<p>I have 2 in college next year. Each has an EFC amount. This amount for 2 kids is about half my income. There is no way I could actually shell out half of my income with out being way below the poverty level. So my question would be: since I do have savings accounts with available assest are these looked at as a source of money? There must be some calculation that includes other sources such as savings accounts. I know that your home equity and 401K's are not included.</p>
<p>Your EFC assumes that you and your kids have saved for college in a fashion commensurate with your current income. The problem is that the one year snapshot of finances does not anywhere come close to what one’s history is.<br>
EFC is often said to stand for “Every Friggin’ Cent”.</p>
<p>Yes the EFC takes into account income and assets. For most people income has a larger impact on the EFC as there is some parent asset protection based on the number of parents and the age of the older parent. Assets over the protected amounts affect the EFC by @ 5.6% of their value. Also the students income/assets affect the EFC. Student income over protected allowances (% $4000 ish) affect the EFC by 50%(!). Student assets have no protection and affect the EFC by 20%.</p>
<p>Also remember that, unless the school promises to meet full need (most do not), the EFC does not mean that is all you will be expected to pay. It is merely a number used to calculate eligibility for federal aid (which is minimal unless the EFC is very low - for EFCs over 4617 federal aid is loans and maybe WS). FAFSA only schools use it to calculate their institutional aid, if there is any.</p>
<p>You can play with one of the EFC calculators to see what a difference your savings makes. (You’ll see it’s a lot). As swimcat said (and she’s one of the experts here on cc on fin aid!!!), EFC doesn’t really mean what you’re going to pay. D’s have a very low EFC this year, but their fin aid awards show a big amount of “unmet need”, even if they take all of the offered loans. We can swing it, but I shake my head in wonder at how most other people handle this.</p>