<p>I know there have been many threads about this, but I have to put my two cents in. I know there are many factors that determine your EFC, but I think ours is way too high. We make 42,000 (AGI), have $20K in home equity, and 3,000 in the bank. My husband is 62, collects SSI and has additional modest income as an independent sales rep. I work full-time and make about $35,000. Our daughter made $4,500 last year, which adds $750 to our EFC. When we estimated our FAFSA (AGI of $39,400) before filing our tax returns, our EFC was $4,200. Yesterday, we corrected our FAFSA with the $42,000 AGI. However, we neglected to reduce our non-taxable SSI amount because it turned out about half of it was taxed. We have to go back in and make this correction (we were told we have to wait 3 days before recorrecting). Nevertheless, our new EFC was $6,200. How could it go up by $2,000, when our actual AGI was only $3,000 more than our estimate? I think this is outrageous. I carefully reviewed our information, and the only mistake I found was for our SSI untaxable income, which was reduced by half. I'm hoping that when we correct, our EFC will go down considerably. Sorry to rant about this, I'm looking for others to commiserate with.</p>
<p>Maybe you don't understand that FAFSA is the qualifier. What an individual school chooses to award as financial aid might differ from EFC. What schools will your daughter apply to? Have you investigated what their aid and avg. student debt are?
<a href="http://www.ifap.ed.gov/efcinformation/11200708EFCFormulaGuide.html%5B/url%5D">http://www.ifap.ed.gov/efcinformation/11200708EFCFormulaGuide.html</a></p>
<p>With an AGI income of less than $50K per year, doesn't this family qualify for the simplified needs test? I'm not very familiar with this...but it was my understanding that this was advantageous for families with incomes below this amount. Perhaps someone else here can help out?</p>
<p>If parent AGI is under 50K and short tax form used, all family assets are excluded from EFC calculation (simplified needs test). Here it only takes the 3K in the bank off the table. Home equity of primary residence (here, 20K) is never included in the EFC calculation.</p>
<p>I think if you are self employed- you can't file the simple short form- isn't that the qualifier?
( also if H is semi retired- the individual schools may offer a different package than what FAFSA indicates)
Simplified need test chart</p>
<p>Your daughter should be able to earn about $3,000 from a summer job- the balance of that will probably have to come from savings, loans and income.
I know that when we were able to file the 1040A we had a lower EFC ( plus hella easier to do taxes) but usually we have to take deductions- so it is a trade off- less in taxes, less in financial aid.</p>
<p>If she finds a school that offers merit awards though, that isn't dependent on need, and your EFC is still low enough that a need based- merit award should still be a possiblity.
<a href="http://www.finaid.org/fafsa/maximize.phtml%5B/url%5D">http://www.finaid.org/fafsa/maximize.phtml</a></p>
<p>Yes, self employed have to file long form</p>
<p>Would being an independent sales rep be considered self employed? I guess it depends on the structure of the company. Yes...self employed cannot do a short tax form.</p>
<p>I think if you get a W2-you're an employee; if 1099-Misc, you're considered an independent contractor and self employed</p>
<p>Im rally confused about the equity
two years ago precollege mom had $50K in equity- where the heck do you live that housing expenses are going down?
Our house has been appreciating so much that the only way we could move is if we moved to rural georgia.
also if you are only counting your adjusted gross income- instead of all income before taxes- it is pretty accurate that EFC will be 1/4 to 1/3 of AGI.
So if your AGI is $42,000- it won't be uncommon to have an EFC of $6,000 to $7,000</p>
<p>my understanding is that the assets of $3000 in the bank would excluded -- FAFSA worksheet shows an asset allowance of $68,100 for a two parent household with the oldest parent being 62. As was said before -- primary house equity won't count if using FAFSA methodology.</p>
<p>you FAFSA is based soley on income (plus student assets and income) so any increase in income will increase the EFC.</p>
<p>I ran the numbers precollegemom provided above at the finaid.org calculator and it came up with an EFC of around $4450. But I can also see from other posts that the numbers precollegemom don't tell the whole story. </p>
<p>I don't think the $42K AGI includes the social security payments, and the part that is not mentioned here (but was discussed last June), is that the daughter also gets a $750/monthly social security payment in addition to the husband's income. So unless that part has changed, there is some additional money being counted in the mix. </p>
<p>If I assume that d. received the SS payments for only 5 months out of the year - for $3750 total -- that pushed EFC up to $6269 -- it is all coming from the student's contribution of course. So right there I've figured out the discrepency.</p>
<p>To precollegemom --
go to <a href="http://finaid.org/calculators/scripts/estimate.cgi%5B/url%5D">http://finaid.org/calculators/scripts/estimate.cgi</a> and very carefully fill out the form there, making sure the numbers are exactly as they should be in the FAFSA -- do NOT include home equity; select "Federal Methodology". The report will give you a breakdown that looks something like this (my numbers): </p>
<p>Estimated Expected Family Contribution (EFC):
Parents' Contribution 3939
Student's Contribution 2330</p>
<p>TOTAL ESTIMATED FAMILY CONTRIBUTION: 6269</p>
<p>You will be able to see where the breakdown is, and you can see how various numbers effect the calculation by changing figures and rerunning the calculation. </p>
<p>But basically from the info that you provided now and in previous posts, it looks like the extra figure is supposed to come out of your daughter's income.</p>
<p>Thank you all for your responses. Calmom, your analysis is right on the money (no pun intended). We did not include our measly home equity but did include our daughter's $750/month Social Security (we were intructed to include her SSI in our income, since it is paid to my husband on her behalf). Somehow I was under the impression that if you make less than $50,000 a year, your EFC would be much lower than $6,000 a year. Emeraldkity4, FYI, our home equity decreased from $50,000 to $20,000 a year ago when we had to remortgage to pay off bills that accumulated after my husband had open-heart surgery and couldn't work for several months, before he was eligible for Social Security.</p>
<p>I figured it was something like that-
Re social security-calculate it without your daughters social security benefits once she turns 18 and connect with the colleges, to insure they give you some idea of what your package will be in that instance</p>
<p>does your daughter turn 18 before she starts college? If so, you will need to contact the schools and ask how to go about requesting a "professional judgement" that will exclude that income. The FA officers will require paperwork detailing the changes and they are authorized to adjust the EFC based on the new income figures -- that will make a difference in the EFC.</p>