<p>Ive seen alot of posts from people who can't get financial aid because of their EFC of $50,000 on an income of $150,000 - $200,000. Well, guess what? If your EFC is $28,000 - 30,000 on a two-parent income of around $100,000, you aren't getting anything but LOANS either, unless you do go IVY or to a pricey private school (meaning over $40,000!). This income bracket is the one who really takes a hit--I've discovered this after going from part-time to full-time this year. All my extra income practically goes toward the EFC--I was part-time for 22 years and I picked the wrong time to go full-time, but I didn't feel like I could turn down the opportunity for full benefits with health care and retirement in 7-10 years. Of course the Fafsa doesn't know that for 22 years I made 60% less than what I made this year! (I obviously have not been able to save as much these last 22 years as I would have on my new salary, but since EFC is mainly based on this years income, we are screwed!) Well pay full price at a state school, and all but a loan and maybe a couple of thousand in institutional grant money at a private school that costs around $35,000-40,000. Unless you find one that really meets 100% of your need--few and far between. I'd rather have an income of $150,000 and pay the same college cost as the person making only 100 grand. Both income levels are out of luck for any help! We are both going to pay almost full price! That's the bottom line if you are looking at any school except the ones that are $40,000 and higher, and my kid thankfully isn't even interested in that! Thank goodness for a smart, responsible kid who can get some merit money--I don't know what I'd do without it! Colleges are going to price themselves out of the middle class market if they dont get increases under control! We are weighing the cost of private and public, and with her top 2 choices private, basically waiting to see if the merit money will offset the huge difference in cost from a public in-state school. Problem is, my states in-state costs are about $5-7000 more than surrounding states in-state costs. She could almost go to an out-of-state public school for the same amount as a couple of our in-state public schools. Its just if you have a lottery scholarship of $5-7000 then you cant take it across state lines. (Yes, we have B average and other lottery merit scholarships but all the schools really did was hike up tuition that same amountit really hurts the kid who doesnt qualify for the state lottery money and now has to pay the extra $5,000 and the 40% who lose the lottery scholarship the freshman year and now have to pay the full amount!) Maybe I need to go buy a lottery ticket .</p>
<p>Yeah, but you'll pay about 50% in taxes on the winnings ... have to include it in your AGI ... and get assessed a portion of the amount in the bank as an asset. Kind of makes you think twice about buying a ticket.</p>
<p>How true! Good thing I've never bought a ticket--I'd never be lucky enough to win and I'd just be funding someone else's education! But then again, I'd probably win just enough to bump my EFC a little higher and the spiral continues!! I'd love to know who came up with the formula for EFC and how often it has been adjusted!</p>
<p>I know the answer to that one! The culprit is ... CONGRESS. The formula is changed whenever the Higher Education Act is reauthorized (which just recently happened). Look up the act - it's great reading for sleepless nights.</p>
<p>The irony is, with a $30K EFC I think it feels like an OK deal for the folks whose kids do want the $50K plus colleges that meet need without loans. They are getting a $20K gift!</p>
<p>You are right about that! I guess I'm thinking about my region of the country and except for Duke and Vanderbilt, most private colleges are in the mid to upper 30's, or low 40's, like Furman (most expensive one in SC). Wake Forest is one of the few places I know of that says they meet your need without loans. I've heard that some of the southern private schools attract families from the northeast because they don't have the $40,000+ price tags. My sister's D was the opposite --chose a private school in PA that is in the mid 40's instead of staying in the south. Go figure! But she loves it!</p>
<p>For the vast majority of folks, the vast majority of time, a low EFC is not a blessing. The lower the EFC, the harder it is to come up with any money. Exceptions are if you have a money source somewhere not reflected in the EFC. Those who have a zero EFC have not hit a jackpot of any sort with what PELL and other government programs have. Unless, as the OP stipulates, the student gets into a 100% of need met schoool, it's not doable. </p>
<p>Where it can make a big difference in aid is that there are need aware schools. Those schools are more likely to accept the $30K EFC student vs the $50K student unless that $50K student is much stronger in stats. Also it is a bit easier to cobble a merit within need package. Some kids I know who were in that situation got some nice merit money from admissions, and then financial aid came up with the need dollars. Because no government money was involved, they ended up getting close to their whole tab paid. Also parents making more money are usually in better position to take out loans through PLUS and help their kids with the unsubsidized loans.</p>
<p>The state schools can be out of reach for those with low EFCs as they are not likely to meet full need. Someone with $30K EFC isn't going to get any more in need than the family with a $50K EFC. But a few thousand in merit money, some loans, some extra work hours on part of the kid, and state schools are very doable for a family making $150K, most of the time. It's when we start looking at those high end private colleges that it gets rocky.</p>
<p>The real problem, in my opinion, is that those who make more money tend to spend it on such difficult to liquidate things like homes and may well have less disposable income than someone making less. I know that is one of our follies. We bought more house than we should have, and now can't get rid of it easily. So our disposable income (especially since we have kids in private schools and college) is a lot less than many folks who make less than we do who have not chosen to spend their money the way we did. That was our own doing. </p>
<p>Some things that I feel really have an impact on ability to save are: 1) cost of living in your area. 2) Past income. In the NYC area, making $100K a year is not going to give you many choices for family housing if you want a safe neighborhood and decent schools. If your work history is such that you have been making $50K or so a year for the last ten years, and just recently doubled your income, maybe because the spouse went back to work, or you relocated, you are not likely to be in the same financial position as someone who has been making that income for a while. Even worse if you decided to move into a pricier home with the extra money. </p>
<p>In my opinion, it is better to have a higher EFC. An exception is if you just miss the cut off for the PELL.</p>
<p>Thanks for your input. Thank goodness we did not buy too much house, nor when I went from a 60% salary to full-time last January did we splurge with any of the extra money, knowing college was here. It's really just frustrating that the FAFSA does not reflect your income for more than one year--for 22 years I was making 60% of a full-time employee's salary. Now because I am full-time, my EFC jumped considerably but I haven't had this salary for 22 years for savings purposes! But we still would not have been near the PELL grant cut-off, so we are probably better off having some money to use on college. Does the FAFSA take into consideration the cost of living where you reside?</p>
<p>"Where it can make a big difference in aid is that there are need aware schools. Those schools are more likely to accept the $30K EFC student vs the $50K student unless that $50K student is much stronger in stats" -- I am not certain that will be so true. I suspect if the school is one of the few with sufficient FA resources, the two would be equal. If the school does not have sufficient resources for all, tie goes to the 50K.</p>
<p>
[quote]
Does the FAFSA take into consideration the cost of living where you reside?
[/quote]
No, it does not.</p>
<p>It really is the "keeping up with the Jones'" syndrome. The tendancy is to increase your manner of living when you salary increases. It's also affecting our children and their wants and desires. Since I have been preparing to send my oldest to college 2.5 years from now, and given my experience in financial aid, I started the discussion early. I have an added benefit that many don't have: a tuition benefit that will allow my children to attend certain 4 year private's without the cost of tuition. We'll only have to come up with room, board, books, etc. But, my daughter in the spirit of "Jones'ing" wants to attend a school whose 5 year tuition cost is $84k (that's JUST tuition). <scratching head=""> free versus $16,800 per year...and, to boot, and EFC (for 08-09) near the 500 mark.</scratching></p>
<p>Most, if not all, colleges allow space somewhere on the application for explanations of unusual circumstances. That's where the OP can let schools know that the family income has only recently risen to the current level so it was not possible for the family to accumulate savings. If your schools don't have their own forms, call and see how they'd like the information - maybe a letter of explanation is enough.</p>
<p>Sorry, Kayf, my mistake. You are right. The larger EFC will have an advantage at need aware schools because they have to manage their money to go as far as it can. It's just more expensive to accept the one with the greater need, and that student would have to stellar to make the cut. Once the school is down to where they have to look at need, the less need, the better for getting accepted.</p>
<p>There is that argument, however, that those who just recently have been making more money may not yet have spent it on things like more expensive housing which is difficult to liquidate. A family making $100K or thereabouts for ten years, has probably established itself around that income. Most families will get the best house they can for the money in terms of school, resale, safety, etc. Then furnishings, upkeep, activities, etc goes to that level. Someone who has just gotten up to that level may not yet have adjusted standard of living there.</p>
<p>So what is one to do with a 35000 number? I could go to an expensive school, should I?</p>
<p>OP: Please paragraph. My eyes have a tough time. Thanks.</p>