I gotta admit that I am flummoxed by the FA process. Now we do okay financially, but live modestly as we are fully funding 401K and are both in our 50’s with few deductions to reduce tax liability. My hubby (pilot) will be forced to retire in 2022. We still have a 13 year old at home. After taxes, FICA, 401K, there is not that much left-about that EFC amount. Are we supposed to eat and pay our mortgage for the next 4 years?
Print out the formula, and work through it on paper. Maybe there was a mistake: https://studentaid.ed.gov/sa/sites/default/files/2016-17-efc-formula.pdf
If the numbers don’t agree with what you got from the FAFSA website, then log in and go through it carefully line-by-line.
Your pre-tax retirement account contributions are added back in to your income. If both you and your husband are funding those at the maximum rate, then that would be a sizable chunk of change. One option would be for you to cut back on contributions to one or both of the 401ks for the college years. Another would be to determine what you can afford out-of-pocket, and let your kid know that that is the budget.
The first year we had two in college, we paid 42% of income for college costs out of pocket. We did not put any money into retirement during the six years my daughters were in college.
While my D was in college ( this was over a decade ago), we paid one third our take-home toward college, and put away one-third into college savings for the next one, and lived on one third. Admittedly take-home, but still.
(Since then, our income has halved, so luckily we got used to leaving on less.)
Yes, unless you’ve saved money ear-marked for college it is about 1/3 of your income. It’s doable in the middle class and upper middle class but you absolutely have to tighten up the spending or devote one person’s salary to college and the other to living expenses. We timed our mortgage to be paid off when the first went off to college so used the money we were familiar with paying each month to the bank…to the colleges. But without planning, ouch, it can definitely hurt.
Yes, that first look at the EFC can be shocking. You make peace with it any number of ways. First, you tell/ask yourself, “Well, if not the family, who the heck should pay for my child’s college?” And you start looking at your budget. Second, if your efc is unaffordable even with lean living, you come up with a number you’re comfortable with. That’s your student’s budget. Third, you go shopping. You look for schools with merit (if you really want to go private), you look at your in-state publics both directional and flagship, and you look at 2years at community college and then 2 years at the state school.
I don’t think there’s a real expectation that most families can pay their EFC out of current income. In most cases it’s too high for that. The thinking is that you’ll have saved for college in prior years, and that you can borrow some and repay in future years. I think many are shocked by how unaffordable their EFC is.
I do think people get ‘shocked.’ In some cases the family has been living with meager savings on one salary and the other spouse stepping up and working can bridge the gap. If the family has been living with meager savings with both working then it’s good practice for retirement to have to cut back and down on the cost of living for four years or more depending on how many kids. And it feels so good when you get done, although I won’t “know” that feeling for 2 more years, but have been living the constrained lifestyle for 8 now 
You’re admittedly not poor, so pick a school you can afford. It really is that simple.
Sounds right to me…the guestimate EFC is about 1/4 to 1/3 of your gross income. Remember…assets get countd too.
What’s stopping you from earning, too?
I feel your pain. Yep, over about $100k in income, with average assets and expenses, the EFC is about 1/3, and if you have two in school the costs double but that EFC total stays about the same. If you don’t get need based aid anyway, it really doesn’t matter what your EFC is.
I do not recommend stopping contributions to 401k. Mine were matched at 10% so stopping contributions would have cost me way too much for no improvement in EFC (it is the same income if in your paycheck or in the 401k, and the 401k is a better tax choice). Yes, I get that you may need more cash flow, but giving up 6-10% match and the tax benefits for 401k contributions is a high price forcash flow.
I really think the best thing is to try to reduce the cost through picking a cheaper school, getting merit money, and working more (parent working more, child working, or both). Even a ‘meets need’ school can be out of reach if they expect you to pay $30k
I am employed. In the oil bidness. So
Concerned about job stability, too. Just don’t feel like the Rockefeller that this appears to assume. Especially sitting in my 2006 minivan in front of my modest home.
“Concerned about job stability, too.”
All the more reason to get real with your kid(s) about the college budget. Our EFC was out of line with what we could pay. Happykid knew her options were the community college followed by an in-state public or a place where there was aid that brought it down to the equivalent of two years at CC and two years at state U. She didn’t see any point in trying to chase down that much aid, and so followed our plan. She loved both of her schools and has no regrets.
I do love the fact that people on this thread think that an income of $100K and equivalent investments are “modest”. The vast majority of Americans make far less. There also seems to be an assumption that a student is “entitled” to go to a more expensive university and that if you cannot finance this from your income and investments, then you are “entitled” to financial aid from the university or government. None of these assumptions are true.
The reality is that the vast majority of students attend their local, publicly supported university. Most are very affordable. I’m also not saying that more financial aid shouldn’t be available. But that is another discussion. At the moment, most Americans seems disinclined to support major increases in federal student aid.
It is kind of like tax rate, the more you make the higher percentage of income is EFC. I wish I can pay a higher tax rate. 
You’re “fully funding” your 401k. All of your annual contributions get added back in as income. Since you’re in your 50s, you may be playing “catch up” and contributing more (as allowed).
Since it sounds like your student is already a senior, unless he/she takes a gap year and applies to affordable schools, you may have to figure out how to pay for this school.
What are your child’s stats, major and career goal?
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My daughter chose a major (BME - PreMed) and then put together a list of good schools. Harvard, Hopkins, Penn, Tufts, etc. However, she is a white female from the Houston suburbs (though a small public high school where she is a minority) where there are some extremely competitive high schools. #6 in her class even though she has been an officer in Band AND Dance Team (two huge time sinks), other ECs, started a Medical Club, wrote some heartfelt essays …and nothing. She has been accepted to Texas A&M and Minnesota and WL to Case. She still wants Case, and is less than excited about the others so far. I would have suggest she visit and apply to ‘lesser desirable’ schools if I knew that she had NO chance. Not sure what she is going to do. She was hoping to have more choices.
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It appears that your DD applied to several CSS Profile schools so her FAFSA EFC doesn’t really matter, except at maybe TAMU. UMinn is an OOS public, so it won’t likely meet need unless she qualifies for merit.
Case is her first choice?? has she visited? Case is in a dreary city.
What are her stats?
Is your DD a NMF?
Let me be frank…someone who is premed (and seriously wants to go to med school), should rethink BioMedE as a major. The likelyhood that she’ll end up with a med school worthy GPA is lowish. Med schools will NOT give an eng’g major a pass for having a lower GPA in a “harder major”.
I know that some premeds choose BioMedE as a major because they think it sounds appealing to med schools. It won’t. Med schools don’t give a rats patootie what someone majors in. Frankly, we’re not sure they even notice the major…lol. It’s almost strictly a numbers game.
Ooh, nasty burn on Cleveland mom2. It’s not much different than many northeastern cities. My kids think going to school in the south would have been terrible. (Cleveland native, Case grad, current Pittsburgh resident. Despite what people who live here like to think, Pittsburgh and Cleveland are extremely similar.) I know several ChemE grads who went to medical school after Case, and a nephew who went to med school after getting a BME degree from Penn.
Is your kid truly serious about med school? Then she needs to choose the cheapest place (to save money for med school later) that she thinks she can get the best grades at (to increase the chance of med school admission). TAMU in-state probably is her cheapest, so she should go there.
It is time to remind her to keep her eyes on that long-term goal.