finances between the two kids), that doesn't at all mean that the FinAid package for Child #1 will double. The financial aid package could go up much more than double the initial package.</p>

<p>Here's why. With an initial (relatively high) EFC of 40K for kid #1, and only one in college, your "need" will be relatively low (say for a school with a Cost Of Attendance of 45K, your need will be only 5K). So a school that meets 100% of need (many don't) might offer a financial aid package (grants and loans) of 5K.</p>

<p>Now, with two in college, Kiddo #1's EFC might be around 20K (and ditto Kiddo#2, so you still end up with a combined family EFC of around 40K). BUT kiddo #1's need is now 45K minus 20K or 25K, a fivefold increase. So if the school meets 100% of need (again, many don't), they might offer a financial
aid package (grants and loans) of 25K, or 5 times the financial aid offered the previous year.</p>

<p>Conversely, in a situation where a family has a very low EFC and a relatively high need with child #1, say an EFC of 5K and need of 40K, when child #2 comes into the picture, the EFC for child #1 may drop to around 2.5K resulting in only a minor change in need, and a minor change in the aid package (obviously, the aid won't double to 80K a year). :) </p>

<p>"My fear is accepting an EFC for Child 1, only to find out that 2 years down the road colleges now expect us to come up with an EFC of 2x."</p>

<p>No-- two years down the road, other things being equal, your family EFC (the two kid's EFC added together) should be similar to the current EFC for the one child. The forumulas adjust for the number in college so that a family with 3 in college concurrently isn't assumed to be able to pay 3X what they would pay with just one in college.</p>

6

<p>I just read about this in a College Board publication about the economics of financial aid. Evidently, if the college uses Federal Methodology, ie FAFSA only - then the EFC is divided by the number of children in college. If the college uses Institutional Methodology instead (usually using the PROFILE), then if you have two in college, each student would be expected to provide 60% of the one child EFC, for three students they would be expected each to provide 45% of the one child EFC. </p>

<p>They explained that this was supposed to even the playing field a bit between those who have close spacing of children and those that have far apart spacing.</p>

<p>Here's the link: <a href="http://www.collegeboard.com/prod_downloads/highered/fa/Economics-Primer-2004.pdf%5B/url%5D"&gt;http://www.collegeboard.com/prod_downloads/highered/fa/Economics-Primer-2004.pdf&lt;/a&gt;&lt;/p>

<p>Hope that helps --</p>

7

<p>It's the parental "contribution" of the EFC that gets halved (or multiplied by .60 in the case of Profile). Since the EFC is the sum of the parental contribution and the student contribution, not all families will see the EFC halved (or reduced by 40% in the case of Profile) when they have an additional child starting college. If a child makes significant income (over around $3500), or has any reportable assets, that portion of the EFC doesn't get reduced.</p>