OK so I filled out my FAFSA and I really wasn’t expecting to get much, but I also wasn’t expecting for the EFC to be as high as it was. It’s $140,000 which is really unrealistic for what my family can pay. I thought at first it was because of the assets (about $750,000 in stocks) but then I saw that they only count like 6% of parents’ assets, which is not equal to $140,000. I’m just curious as to what would make the number so high. I already checked to make sure I didn’t enter my parents information under my section so it’s not that. Any suggestions? I would rather take a 40k EFC than 140k, I don’t expect it to be overly low but I just want to make sure I didn’t make a mistake that makes it look like we have more than we do! Thanks!
Not enough information.
What is your parent income?
Do they own a business or are they self employed?
Do you own any real estate other than your primary residence?
How much did your parents contribute to their pretax retirement accounts in 2015?
Assets include all regular savings, checking, money market accounts…not just stocks.
Did your parents cash any stocks in this year…and did they get dividends from any investments!
Did they put the balances IN their retirement accounts as assets?
Well, what was your parents’ income in 2015? What was your income in 2015?
My parent’s haven’t filed their taxes yet because we own our own business, so it takes longer. One of my parents is self-employed at the business, which doesn’t have to be reported because there’s less than 100 employees and we own it all. Total income was about $185,000 last year and mine was only $400 because I only recently got a job. My investments include were $6000. I think pretax retirement was $110,000 (I was thinking maybe that’s why because I saw somewhere that it gets added back but I wasn’t really sure). I know assets include all of those, but the majority is stocks so that’s what I meant, sorry I should have clarified better. I’m not sure about putting balances in the retirements but I don’t think so and I don’t think the stocks were cashed either, but again not 100%. @BelknapPoint @thumper1 thanks for your replies!
So your parent income was $185,000 plus $110,000 that was contributed to their retirement accounts in 2015. That makes $285,000. The FAFSA EFC on that income alone Could be in the $90,000 range…as an estimate…FAFSA EFC is 1/4-1/3 of your GROSS income.
So $90,000 plus 5.6% of a $750,000 asset…could get you up there.
Do your colleges require the FAFSA only?
No, you don’t need to include the business on the fafsa itself, but the schools will ask likely ask for your tax return, and that will include your business supplement.
I know that self employed folks sometimes file their taxes late…and even get extensions to file in Octiber.
This is NOT the year to,do that.
We’re your parents expecting you to get need based financial aid?
Not really, but at the same time I don’t think we were expecting for it to be over 100k, I was thinking more along the lines of like 60k, so like the cost of the prestigious schools but not over the cost. I think I just didn’t know that the $110,000 was added back in so it threw me off a bit 
and oh yeah my dad is definitely going to file his taxes within the next month, he usually starts mid-march, definitely not october! Thanks again for your help! @thumper1
I agree. Even if your EFC isn’t actually $140,000, with the income and asset figures you provided, your EFC is going to be well over any school’s COA. You will not qualify for any need-based aid.
Your EFC isn’t going to make the college cost $140,000 a year. If the cost of attendance is $60,000 a year, you will pay that amount…not $140,000.
By completing a FAFSA, you will be able to take a $5500 Direct Loan for your freshman year, if needed.
ETA do your schools also require the Profile? That will delve into yoir family business earnings.
No, the cost of the school isn’t 140k. That’s a ‘dumb calculation,’ info in, info out.
I didn’t say that the college was going to be 140k? I said I thought the EFC would be “60k, so like the cost of the prestigious schools” as in the cost of the schools are 60k. I thought we would be along the lines where we wouldn’t get any need based, but not extremely over the cost of attendance…and yeah they do so I already had that filled out and sent.
Same difference. It’s a calculation of what your family can pay. (Or could, per the way the formula runs.) The Fafsa doesn’t cross ref the cost of individual colleges and cap the EFC. Some colleges cost more than 60k.
Why does it matter if your EFC is 70k or 700k? If it’s over the COA, you’re not getting aid anyway. You’re not expected to pay more than the COA just because your EFC is higher than the COA.
It really doesn’t matter and I never thought that I had to pay more just because the EFC was higher than the COA. I honestly just wanted to know why it was so high and was curious where it came from, that’s all.
It’s high because your parents have a high income and lots of non-qualified assets. Have they been setting aside college savings for you over the years?
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You’re not going to have to pay more just because the EFC is higher than COA. You only have to pay COA. If your school has a COA of $60k, then that is what you’ll pay. If it has a COA of $45k…then you’ll pay $45k.
Much of your EFC is because of your high income. Just the income alone puts EFC at about $60k (and that’s with no assets).
Then the high assets kicks in with an add’l 6%.
Right, and that’s what OP is saying. You’re misreading the post.
Hope this all works out for you. If your oarents can lay the costs…you are good to go.
And there are also colleges that cost far less than $60,000 a year.if need be, hoping you have some of those on your application list.
At least now you know why the family contribution was as high as it came out to be.
@thumper1 I guess I don’t understand what he’s saying because he’s sending mixed signals…
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Not really, but at the same time I don’t think we were expecting for it to be over 100k, I was thinking more along the lines of like 60k, so like the cost of the prestigious schools but not over the cost.
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If his EFC were to be about $60k rather than the 100k+, what difference really would it make.
His words suggest that he would have been fine with an EFC that is the cost of a prestigious univ (so full pay), but he’s not fine with his EFC being OVER the cost??? What difference does it make???
You said you also have $6000 in assets. That’s going to be assessed at 20%. I don’t think your parents can have $110k in tax benefited retirement in one year, so make sure that all that you are entering on FAFSA in in the correct box. You don’t report all 401k, IRAs, etc., only what they put in last year. Make sure it is pretax earning you are entering, not income already reported in another part of the FAFSA
It probably isn’t just pretax retirement - that’s just what he saw. One parent has a business so there are probably other deductions being added back in . Nonetheless, worth an income of $185000 and assesses of $750000, I’m nor surprised they have a high EFC. 6% on $750,000 alone is $45,000.
OP, I think what people are saying, once your EFC hits a certain number (say, 65000), it doesn’t matter if the EFC is 65001 or 165000 or 650000 - you’re not getting any need based