<p>When I speak to friends of college age students about financial aid, I always encourage them to apply for aid. I often hear "our income is too high, we won't qualify for aid." They say this with absolute certainty. I don't press the point, but I wonder how they know this? </p>
<p>Is there a magic number after which grants and need based financial aid are denied? These families know how to take out loans without help from colleges.</p>
<p>How much would a family have to make to know they will not qualify? </p>
<p>Nope, no magic number...it depends on the size of the family, other dependents, medical bills, assets & liabilities, current work situation, etc...</p>
<p>To some extent it also depends on where the student plans to attend school.
While an EFC may be $30K that is only a portion of the yearly cost of a high end school.</p>
<p>As the other responses have said, there are a lot of variables and no magic number.</p>
<p>That said, you can play around with the financial aid calculators to get an idea. For a "normal" family that doesn't have exorbitant medical bills or extravagant assets such as vacation homes and hundreds of thousands of dollars in savings, income somewhere in the $140,000 to $150,000 range seems to create EFC of about $40,000, which is about the cost at many private colleges. Large amounts of home equity factor into higher EFC using the Institutional Methodology, so the home equity policy of the school will play a role. But as a general guideline, I would say someone would have to make about $140-$150k to know with relative certainty that they won't qualify for any financial aid. Anything less than that and it's at least possible.</p>
<p>No magic number is right. But medical bills (mentioned above) aren't considered, nor are most liabilities.</p>
<p>FAFSA EFC considers Parent's reportable assets (above an asset protection allowance which depends on the family size and age of the older parent, but which is typically about 50K, and excludes property such as cars, primary home, etc ), Student's reportable assets (no asset protection allowance), Parent's AGI (this is the prime determiner of EFC for most families), and Student's income (above an income protection allowance of about $3 K). Liabilities against reportable assets are considered, for example a home mortage is deducted from the value of the primary residence to determine the current equity), but other liabilities (credit card debt, medical bills, car payments) are not.</p>
<p>For most families, parent's reportable assets don't exceed their asset protection allowance, and the student's income doesn't exceed the student's income protection allowance, so the EFC ends up being primary a result of the Parent's AGI, and to a lesser extent the Student's reportable assets.</p>
<p>Under FAFSA, families with an AGI under 50K are pretty much guaranteed significant need-based aid. Most families with AGI in the 75 to 100K range can expect an EFC that will be below the total cost of most colleges, and can expect some aid. These are the folks who can most benefit from doing some pre-planning financially as the college years approach to arrange their finances in the most favorable way (for example, not putting college savings in the student's name).</p>
<p>Above 125K or so AGI, most families will see their EFC exceeding the cost of all but the most pricey colleges, except in some very unusual circumstances.</p>
<p>Use the FinAid calculator to try various scenarios and see how the EFC comes out, and how it compares with the cost of colleges you're considering.</p>
<p>I'm curious--does the FAFSA have some sort of cost of living allowance? My parents make around 140k, but we live in NYC. Also, I've had lots of medical care, ~10 surgeries, etc. for most of my life, so our medical expenses were quite high until recently. Now they don't meet the minimum threshold needed for the FAFSA to count the bills as "extensive" expenses, but until recently those expenses have prevented us from saving for college. Would this sort of stuff be considered?</p>
<p>No COLA in FAFSA. There is an Income Protection Allowance for parents (they don't start to assess income until it reaches a certain level, which is pretty low), and an Asset Protection Allowance below which assets aren't considered (usually around 50K).</p>
<p>But no real direct consideration of debt, or of expenses, since those are generally considered the result of decisions the parents have made (debt against a reportable asset like a home mortgage would be an exception, and it IS considered). To the extent that they've been able to deduct your medical expenses their Schedule A in order to reduce the AGI, those expenses can indirectly increase your potential aid. But only in the tax year those expenses were incurred (so, for example, if you medical expenses were in '06, and you can deduct them to reduce your AGI in '06, that will help you when submitting the FAFSA in early '07 for entering college in '07/'08).</p>
<p>If they made around 140K in '06 with few deductable medical expenses (or other unusual deductable expenses), their income will likely result in an EFC higher than the cost of most all colleges. Run some numbers in the FinAid calculator to see for sure.</p>
<p>With regard to huge medical bills or similar very unusual circumstances, you can contact the financial aid office of each U & explain the situation & medical bills and see if the school will exercise financial judgment to make any adjustments to your eligibility. Schools have SOME latitude if you can document these unusual and very high expenses. You can try calling the FAid offices at the Us you're interested in, anonymously explaining the situation & see what they have to say.</p>
<p>Okay, thanks guys. I'm still a junior, so I have plenty of time, but finances are definitely a large issue for us so I'm starting to hunt around a bit.</p>