Is anyone else freaking out about thier EFC?

Parents Forum
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<p>The EFC is just a starting point. You don’t whip out a check book and write a check for that amount. For instance, our son is covered by my DH’s health insurance. That knocks $1600 off the bill. He buys used books. He doesn’t come home very often. So the college Cost of Attendance has some fudge room. </p>

<p>I think it is crazy to NOT do the FAFSA. For many schools, that is exactly how you say “we’d like some money please.” No Fafsa, no money for you. Many colleges have weird awards – so if you have the only incoming freshman who is a tuba player of Albanian descent, then guess what? Your kid could get that scholarship – but only if you have filled out the Fafsa and let the college know you’d like to be in the consideration pile.</p>

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<p>Most insurance companies will give a discount when the student is in school a certain distance away from home. I’m not aware that they do away with the coverage altogether. That would seem to cause a problem if the student drives while home on weekends or breaks.</p>

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<p>181818, I was a stay-at-home mom and this year I went back to work part-time to help make ends meet. I only make $9.40/hr, part-time, and only 6 months of the year (it’s a seasonal job), but that amount is going to eliminate both my kids’ small Pell grant next year and is going to raise our EFC quite a bit according to both the FM and IM calculators. I’m not sure in the final balance it was a good financial move in the short-term to go back to work, but in the long term it’s good because I did need to get back into the workforce after a long break, and although the job is not a full-time year-round job it’s going to be easier to move from one job to another than it is to get a new job after a long break in my employment history. So, I’m thankful for the job I have, even with the increased college costs it’s going to bring. It won’t be a dollar for dollar increase, but probably will eat up about 2/3 of the amount I will make this year. I just hope budget cuts won’t eliminate my job at the same organization next year, but I think it’s not unlikely. Then we’ll be stuck with the higher costs but not have even the small extra income.</p>

<p>Whether increasing income in general is a good idea… I think it depends on individual circumstances.</p>

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<p>We pretty much just figured we wouldn’t get a dime in need based aid and we were correct.
I am always trying to relay this to friends with younger children in my upper middle class neighborhood. Sadly, most of them don’t believe me.</p>

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<p>Your EFC will be provided by the college. The rub is that different schools have different methods of calculating your EFC. In our experience, D was accepted to 7 different schools and the range was about $12k between the highest and the lowest aid package where each school received the exact same information (FAFSA + CSS Profile).</p>

<p>The only thing the FAFSA EFC essentially tells you is if you are eligible for federal aid (Pell, SEOG Grants, Academic Achievement grants, sub/unsubsidzed loans) using the federal methodology. </p>

<p>There is a difference between schools that use the federal methodology (FAFSA only schools) and school that use the institutional methodology (the FAFSA + the CSS profile or the FAFSA + the school’s own institutional aid form)</p>

<p>At minimum you file the FAFSA (at almost every school) to determine your eligibility for federal aid (Pell/ SEOG grants, AAG, Stafford and Perkins loans, state aid, etc). Most public univeristies will just require the fafsa (the exception may be UVA, UNC- CH, Mich and a few others which may require their own forms)</p>

<p>The CSS profile is used at different colleges that distribute their own institutional aid (Many of these schools have much deeper pockets).</p>

<p>Many schools that use a federal methodology to determine EFC will require only the FAFSA. Schools that use an instutional methodology or a combination of the 2 will require the CSS profile or their own FA forms.</p>

<p>Differences between the IM and FM models are</p>

<p>IM collects information on estimated academic year family income, medical expenses, elementary and secondary school tuition and unusual circumstances. FM omits these questions.</p>

<p>IM considers a fuller range of family asset information, while FM ignores assets of siblings, all assets of certain families with less than $50,000 of income, and both home and family farm equity.</p>

<p>FM defines income as the “adjusted gross income” on federal tax returns, plus various categories of untaxed income. IM includes in total income any paper depreciation, business, rental or capital losses which artificially reduce adjusted gross income.</p>

<p>FM does not assume a minimum student contribution to education; IM expects the student, as primary beneficiary of the education, to devote some time each year to earning money to pay for education.</p>

<p>FM ignores the noncustodial parent in cases of divorce or separation; IM expects parents to help pay for education, regardless of current marital status.</p>

<p>FM and IM apply different percentages to adjust the parental contribution when multiple siblings are simultaneously enrolled in college, and IM considers only siblings enrolled in undergraduate programs.</p>

<p>The IM expected family share represents a best estimate of a family’s capacity (relative to other families) to absorb, over time, the costs of education. It is not an assessment of cash on hand, a value judgment about how much a family should be able to use current income, or a measure of liquidity. The final determinations of demonstrated need and awards rest with the University and are based upon a uniform and consistent treatment of family circumstances.</p>

<p>Except in the most extraordinary circumstances, Colleges classifies incoming students as dependent upon parents for institutional aid purposes, even though some students may meet the federal definition of “independence.”</p>

<p>Students enrolling as dependent students are considered dependent throughout their undergraduate years when need for institutional scholarships is determined.</p>

<p>For institutional aid purposes a student may not “declare” independence due to attainment of legal age, internal family arrangements, marriage or family disagreements.</p>

<p>Your COA (cost of attendance) is tuition, room board, books travel expenses and some misc. expenses associated with attending college.</p>

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<p>Doesn’t no FAFSA = no Stafford loans? Stafford loans are “great” loans. You should snatch them up first.</p>

47

<p>Our EFC - approximately the cost of attendance at any college in the US - is half our income. The joys of having money in the bank for college!</p>

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<p>Just to clarify something. It’s not necessarily true that you must file a FAFSA to be considered for merit-based aid. Several of the schools our son is applying to automatically consider all applicants for merit-based aid, whether or not you request aid and whether or not you file the FAFSA or any other form.</p>

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<p>Sybbie-</p>

<p>As usual, GREAT summary. A must read for ALL parents inquiring about financial aid. Maybe mods will sticky it.</p>

<p>Also parents remember, even if your EFC is one amount only a certain set number of schools actually meet your FULL need. The offers that do not meet your full need (COA-EFC= need) are said to GAP. And there are many that do gap. Also remember that need is also met with loans.</p>

<p>My four college-age kiddos received over 50+ financial aid packages and the ranges of the packages were over $15,000 per year. Meaning the difference from a low package to high range was more than $15K PER YEAR x 4 years= $60,000 difference from school A vs. school B. Same exact EFC as determined by FAFSA, same kiddo, same year.</p>

<p>Same EFC, same year, different kiddo, different college= very different packages from colleges</p>

<p>Not all packages are created equal!</p>

<p>Kat</p>

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<p>OP…been there, last year. You really need to impress on your child that merit/scholarship money is going to be very important in their choices. We had a hard time really sinking this thought into our child and ended up with a few of his top choices being full pay schools. It wasn’t a pleasant experience explaining, once again, how this could and ultimately, became a result and therefore, these schools were off the list. I haven’t read any of the responses but I hope they have been civil. Sometimes talking about high EFC in these discussions brings out some nasty comments.</p>

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<p>Can someone explain about the IRS 1040 and 1040a forms- which one works out better in regards to financial aid?</p>

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<p>If you make less than $30,000 and can use the 1040A, you qualify for the Automatic 0 EFC.</p>

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<p>“Maybe mods will sticky it.”</p>

<p>As the op, I’d be happy to ‘sticky’ if I am able, but I will need explicit directions. (I’m new at this.) If the moderators can do it, great.</p>

<p>Thanks everyone for your comments. One poster said that there are phases to coming to terms with one’s EFC. When I first posted, I think I was in denial. With your help, I feel that we are transitioning into acceptance. Thank you.</p>

<p>The rub for us is that our daughter is an athlete, so ED is the surest path for her into an acceptance into her dream school. But given the EFC, (we used a workbook, not an online service,) we feel now compelled to look for merit aid, which may very well keep her from obtaining a coveted spot on an D3 varsity team. We are torn because our child has worked SO hard! She deserves a shot at her dream school. I feel like a financial failure for earning too much now, but not having saved enough before. On another thread, I read where other parents realize that they have been paying off their own school loans from undergrad and graduate school, (as have we,) making it hard to save more. They also point out that the EFC assumes that families have ALWAYS earned what they earn currently. In many cases, that is NOT the case. For us, as teachers, our salaries increase in steps each year and have crept up (not nearly as quickly as inflation, however and the cost of living in our city is HIGH!) </p>

<p>I don’t mean to complain, however. I know that we are lucky in many respects and that the investment we made in our home is a good one. If we were renters, or had just bought our house, our EFC would be much lower. Maybe we are meant to be in debt for the rest of our lives in order for our children to attend private schools. (I do not, personally, believe that our state’s schools will offer similar educational experiences.) </p>

<p>My boss assures me that if you look at COA in chunks, it becomes more manageable. My daughter can work, she can take out some loans, we can take out more loans, they will apply some of her 529, etc.</p>

<p>But, seeing the EFC WAS a shock!</p>

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<p>We are torn because our child has worked SO hard! She deserves a shot at her dream school.</p>

<p>For students with strong applications : scores- grades & EC’s, there are quite a few schools that offer enough need based aid to meet your EFC 100% ( although this usually includes the PROFILE and your EFC may include an expectation that you tap home equity)
Unfortunately- those schools are becoming much more competitive & for most students it can be more difficult to find schools that offer enough merit and need based aid to make paying for a private or out of state university manageable for four years.</p>

<p>[2009</a> Best Values in Private Colleges - Kiplinger.com](<a href=“http://www.kiplinger.com/magazine/archives/2009/01/best_value_private_colleges_09.html]2009”>http://www.kiplinger.com/magazine/archives/2009/01/best_value_private_colleges_09.html)
For those students finding a good fit school either in their home state or in a state with an exchange agreement is a must-do plan in case that long shot doesn’t come in.</p>

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<p>[I think it is crazy to NOT do the FAFSA. For many schools, that is exactly how you say “we’d like some money please.” No Fafsa, no money for you.]</p>

<p>Our son’s school has three categories: aid, aid + merit and merit. For merit scholarships an FAFSA is not needed. He does have a merit scholarship. Our EFC was several times COA and that’s accurate. We have a lot of liquid savings. The cost was our personal information which I consider valuable. Any information in a database with as many people that have access to the FAFSA database is available for a price.</p>

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<p>emeraldkity4: Just to clarify, if a student goes to a school that guarantees to meet need, that is the need as it is determined by the EFC. If the EFC is high as it was for the OP then the FA will still be low. Some private schools will work with you it varies. </p>

<p>'rentof2: Sure, there are a lot of great reasons for taking on a job in spite of EFC. I was specifically looking at increasing my work hours for the purpose of making college more affordable. It however seems that more income means a higher EFC and therefore I haven’t really gotten ahead. It is frustrating. We haven’t yet figured if more hours of work will payoff at all.</p>

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<p>I have heard frequently from people that seem very informed that basically you’re always better off with more income than less, even considering a raised EFC. I guess that’s probably true, but to what degree you’re better off seems really variable. I’m not sure that under slightly different circumstances I wouldn’t consider my free time worth more than the pittance more we end up with after my additional income and the consequent increased expected contribution, loss of the Pell grants, etc. (And if my job is eliminated next year and another is not to be found, then it will turn out to have been a very bad decision indeed.)</p>

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<p>You never know though. It is strange, but true, that it might actually cost you less out-of-pocket to send your kids to private schools, maybe significantly less. In this economy, state schools are really strapped for aid money, whereas private schools have much more flexibility and much more cash. </p>

<p>In our case, here’s what happened: State U offered a miniscule grant and tons of loans & work study to meet our demonstrated need. Private School offered a great scholarship, an even better grant, a small work study, and the federal loans. The bottom line (EFC which we have to pay to get her in the door) was roughly the same, but the makeup of the aid packages was completely different. It would have cost us 3 times as much to send D to State U, even though its COA is half as much. I first heard about this phenomenon when D was a freshman in HS and didn’t believe it, but there it is. It does happen.</p>

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<p>OP, congratulations on your foresight; your EFC may be a shock now, but you’re well ahead of the parents who will wait until January to find out their EFC. Those posts of shock and dismay happen every year, and they’re particularly heartbreaking when they’re from students whose parents have always said “apply anywhere, we’ll make it work”…and then can’t.</p>

<p>We, too, were one of those families who didn’t save enough, although in our case, it was directly related to my husband’s long periods of un/underemployment. We have been extremely fortunate that we have been able to make it work, through a combination of exceptional merit aid from my daughter’s school; my daughter’s aggressive approach to applying for outside scholarships every year; a campus job after freshman year for my daughter; and frugal living on our part.</p>

<p>My suggestions to you are two-fold: have the money talk NOW with your daughter. Our talk was very detailed…we laid out our expectations for her contribution(s) (e.g. if she lost a scholarship due to a low GPA, we would be unable to make up the loss), and we let her know just what we could and could not contribute. We also told her that we would not allow her (or us) to take out private loans, but Stafford loans were expected. The only thing we did not tell her is that we expect to pay off her Stafford loans ourselves; we’ll tell her that at her graduation in June (or sooner if it looks like her loans are changing her plans for her future).</p>

<p>Secondly, I recommend you start a detailed budget now, if you aren’t doing so already. I do a weekly budget for six months in advance, detailing which bills will be paid out of which paycheck and how much I can expect to save each payday. The first thing I do every payday is transfer the expected savings to my daughter’s 529 account, which eliminates the temptation to think I have extra spending money. I’ve been amazed at this “found” money, and while I thought I was reasonably fiscally-responsible, I did discover that I was prone to viewing money left in the checking account at the end of a pay period as spendable, rather than save-able. Now that I save first, I’m much more ready for those college bills, and my discretionary spending is now intentional, rather than purely “because I can.”</p>

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What a wonderful gift, mezzomom! I hope you’ll post a bit about her reaction - I’m sure she’ll be completely thrilled. We are paying our oldest d’s Stafford loan off. She didn’t know we would while she was in school - I wish we had told her on graduation day! She’s very grateful, although it would be a manageable amount for her (just under $200/month).</p>

<p>I also want to thank sybbie for her excellent post #45. I have a friend going through the finaid process for the first time, and of course she finds it confusing (as do I) - I printed it out for her.</p>