<p>If you had complete control over the methodology that determines what someone's EFC is:</p>
<p>Excluding money that would come from assets (so income only), how much money would you expect 2 parents with a combined annual income of $150,000 to contribute?</p>
<p>I just want to see how well people's figures jive with what College Board says.</p>
<p>I would have to know more than just the annual income. I need number in household, type of income, number in college, age of parents.</p>
<p>First of all, I'd be thrilled if we made $150K. Second, I would love it if we didn't have to contribute anything.</p>
<p>That would be my personal methodology, of course. The rest of y'all would have to pay more, so that I <em>could</em> pay less! :)</p>
<p>If that's gross income, their take-home pay is a whole lot less than $150K. That's the 28% federal tax bracket, right? So they're losing $42,000 to the federal government right off the bat. </p>
<p>Not that it isn't still a nice healthy income. I'd feel lucky to have it. </p>
<p>If there aren't any unusual extenuating circumstances, like crippling amounts of debt or a really big family size...I'd say maybe $20-25,000?</p>
<p>Wow, I personally think that a fifth to a quarter of your annual income is a lot. Of course, my goal is to get my daughter through college with no debt for either her or us so I wouldn't borrow to go that high.</p>
<p>$20,000 is only 13% of $150,000, not 20-25%.</p>
<p>Really? Wow, what was I thinking?</p>
<p>If the $150K is gross pay, they don't really have that much to spend, now, do they? More like around $108K, really, and I rounded down to 100K.</p>
<p>An awful lot of people would consider $100K a very generous amount to spend, though.</p>
<p>I'm sure they would and I would too. I just think that a quarter of someone's income is a lot when you consider they probably have a mortgage, maybe a car payment and other children waiting in the wings.</p>
<p>The expected family contribution is the total for the year for all kids combined, right? </p>
<p>i.e., if I were this hypothetical $150K household and was expected to contribute $20K when Child #1 started college, I would not be expected to contribute $40K when Child #2 started college? I would be still expected to contribute a total of $20K, divided between the two kids?</p>
<p>I would hope that's the case, but I haven't filled out my first FAFSA yet (D1 is a senior this fall), so it's new territory for me.</p>
<p>A minor nit: the Federal Income Tax is graduated. So your marginal rate is 28%. Not your tax rate. A 401K can knock down your income for tax purposes. You get exemptions per person. You can take the standard deduction. And you may have credits available. So the amount of taxes paid will be quite a bit less than $42K.</p>
<p>and your EFC is expected to paid from SAVINGS, not just current earnings. If a family is earning 150K for several years before college starts, they should have been Saving every year. Surely with an income of 150K, a family should be able to put aside money each year Before college starts</p>
<p>You would think so, but my daughter has a friend who's parents haven't been and boy, is she in a pickle now.</p>
<p>Completely arbitrary, with zero think-through...</p>
<p>This formula would apply to families whose AGI exceeds a certain threshold, TBD.</p>
<p>EFC = 30% of Household AGI - any amounts contributed to a retirement savings plan.</p>
<p>If a family's AGI falls below the threshold, then
EFC = 10% of AGI</p>
<p>The experts can determine the threshold.</p>
<p>DougBetsy - I think that must be pretty darn close for a middle class family with average to slightly better than average savings....it was darn close to what our EFC has been the past two years....it was not 30% of our Adjusted Gross Income off the tax form however, because of how our savings is structured, we have assets that show a book loss and drops our AGI, BUT the FAFSA looks at them and the value of the assets gets added back in so we end up at the 30% that is closer to our gross income before certain subtractions that take us to our AGI. Unforuntately we're one of the cash poor asset rich middle class LOL with assets that can't be tapped very easily but hopefully can be tapped for our retirement It feels sometimes that posters don't totally understand the part that assets that may not easily be convertible to cash can push up their EFC. Our EFC is doable...painful...but doable partially from savings and partially from income and partially from Stafford loan and probably "fair"...even though I hate to say that. I would be hard pressed to believe that a family with a gross income of $150,000 would have a less than a lower double digit EFC given the FAFSA and how it calculates. If so, then FAFSA is broken.</p>
<p>jaf1991, if 5-10K per year can't be saved with an income of 150K, then maybe the parents should rethink their priorities. I realize that cost of living can vary widely, but in 99% of places you can live quite well on that income (with rare exceptions). I am amazed at the waste in money in so many people's lives. From starbucks to new cars every 4 years and the gamut in between, it makes me sick. I hope that girl's parents have apologized for making bad decisions. Maybe she will be merit aid that is irregardless of income. </p>
<p>in this day and age ignorance about what goes into the EFC is no excuse. The information about it and so much else about FA is out there for the taking.</p>