<p>I was just wondering. How do they figure student assets in regard to the students EFC if student assets are required to be reported to the College the student is attending. I was wondering if they take any money the student may have in the bank, or any bond a student may have ETC. and take 20% of the total and then add it DIRECTLY to the EFC.
Thank you.</p>
<p>If the college uses FAFSA, then 20% of all student assets (not including any 529s or retirement accounts) go directly to the bottom line of the EFC.</p>
<p>If you’re talking about reporting assets to the college, is this outside of the FAFSA filing? If so then the college might have some other way to determine the student’s contribution.</p>
<p>By bottom line of the EFC do you mean they add it on to the EFC you already have. I am wondering for next year. This year they didn’t count the assets against us, but almost did because of misunderstanding of our eligibility to fill out a 1040A tax form.</p>
<p>So if they actually reduce your financial aid by 1/5 of the students assets (not including 529’s or retirement accounts) the money you saved for college could be reduced by 1/5. </p>
<p>example: Your son has 5,000 saved for college. They require you submit the assets. You get less $1,000 less in the pell grant. (1/5) OF $5,000. The next year they assess the same amount of money minus $1,000 and you receive $800.00 less in financial aid. 1/5 of the remaining $4,000. So you have already lost $1,800 in 2 years that you would have received in a pell grant had you not saved.</p>
<p>The assets are based on whatever the assets are at the time you report them each year. So if the assets are $5000 this year they would increase the EFC by 1000. If he still had $5000 next year then they would impact the EFC by 1000 again next year. But if he had spent some of the money on living expenses and had only $2000 left then the impact would be 20% of $2000, so 400.</p>
<p>The EFC is recalculated every year using current data that you report. The data does not get carried forward from one years FAFSA to the next.</p>
<p>No, nothing’s added on to the EFC you already have (if I understand your question).</p>
<p>If you’re talking about FAFSA, then the EFC has two components, the parent contribution and the student contribution. These get added together to give you a total EFC. I was talking about the student contribution portion of the total EFC.</p>
<p>The parent contribution has allowances for both income and assets, so it can’t be calculated as a straight percentage of either. The student contribution has an income allowance of $4500, but no asset protection allowance, therefore the student’s contribution from assets to the EFC is at the rate of 20% of reported assets. </p>
<p>If the student has $5000 in reported assets, then the student’s contribution from assets to the total EFC will be $1000. If the student spends that $1000 on college in year one and doesn’t add to his assets, then the total student assets for year 2 will be $4000, which will add $800 to the total EFC.</p>
<p>If you have an automatic zero EFC then it’s my understanding that the student assets are irrelevant.</p>
<p>.<br>
So just regarding the student asset portion of figuring out the EFC, the student’s assets are assessed at 1/5 and added to the EFC that was arrived at using all the other factors. </p>
<p>So, is the EFC a dollar for dollar, or in some way a knowable reduction, of students pell grant.</p>
<p>Using the $5,000 and 1/5 example, would the student actually receive dollar for dollar $1,000 less in pell grant, or is the EFC a index, or number used, and then the FIN AID uses another formula involving the EFC to decrease the student’s pell grant, but maybe not the full $1,000 (the 1/5 of $5,000) used in the example.</p>
<p>The Pell grant requires an EFC of 4617 or less. If the student has a 0 EFC he is eligible for the full $5550 Pell. The Pell decreases inversely as the EFC increases - not quite $ for $ but roughly so (I think it is in $100 segments). But a student with a 4617 EFC gets $1176 and an EFC of 4618 gets $0 pell.</p>
<p>There is a Pell grant disbursement table the schools use. The amount of grant depends on status (full or part time), COA, and EFC. Here’s a link to next year’s table:</p>
<p><a href=“http://www.ifap.ed.gov/dpcletters/attachments/P1001Attachment.pdf[/url]”>http://www.ifap.ed.gov/dpcletters/attachments/P1001Attachment.pdf</a></p>
<p>I think I have a better grasp. Using the $5,000/ 20% increase in the EFC regarding the student assets that I used above, the EFC would be increased by $1,000 for the year. </p>
<p>Then the financial aid uses the EFC to come to the amount of Financial Aid in the form of a Pell grant that a student receives. </p>
<p>Maybe there is an EFC calculator to plug in different EFC’s to see just how much that saving will cost the student. For example increase the EFC by $1,000 to see how much saving in a child’s name ($5,000 at 20%) would cost for the year. </p>
<p>I see by what both swimcatsmom and vballsmom have said that saving in the students name can be very costly.</p>
<p>clbmom</p>
<p>If the student intends to use his or her savings for college anyway, then open up a student-owned 529 account, transfer all the savings to the account, and draw from it over the 4 years to pay for qualified education expenses (tuition, room & board etc). Any 529 account, even one owned by the student, is assessed at the parent rate of 5.6%. Only do this with funds that the student will be using for college anyway, since there are penalties and tax consequences to withdrawing the funds for non-qualified expenses. The account must be in the student’s name since it’s his or her money to begin with.</p>
<p>Here’s a calculator although it’s 2 years out of date, so don’t take the results as gospel:</p>
<p>[FinAid</a> | Calculators | Expected Family Contribution (EFC) and Financial Aid](<a href=“http://www.finaid.org/calculators/finaidestimate.phtml]FinAid”>http://www.finaid.org/calculators/finaidestimate.phtml)</p>
<p>Thank you. I wrote several e-mails but my computer keeps turning off and on and I loose the messages and can’t send them. Thank you all so much. I have used all the information you have given me. I will try to write tommorow if my husband can fix the computer tonight Thanks for the pell table clbmom</p>
<p>PELL GRANT decreased in direct proportion dollar for dollar to EFC increase. Thank you swimcatsmom.<br>
Thanks sk8rmom for pell table. It shows the EFC relation to Pell Grant money received. </p>
<p>Thanks vballmom for 529 info.</p>