I believe my EFC to be a bit high – a little over $55K for a family of six with one parent employed and making a little more than $85K a year.
I have seen that the EFC should be around 25-30% of income, and this amount is definitely not manageable for my family, leading me to believe I made a mistake filing the FAFSA. However, I can’t find any obvious errors.
I was wondering if maybe I should refile without using the IRS retrieval tool, or maybe there’s another common error I should look for. Any help is much appreciated!
Review the SAR and see that the numbers from the IRS are correct and that they fall into the parents’ income categories and not the student’s. Then confirm the savings and asset numbers - first that there isn’t a mistake and second that they show up as belonging to the parents and not the student. I agree that there seems to be a mistake, but it shouldn’t be difficult to find.
@jmk518 there is a caveat this year though, in that you cannot see the numbers transferred from the IRS with the DRT anymore.
But since you still have to manually enter earned income for parent 1 and 2 after doing DRT, the income should hopefully be correct.
Check the 2016 tax return and look at the numbers. What was earned wages, was there other income like interest/dividends/capital gains, were there retirement distributions, or rental income, what was the AGI, was it around $85,000 as well?
You can use the EFC calculator on the Collegeboard website (federal methodology), it’s updated for 2018/19 and I found it to be accurate for us. Run it with the numbers you used on the FAFSA and see what you get.
What was the asset number? Was it high?
I agree, check that you entered parent and student income and assets correctly and in the right place.
Also the FAFSA EFC is an index of your family’s financial strength.
It qualifies or disqualifies you for federal or state aid, and for some schools institutional aid, depending on the number.
But it is not the amount you have to pay per year for college.
You pay what the college charges for tuition, fees, room and board, minus any scholarships and grants.
So if a school costs $30,000 (instate public) and you get a merit scholarship of $5,000, you would pay $25,000.
So you need to find out what your parents can afford to pay per year. Add to that your student loan of $5,500 and summer work earnings of about $3,000. That is your budget.
Then you need to find schools that would fit that budget. Local schools you can commute to, schools that would give merit aid for your stats and maybe need based aid (run the net price calculator on college website).
Check NPCs of some non selective private LACs and Catholic colleges.
Keep in mind that your parents have 4 kids and need to plan for your younger siblings too.
@mommdc I did not realize that the IRS numbers would not be visible. I was not able to use that approach due to the system issue that affected some filers this year. Seems easier to just enter the numbers manually.
Given what you have stated, your EFC probably should not be that high. You need to look for mistakes in reporting items on the FAFSA.
Did your parents have an untaxed rollover on their tax return in that year? That could be the issue, which can be fixed.
Other thoughts: Look at the income from work to make sure it was entered correctly. Look at untaxed income. Look at student income. Look at assets. Any of these can cause the EFC to go up.
@billcsho yes, the college can still ask for transcript if using DRT. But I thought that using DRT made it less likely for college to ask for verification.
Profile schools like to see the whole 1040, so I imagine they still request the return/transcript.
Schools have to collect it if the parent or student makes ANY changes to the items brought over via the DRT (there is a flag that lets the school know if this is the case).
Income of ~$87K, AGI of ~$90K, assets of $23K in savings.
Ran the CollegeBoard EFC and got a little over $10K. Have ran various top schools’ NPCs in the past (Northwestern, Swarthmore, Boston College, Notre Dame, etc.) and have gotten under $17K net price for all of them.
I think the issue as @kelsmom suggested is untaxed rollover. Asked my dad and he said that there was ~$90K of untaxed rollover because his place of employment got taken over by another company and his retirement savings were moved or something. I don’t really understand it. This is probably the issue, because I’m not seeing anything else. How can this be fixed?
If you did an IRA rollover…did you account for,that on the FAFSA? There is a question on the fafsa that specifically asks about rollovers…and a little box you need to check.
If you didn’t do this…your rollover was included as income.
