<p>When we all go through this amazingly frustrating FAFSA proccess to have it provide each family's Expected Family Contribution. What does each school do with that number? For example, our EFC was $21,000. A little high but it is what it is. Does a university whose sticker price is $44,000 per year provide govt grants to bring that down to our EFC of $21,000 and then finds loans, work or merit to bring that down further? Or do the loans, scholarships, and work study bring the cost down to the EFC? After their 'Conditional' fin-aid package, BC was down to $26,200, and that included $2600 in loans & $2200 in work study. What have your EFC experiences been, past and present?</p>
<p>If you peruse some of the posts on this forum you'll see some detailed breakdowns. Sybbie has posted them a number of times. It really depends on the school where you have applied. There are not that many schools that cover 100% of need. And many of those require the Profile which usually whittles that EFC down with its inclusion of home equity. BUt such schools that provide 100% of aid will put together a package with grants, scholarships, loand and workstudy. The problem is if you did not apply to such schools. Schools that do not provide 100% of aid gap. The give you what they can, and then you just have to come up with the rest if you want to go there.</p>
<p>I would be interested in this too</p>
<p>They usually include grants, loans, and work study as part of the financial aid package that brings it down to your EFC.</p>
<p>Okay, since Jami put me on the spot (i am ususally the one bowing at her feet waiting waiting for her to offer some more sage advice). Just posting what I've learned</p>
<p>The EFC calculators and colleges have more latitude based on the sizes or their endowments and often use their own institutional methodology in determining your EFC where the FAFSA, is pretty more straight forward and uses a federal methodology.</p>
<p>Also different schools calculate or don't factor different things in awarding financial aid and determining your EFC. Daughter got accepted to 7 schools last year, had 7 different EFCs and none was equal to the EFC on the FAFSA
Williams, Bryn Mawr and Tufts were approximately 2,000 to 3,000 LOWER than the FAFSA EFC</p>
<p>Barnard, Amherst, Dartmouth, Mount Holyoke were HIGHER than the FAFSA EFC
(we did end up asking for a financial review at Dartmouth as it was Daughter's first choice and in the end they ended up meeting the aid package including EFC that Williams (her second choice) offered.</p>
<p>The upside to the profile is that they do take into consideration your age and protect a percentage of your salary (looking toward retirement).</p>
<p>**Remember that there is really no such thing as a free ride . **All scholarship monies over the cost of tuition and books are taxable income to the student. So the free money that you are looking for over the cost of attendance is probably not going to be free.
peviously posted on the parent's thread (OK you Financial Aid Pros- I'm a little confused)</p>
<p>So depending on how large your windfall is the student may have to pay taxes on it, then they have to work to pay off the taxes, the money from the job then reduces the EFC the next year... it's enough to make your head spin.</p>
<p>There are a lot of variables to be considered in the financial aid process so there are really no straightforward answers.</p>
<p>When looking at schools, you need to know the following about their financial aid policies;</p>
<p>Does your school meet 100% of your demonstrated need
What is the average financial aid package
What is the average amount of grant/scholarship aid
How much debt do undergraduates of this school carry
Does the school offer merit scholarships (I see you have been accepted to CMU, congratulations. are you eligible for merit $$)
Is the merit money based on maintaining a minimum GPA requirement</p>
<p>You will file the FAFSA :</p>
<p>FAFSA is the government form you need to complete before you can get any government aid. It gives you a data check--are you a criminal, do you owe the government money, have you registered for the draft, have you already gotten an undergrad degree, are you eligible for government money. It gives you your Expected Family Contribution, the EFC which tells you, the schools and any other aid agency what your family is expected to pay, given their financial circumstances. What individual schools do with that number is their own business. If your numbers jive, you can then get government loans, grants, workstudy which though dispensed through the college, comes from the government. What you still need is up to the college and you to provide. FAFSA generates that first EFC number as a stepping stone for a financial aid package. (thank Jamimon for this piece if information)</p>
<p>Some schools may ask for the CSS profile other institutional forms to determine your financial need</p>
<p>Your EFC will be based on your parents income (no matter how underpaid you think they are)</p>
<p>Your EFC takes into consideration , other siblings you have in college, private school tuition, assets etc. </p>
<p>There will also be a student contibution based on your income (working 30 hours per week)</p>
<h2>For example if you have a $10,000 EFC, based in where you attend your financial aid could look like any of the following 3 scenarios</h2>
<p>SCENARIO 1</p>
<p>Your financial aid will be calculated as follows </p>
<p>A school which meet 100% of your demonstrated need (and gives generous scholarship/grant aid, usually the ivies and elite LAC's) would calcualte need as follows:</p>
<p>Cost of attendance (for the sake of this demonstration we will assume that the cost of attendance at your school is $30,000 per year)</p>
<p>Minus</p>
<p>EFC (which comes from the FAFSA)+ Sudent Contribrution (the amount of money you will contribute from your savings or summer earnings)</p>
<p>Equals</p>
<p>Demonstrated need</p>
<p>Using the concept of meet ing 100% of demonstrated need a sample financial aid package would be calculated as follows:</p>
<p>Cost of attendance (tuition, room, board, books, travel home, misc) 30,000</p>
<p>Expected Family Contribution (based on the FAFSA) 10000
Student contribution 2000</p>
<p>Demonstrated Need 18,000</p>
<p>Your demonstrated need maybe be broken down as follows:</p>
<p>Subsidized Stafford Student loan 2500
Work study 2000
Perkins loan 2500
School grant/scholarship 11000</p>
<h2>Total aid package $18,000</h2>
<p>SCENARIO 2</p>
<p>If you were to attend a school that DOES NOT MEET 100% of your DEMONSTRATED NEED (or GAPS) NYU is a prime example:</p>
<p>NYU does not meed 100% of demonstrated need, a student with the same finanicals may get a package as follows:</p>
<p>Cost of attendance (tuition, room, board, books, travel home, misc) 30,000</p>
<p>Expected Family Contribution 10000
Student contribution 2000</p>
<p>Financial need 18,000</p>
<p>NYU broken your aid package down as follows:</p>
<p>Student loan 100
Work study 4000
School loan 9000</p>
<p>Total aid Package 14000</p>
<h2>NYU has left $4,000 of the $30,000 cost that you still need to attend NYU for one year still unaccounted for (gapping). You will have to come up with a way to get the rest of this money (outside scholarships, your parents taking out loans -if eligible).</h2>
<p>SCENARIO 3</p>
<p>School which meet 100% of your demonstrated need (and givesscholarship/grant aid along with loans) would calcualte need as follows:</p>
<p>Cost of attendance (for the sake of this demonstration we will assume that the cost of attendance at your school is $30,000 per year)</p>
<p>Minus</p>
<p>EFC (which comes from the FAFSA)+ Sudent Contribrution (the amount of money you will contribute from your savings or summer earnings)</p>
<p>Equals</p>
<p>Demonstrated need</p>
<p>Using the concept of meet ing 100% of demonstrated need a sample financial aid package would be calculated as follows:</p>
<p>Cost of attendance (tuition, room, board, books, travel home, misc) 42,000</p>
<p>Expected Family Contribution (based on the FAFSA) 10000
Student contribution 2000</p>
<p>Demonstrated Need 18,000</p>
<p>Your demonstrated need maybe be broken down as follows:</p>
<p>Subsidized Stafford Student loan 2500
Work study $2000
Perkins loan $2500
School grant/scholarship $7,000
unsubsidized Loan $4,000</p>
<p>Total aid package $18,000</p>
<p>from another posting:
The EFC means that based on your parents income and assets, your parents are able ot contribute $5915 toward your education. This number is a estimate because at some schools it may be more, at others, it may be less.</p>
<p>If you go to a school that meets 100% of your demonstrated need, it may be calculated out as follows..</p>
<p>Family Contribution</p>
<p>parents (EFC) 5915
Student Contribution 2000 (APPROX this would come from summer earnings)</p>
<p>total 7920 </p>
<p>You would then subract 7920 from the Cost of your attending college (tutition, room board, books, misc).</p>
<p>If you were to attend a school that is $40,000 per year , then your demonstrated need would be $32,080. </p>
<p>A school that meets 100% of your demonstrated need with not a lot of loans (most ivies and a few of the elite LAC's </p>
<p>May meet this 3280 as follows</p>
<p>Subsidized student loan $2650
Work study $2000
Grant/scholarship $27,430</p>
<p>My advice is to now look at the financial aid policies at the schools which you have applied. Find out how much the average grant aid is and the average amount of debt students graduate with. Also start seaching for outside scholarships because every little bit helps. Start now getting your resume together for your summer job or if you already have an after school job plan out a budget so that you can maximize your savings over the summer
Concerning the Pell Grant...</p>
<p>To receive a Pell Grant, a student must have financial need. The Expected Family Contribution (EFC) formula is the standard formula used in determining financial need for FSA programs. The formula produces an EFC number.</p>
<p>The lower the EFC, the greater the students financial need. Thus, the neediest students will have an EFC of 0 and may be eligible for the maximum Pell award of $4050 if their cost of attendance is high enough and if they will be attending full time for a full academic year. As the EFC increases, the students need is less and so the amount of the award decreases; after the maximum EFC of 3850, eligibility for Pell funds becomes $0.</p>
<p>hope this helps</p>
<p>"So depending on how large your windfall is the student may have to pay taxes on it, then they have to work to pay off the taxes, the money from the job then reduces the EFC the next year..."</p>
<p>Should it have been "the money from the job increases EFC the next year" or am I missing something here?</p>
<p>Sybbie, I have a number of your posts copied in a folder here. I've learned a lot from all of you, and am just glad to share my observations. </p>
<p>Jami</p>
<p>Sybbie,</p>
<p>I'm not sure I understand the part about paying taxes on the scholarship money over the cost of tuition and books. Does this include room and board? And why would the student end up getting more than the total cost to attend the school?</p>
<p>Yes, scholarships etc. for room and board AND anything else over tuition and books ARE taxable AND ARE REPORTED AS SUCH TO THE IRS.</p>
<p>We get a form every year from the college (a copy of the one that goes to the IRS) that says how much we got in scholarships and how much tuition costs.</p>
<p>Outside scholarships have sent the IRS a form (and us a copy) telling them how much we got in aid.</p>
<p>Yes, gandalf, </p>
<p>the money from the job increases EFC the next year" (my bad)</p>
<p>also keep in mind...</p>
<p>The schools expects studnets to be active participants in the financing of their education. There will be a gradual shift with the student taking on more of the burden of financing the education each year (not talking about merit aid/ scholarships in this scenario) The most basic part of this statement is if there are stafford loans in your financial aid package. the caps each year are:</p>
<p>Freshman year- $2625
Sophmore year- $3500
Jr/Sr year - $5500</p>
<p>So it is very easy that your "overall award" remains the same but your stafford loan will increase year over year. </p>
<p>In addition, each year, you will be expected to "earn a little" more because the student portion of the EFC will increase yeach year.</p>
<p>sybie and jamimom thanks a lot</p>
<p>Sybbie....</p>
<p>What do CSS Profile schools do with your home equity figure if you are house rich but income poor? Lets say your home is payed off (your parents are in their fifties) but their income is pretty low. Princeton eliminated loans for incomes under 40k for example but I don't know how they view equity. Some of us would not be able to afford the principal on equity loans. Do they calculate the award taking this into consideration?</p>
<p>It depends on the school. Some of the schools do give a home equity allowance. But in general, no. If you are house rich, why should you get more favoritism than someone who has their money in a bank and is living in a much less expensive home? I know folks who live in nicer homes than they can afford due to grandparents buying the place. Or that is where they sank an inheritance or a windfall instead of in the college fund. In a case like that, a family should consider moving down if they want to send the kid to an expensive college. It is surprising how many kids in my son's prep school live in modest homes. It is clear that those families are putting their money into their kids' educations, not in their houses. We lived in cheap housing for years for that very reason. Why should those who don't make that decision get less money than those who want nicer homes?</p>
<p>I am going to defer this section back to Jamimom, because I think she is more knowable about the home equity portion. I do know that the CSS parofile does look at the age of you parents and does "protect" a part of their income for retirement purposes. Many private college financial aid offices count equity in your home as an asset in determining your net worth. </p>
<p>At Williams, </p>
<p>The expected parental contribution is based on parents' income and assets (including home equity), family size, number of siblings enrolled in college, as well as other factors such as extended unemployment or unusual medical expenses. The student contribution is derived from expected summer earnings, savings and other assets. The parental contribution and the student contribution equal the family contribution.</p>
<p>In the worse case scenario, and some of the home equity is considered as part of your package, you can discuss this one on one with the financial aid office and show your documentation because in the end the school is going to put together your package.</p>
<p>Some schools might think that taking $$$ out of the bank would be less stressfull than asking one to sell their home. Relocating is not an option for everyone. Some families have to be close to older relatives for example. Or self employed with a business nearby.
Also the home can be very modest but payed off. I wasn't referring to an "expensive home" but rather a modest one. I do see the point that Jamimom makes but I think that every situation has different circumstances. I guess that is where individual judgements might be made in the admissions or fin-aid office.</p>
<p>Absolutely, Poison Ivy. But you know, I tutor kids whose families share apartments with other families in some pretty tough neighborhoods. Those folks will come up with that money to send a child to college. FAFSa and Profile do try to provide some sort of leveling for the various ways folks spend or save their money. It is not always fair, there are some terrible intrinsic faults in the methodology. But you can see the potential for abuse if you do not count home equity. A family could simply pay off their mortgage, and that way there are much few assets for college. Fafsa does not ask about home equity so those schools that go just by that form does give this break. But in general, the schools that have the most money to give want PRofile or their own forms and invariably the issue of home equity does come up.</p>
<p><a href="http://www.oakwoodgroup.com/28elite.html%5B/url%5D">http://www.oakwoodgroup.com/28elite.html</a></p>
<p>Can someone explain how this formula would work with someone with lets say $300k in equity and 30k income.</p>
<p>Nopoisonivy, you have not given enough info. Right now someone with $300k In home equity would have about 5.6% of it (I am excluding certain basic asset allowances so if that is the ONLY asset the family has, this would not be the case) counted towards the EFC which is about $16,800. Again there are exemption amounts for a number of schools. The new formula would calculate the home equity to be 2.4 Xincome ($30K) minus the mortgage on the house. So if there is no mortgage, the home equity would be $72,000 for purposes of assets and the amount 5.6 % would then be applied to that figure for just $4032. for a family making that amount in income. But bare in mind that many of those schools offer home equity and asset allowances already, so that it is not as though the full $300K in equity is likely to be assessed that full 5.6%.Still, for those with low incomes, it would be an advantage under the proposed changes.</p>