<p>My EFC came up to be 39k, which is absolutely ridiculous for my family. We are upper middle class, but we also live in one of the most expensive cities in the country. I'm really curious to how this is calculated. Because my parents don't have loans and know now to manage money does not mean we have 39k left around to spend...</p>
<p>It is primarily driven by income. I don’t remember the formula, but as you get up there in income, the percentage of income goes higher. Parents get a protection allowance on assets depending on the age of the older parent and the number of dependents and then 5.6% of assets over that allowance is taken towards EFC. EFC does not take into account cost of living so someone living in a low cost area gets the same formula as someone in a high cost city. But EFC does not take primary home equity into consideration either. When you start looking at some PROFILE schools that really start digging into what assets you have, your family contribution can go up even higher. </p>
<p>Colleges do not expect you to pay the entire amount out of current earnings. They expect that both you and your parents have saved something for college, that you are going to go on tight budgets to pay for college while you attending, which means work for you too, and they expect that you and your parents may take out some loans to stretch the payments out for aobut 10 years. Past , present and future earnings for you and your parents are what is assume in meeting college costs.</p>
<p>EFC is primarily income driven and a good rule of thumb for incomes above about $75K is that EFC will be about 25-33% of your parent’s Adjusted Gross Income (AGI). If you are interested in the details and want to see exactly how it’s calculated, plug your figures into the federal formula:</p>
<p><a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf</a></p>
<p>Keep in mind that most private schools use their own methodology and calculations for distributing their institutional grants and use the CSS Profile. In most cases your EFC will actually be higher than the federally determined EFC from the FAFSA.</p>
<p>Unless your parents have a lot in savings/assets, it sounds like their income is about $140k. </p>
<p>EFC isn’t based on paying out of current income alone. There’s an assumption that some of EFC is paid from a college fund, current income, and future income (loans).</p>
<p>However, the fact remains that most schools don’t meet need. And, FAFSA EFC is to determine federal aid, so even if the formulas changed and you ended up with a lower EFC, that doesn’t mean that you’d get any additional aid.</p>