What to do about a high EFC?

Paying for College
1

<p>So, the EFC generated by FAFSA and my financial aid estimate from Caltech were very scary for me, as the EFC for my family is a very high percentage of our income, and we don't have much assets, save money that is saved for my sister and me for college (and that we did have to report on FAFSA).</p>

<p>My question is, what to do to pay off the EFC, and where do schools think the money is going to come from? My mom showed me exactly her financial resources after taxes and insurance, and it boils down to the fact that it will not be possible for her to pay nearly all of the EFC with just income alone.</p>

<p>Ok, so options: </p>

<p>-I can work more. Check. I have a well-paying job set up for the summer and I'm already working two jobs. However, this just "hurts" my chances for aid for next year, as my college will see that my income went up, and therefore it will calculate that I can pay more, and decrease aid.</p>

<p>-I can apply for scholarships. However, it seems like scholarships don't decrease EFC until EVERYTHING else has been decreased (work study, and school aid inclusive). Am I wrong about this? If this is the way it is, then don't scholarships help the school, not me, for the most part??</p>

<p>-My mom can work more. YAY THEN THEY TAKE MORE OF OUR MONEY. <em>sigh</em> This doesn't seem like an option that will actually help at all.</p>

<p>-Go to Harvard. Ha! If I get accepted, though, their new aid plan will probably be irresistible, I must say.</p>

<p>-Spend all of the money that we have saved for my sister and me in one year. Then, upon recalculating aid next year, we will have pretty much 0 assets, and we might get more aid. We do have enough to pay for 1 year of EFC with the money we have saved. But what about my sister, who will start college the year after I graduate? (Terrible timing, I know). It seems like a risky idea to spend it all at once - but then, does saving ACTUALLY help pay for college?? It seems like saving just decreases financial aid, making you have to pay more in the long run!</p>

<p>Loans, Loans, Loans. I really want to avoid them, but unless there are options that I haven't considered, it seems like loans will be the only other way to get rid of that gap between what colleges CALCULATE that my family can pay, and what we can actually pay.</p>

<p>What do other people do in this situation? How can I avoid loans? Is there any way to use scholarships to help contribute to the EFC part of the cost? Where do families find the money to meet the EFC?</p>

2

<p>Are you and your sister both seniors in high school this year? If so, there's not a lot you can do to shift your savings around. </p>

<p>Are your college savings in your own names, are they in 529 accounts with you as the owner, or are they in parent-owned 529 accounts? This is one area where you have the possibility of shifting funds (legally) so that these savings are assessed at the parent rate of around 5% vs the student rate of 20%. There have been several threads on this topic, and you can also refer to the page on finaid.com:</p>

<p>FinAid</a> | Financial Aid Applications | Maximizing Your Aid Eligibility</p>

3

<p>If you have time, read "Paying for College Without Going Broke" - many libraries have it, so you can save your $ to pay that EFC. It's a very helpful book that suggest answers to many of your questions.</p>

4

<p>You missed a couple of things. First, your parents can take out a home equity loan to help pay for your college. And second, you can apply to colleges with merit scholarships (doesn't CalTech have some??) What you have to understand is that you are expected to pay your EFC with a combination of current earnings, savings and loans. That is why you're seeing a gap between what you family can 'afford' and your EFC. </p>

<p>At most schools, any outside scholarships that you get will apply to the loan portion of your FA package first. However, after that they will cut into your work study or grant portion. Also, one thing to remember is that the majority of outside scholarships are for one year only and most are for incoming freshmen. So, it will be much more difficult to supplement your last three years of college with outside scholarships.</p>

5

<p>Thank you everyone for the suggestions! I actually realized one of the problems was that my mom had overestimated her gross income on the FAFSA by quite a lot. That made a bit of a difference! Home equity loans are not an option for us... we don't own a home. But I will look into the suggested books and also into other options. Thanks again!</p>

6

<p>Tell your mom, next year if she is going to submit before doing taxes, always UNDERestimate income. You don't want to do it by a lot, but it's better to have the school take away a few dollars when the real numbers are in than to risk them not having FA dollars left to increase your package with.</p>

7

<p>does the efc take into account things other than tuition (room/board, personal expenses.....)?</p>

8

<p>EFC is your expected family contribution for all expenses, it does not change even if the COA (cost of attendance) changes. COA includes tuition, fees, room and board, and allowances (which vary between colleges) for books, travel, etc.</p>