<p>EFC is exquisitely sensitive to income. It’s only sensitive to assets above a certain level, and your assets might exceed that level. So spending down might help you somewhat, but probably not to a huge extent. Home equity is a non-factor at FAFSA schools; it doesn’t even ask. Some PROFILE schools do take it into account.</p>
<p>BTW, our AGI is considerably lower than yours, and our EFC is also considerably lower. My D is getting generous need-based aid at her college. And guess what – it still hurts, alot. Unless you are a multi-millionaire, or your child gets a free ride or decides to live at home while going to the local state school, paying for college is painful for almost everyone. But you might keep in mind: higher income is better than lower income, even if it means less aid.</p>
<p>kmcmom13, I’m flabbergasted…full tuition on merit for an in-state student? Into a “small program?” I obviously should have moved to Michigan a long time ago!</p>
<p>I fully agree, if you’re earlier in the process than I am, the “$200K Home Tour” is a great idea. (We’d have to drive a fair distance to get to a $200K home, even “post bubble.”) </p>
<p>Thanks for the creative thinking. I love our safety school, by the way…completely sold on it. It’s No. 1 Son that hates it!</p>
<p>Just out of curiosity, I checked the cost of the University of Illinois - dumbparent’s financial “safety”. As given on UI’s web site, the COA for an instate student for the 2011-2012 year, depending on the program, is between $28,000 and $33,000.</p>
<p>*…paying for college is painful for almost everyone. But you might keep in mind: higher income is better than lower income, even if it means less aid. *</p>
<p>Agree completely, that’s what I was trying to say (While I’d agree that $48K EFC is an altogether more desirable situation than $0 EFC, there’s plenty of angst to go around for all of us.</p>
<p>The stuff at each step - some of it is autobiographical, some is gleaned from hanging around CC for a few years. I left out a few things at each step, maybe I should start a thread and let people contribute. </p>
<p>Sorry, this is just naive. The “cost of education” according to the college also includes the costs of indulging their own edifice complex - their desire for ever more impressive facilities, as they convert campuses into resorts in order to attract those who aren’t price sensitive (the very rich and the very subsidized). When prices increase at more than double inflation for four decades running, it’s not a matter of cost; it’s a matter of waste.</p>
<p>Folks like the OP are asked to carry the full burden - and to carry other people.</p>
<p>“When prices increase at more than double inflation for four decades running, it’s not a matter of cost; it’s a matter of waste.”</p>
<p>Sorry, this is just unrealistic. Don’t forget that inflation has been artificially low as manufacturing moved overseas during this time. Schools can’t outsource their activities to low-cost areas; their inflation is tied to wages and benefits, greatly influenced by health care costs. Schools must also remain attractive to their target students; it’s a matter of demise if they don’t stay up to date. “Waste” in order to remain viable?</p>
Many schools have “outsourced” a large percentage of teaching to non-tenured adjuncts barely making minimum wage. Most non-academic people have not seen 4-5-6 percent raises every year for the last 30 years, or corresponding increases in benefits. So why is college wage/benefit inflation so high?</p>
<p>Many school presidents now fancy themselves as “CEO”'s and are paying themselves accordingly, and expanding both the pay and number of people at the administration level as befits a CEO.</p>
<p>State schools are incredibly top-heavy with patronage hires as they have become plum assignments to pad their pensions.</p>
<p>Schools are forcing students to live in their dorms and eat on their meal plans for more than one year, at square foot rates for 100 year old buildings that are criminal, charging 10-12-15 dollars a meal for cafeteria food. Huge profit margins.</p>
<p>Schools are investing huge money in sports to enhance their “image”. (It’s possible this pays for itself in increased alumni donations, but maybe not.)</p>
<p>Rather than let rich alumni pay for their new buildings, schools are borrowing money.</p>
<p>There is huge waste and inefficiency in the college system, but there is zero incentive to wring it out because easy access to loans means everyone can go regardless of how high the price gets jacked up.</p>
<p>When the cost to rent an apartment for a student, buy food, hire a good tutor for a few hours a day and buy database access would come in under $58,000/year, one has to suspect there is something else going on here.</p>
<p>Leave the single biggest item out of the argument and it does start sounding like a conspiracy! :)</p>
<p>Then there are the kids trying get into better and better schools, and there’s no pressure on schools to improve? Remember supply and demand? Who is demanding the quality?</p>
<p>The majority of that EFC must be related to assets, not income… Just saying, as other posters blamed a 150k income for that 47k EFC and that’s not the case…</p>
<p>Income over a small allowance is “taxed” starting at 22% or so, and by the time your income gets over 80K or so you are “taxed” at an incremental rate of 47%. Yes, 47 cents of every dollar you make is added to your EFC.</p>
<p>Assets are never “taxed” at more than 5.6%.</p>
<p>So the vast majority of EFC for most people comes from income.</p>
<p>One wild card is house equity - it is not counted for FAFSA, but private schools that use the CSS Profile may count none, some, or all of it.</p>
<p>It’s interesting that some of the CC members who are quite well versed in finaid have stayed off this thread. At times, they have quoted that 30% or so of AGI is not an uncommon EFC.</p>
<p>But remember that EFC is specifically the term used by Fafsa, for fed loan qualification. Profile schools can count whatever portion of income and assets they please. Some cap the home equity figure at a multiple of income. Some don’t cap it at all. Some also count the value of your cars. Some look at your retirement assets to determine “family financial strength” or words to that effect (I believe that’s from the Profile itself.) Finaid.org even has a large section on how trust funds are (or may be) counted- even if the kid has no access to the funds. </p>
<p>There is a sentiment on CC that colleges exist to serve our kids. Many are disgruntled that their top-performing kids fall among the 80-90% rejected. Or, as in many threads, that finaid is inherently unfair to one category or another. </p>
<p>But, what if we families did not have an expectation of some sort of “fairness?” What if you viewed it differently- that colleges exist as entities on their own- they set their own policies regarding academics, facilities, activities, living arrangements, size of freshman class, criteria for admission, criteria for financial aid, etc? Would that allow us to be far more analytical in our kids’ college searches? </p>
<p>I guess that could cycle us back to the “transparency” issue. But, when something has a 50k-plus price tag, per year, shouldn’t we really get in a cold sweat when our kids announce it’s their “dream school?” Do parents get swept up in the same emotional tidal wave? Do we lose our rationality?</p>
<p>And, once we do, we treat the college subject as an entitlement- it’s all over some recent threads: my kid worked hard, why didn’t he get in? My finances will be strained; why didn’t I get the aid I want? This is not against OP; he’s learning. But, it’s sooo common on CC.</p>
Edifice complex – my favorite new phrase.
Thanks, MisterK, you made my day!
I’m originally from Canada, where comparatively low tuition means a comparative lack of “edifice complex” so the whole college process here was quite an eye opener for me. The one thing I noticed in our college visit was the ‘edifice complex’ and while I realize it is ‘free market driven’ I also felt it was a shame it rendered so many options out of reach for smart middle class kids ;)</p>
<p>At the same time, I will note that my son fell in love with Michigan, which also has an edifice complex of sorts due to its fab endowment despite being a public. He notably did not fall in love with UBC (where his tuition would have been $3500 a year…no I did not forget the zero – Cdn universities don’t care if you’re a permanent US resident; they give Canadian citizens Canadian tuition rates) or the pricier (eg. $7000 – because they’re not in BC) U Toronto or McGill (although if smart he will consider falling in love with one of the three for grad school )
So his own natural response suggests that the edifice complex indeed has an effect on 18-year-olds – which I suspect is why they do it!</p>
<p>And dumb parent, yes, it did feel like winning a lottery. The program is small because it is a portfolio-submission type of department that takes 12 kids a year and is highly competitive. It was a perfect storm of luck that seems to follow McSon around, for which I am eternally grateful I will send some of his mojo your way!</p>
<p>*Naturally, not knowing how college costs would grow exponentially we spaced our children so we could more easily afford to fund college. Of course, this was all wrong too! When i see all the money going to families with kids tightly spaced i know I should have tried for triplets *</p>
<p>LOL…</p>
<p>In reality, families that have multiples or tightly spaced kids really only get a discount if all of those kids happen to have top stats and get into the few “meet need” schools. </p>
<p>In reality, since most families do NOT have a whole bunch of high stats kids, those with children attending college at the same time are paying a WHOLE bunch more than any EFC suggests. Such families often HAVE to resort to starting at a CC or having kids commute to the local state school. </p>
<p>Keep in mind that most kids are going to publics…and 99.99% don’t meet need. Many/most only give fed aid and we all know how little that is. A family with an EFC of about $20k which then would split to about $7k if they had 3 in school at the same time would not get any “free aid” from most state schools. Such a family with triplets who have good but not top stats would likely be paying all costs to their state flagship with the exception of student loans.</p>
<p>Great input on the distribution of “talented” students, thank you. I’ve not seen this information anywhere else.</p>
<p>UIUC scores breakdown…</p>
<pre><code>* SAT math scores over 600 89%
SAT critical reading scores over 700 16%
*** SAT math scores over 700 58%**
ACT scores over 30 39%
</code></pre>
<p>With 58% of UIUC students scoring over 700 in the Math section of the SAT, your son will be surrounded by smart kids. Again, those who aren’t scoring that well will not likely be in your son’s classes. Those lower scoring kids will be in other classes/majors.</p>
<p>I don’t know what UIUC’s policy is on AP credits nor do I know what credits your son has. But, if UIUC does give such credit, and your son can benefit, then that alone puts him on the track with the smarter kids.</p>
<p>My kids were able to skip classes because of AP credits, so when they started their frosh years, they immediately went into higher math classes…that alone “weeded out” who would be in their classes. Dumb kids aren’t in Cal III or Dif Eq or other harder classes.</p>
<p>dumbparent, I wish I could ease your pain, but I cannot. Like you I have a top stats kid and like your family, we are “rich” Our S will be going to our state flagship in the honors program with almost a full ride in merit money. We know he will go to grad school so we now have 4 years warning to save every penny.</p>
Here’s how the formula works in a nutshell for parent’s income</p>
<p>Start with your AGI (line 37 on 1040), add back in your untaxed income
Subtract out an allowance based on family size and # of kids in college
Subtract out Federal income tax (line 55 on your 1040 I think)
Subtract out FICA tax (employee share only)
Subtract out an allowance for state tax. There’s a chart with a %age based on your state.</p>
<p>Of what’s left, you apply the following:</p>
<p>
So an example:
150000 in AGI + untaxed benefits like 401k
24970 in income protection (4 in family, 1 college student)
20000 federal tax
8794 in FICA
7500 in state tax (5% for my state)
= 88736</p>
<p>We are on this line of the table: “$29,301 or more $7,926 + 47% of AAI over $29,300”</p>
<p>Applying gives us (88736-29300)*.47 + 7926 = 35860</p>
<p>So the EFC just from the parent’s income is almost $36K.</p>
<p>And two things to note: every dollar less in taxes you pay adds 47 cents to your EFC (I just guess at $20K in income tax, chances are it will be less). Every extra dollar you make adds 47 cents to your EFC, it does not take much to get to the 47% bracket.</p>
</p>
Don’t forget that inflation has been artificially low as manufacturing moved overseas during this time. Schools can’t outsource their activities to low-cost areas; their inflation is tied to wages and benefits, greatly influenced by health care costs. Schools must also remain attractive to their target students; it’s a matter of demise if they don’t stay up to date. “Waste” in order to remain viable?</p>
)