Hello CC,
Has anybody else had this issue? The FAFSA estimate is $9K different from the actual EFC (actual is higher)
When I used the estimating tools for FAFSA 2016/2017 school year the EFC was about $27K. This seemed reasonable.
When I actually completed the FAFSA form the EFC was $36K. When I see examples in Princeton review, etc. it seems the EFC should be closer to the $27K. I’m concerned I may have filled out the form incorrectly.
This was based on the following:
2015 Gross Parent Income of $134K (this isn’t adjusted gross, this is everything we make before taxes)
Parent Non-retirement assets: $96K
Student income: zero
Student assets: $500
All income from W2’s… no investment income. Two working parents, the oldest of whom is 59.
This may seem like a good income in some states, but we are in San Francisco Bay Area, so its not a lot.
I think the key here is the percentage of parent income that is assumed to be contributed. Nowhere can I find an exact percentage. I’m guessing its sliding scale, but it would be helpful to know the % at different cut-offs, then maybe I could figure out what is going on.
Any idea what the underlying calculations should be? Thank you in advance!
Mine was off by a couple thousands even I don’t have a complicated situation. It is the amount of deductible they added back to the AGI that made the difference in my case.
As a gross estimate…at your parent income level, the EFC would be around 1/4 to 1/3 of their gross income. So…at 25% this would be $33,000 or so. The $90,000 in assets would add bout $5000 in addition. So…that $36,000 number sounds like it could be right to me.
When you say the FAFSA estimating tool…what do,you mean? Do you mean the school net price calculator? Or do you mean some other online FAFSA EFC estimator?
Also the FAFSA EFC is a number that qualifies you (if low enough) for federal and state student aid.
And determines your need (COA-EFC).
But not all schools use only FAFSA, some use CSS profile or their own forms and use a different formula to determine EFC.
So the EFC could be the minimum you pay for schools that cost more than that.
But basically what you pay is direct billed costs of school (tuition, fees, room and board) minus any aid the school gives like merit scholarships or need based aid.
So if a school costs $30k, but you get $18 merit then your net price would be $12k.
Will it matter? With an EFC of $27k or $36k you will not qualify for Pell grants and I can’t imagine a school giving you a lot of SEOG or work study (maybe, but not probable). The only benefit may be a subsidized versus unsubsidezed loan. It the COA is really high, that $9k may make the difference in subbed or unsubbed.
If you entered the wrong number for gross income or AGI, the tax data retrieval tool will make the correction.
Net price calculators sometimes still are from several years ago. The VSA ones just show a COA without and with grants and loans, but don’t have a breakdown of what kind of aid you might qualify for.
Some net price calculators just ask about family size and income bracket (<$30 k, $30-60k, $60-75k, etc), no asset questions.
@twoinanddone It matters at many private schools. I’m on the NPC side, not actual aid, so I make the disclaimer that I may face the same issue as the OP. All of the private colleges that we have looked at are at around $60,000/yr total costs, plus or minus a little. We don’t qualify for any Pell Grants but every school I have looked at gives us considerable aid from the school based on each school’s NPC. The no loan schools offer all aid in grants and the others include around $5,000 in loans by student but all give aid. The $9,000 difference in $27k and $36k is likely to be directly subtracted from aid offered by the college. The $36,000 increase in costs over four years is a lot when you’ve already absorbed $120,000.
At public universities we’ve looked at, the difference in $27k and $36k is moot because need-based aid is federal and state grants which are irrelevant at that EFC.
sportsman88, are you looking at a lot of private schools that give 100% based on need and only use the FAFSA? It could matter if that’s the case, I’m just not familiar with a lot of schools that give aid for the gap between EFC and COA and that only use the FAFSA. Most of the schools my kids applied to didn’t care once the EFC was above about $20k. There was no federal money, and no institutional grants based on need only because those went to the most needy students, and while we had need, we weren’t ‘most needy’. I don’t think it is as simple as a difference of $9k in EFC means the student will get $36k additional over 4 years, especially as that EFC number climbs closer to the COA. A school with a COA of $60k is unlikely to give a need based grant to a student with an EFC of $50k.
It’s likely that every ‘no loan’ school you are looking at that gives 100% of need is not basing that need on the FAFSA EFC. Even if they are, they will use the EFC generated by the actual filed FAFSA, not on the estimator.
It is what it is. If the numbers were put in correctly on both the estimator and the FAFSA form, and different results were received, there isn’t anything the OP can do about it. He didn’t ‘lose’ that $9k difference, it was never his real EFC, just an incorrect estimate. It’s disappointing. It also gives the student a heads up to see if something was put in wrong, although it could have been entered wrong in the estimate rather than on the FAFSA. OP should double check the numbers, but using the rough calculations people did above, the $36k number seems about right and the problem may have been that something wasn’t entered on the estimator (401k contributions? taxes? assets?).