Why is my EFC so high?

@rickle1 any idea?

Have to read up on that.

The EFC number that we get from FAFSA is for 4 years or 1 year of family contribution?

One year, for one student. If you have multiple children in college, each has to complete a FAFSA and the EFC is for that student, for one year.

Thanks for trying to find help. It is a glitch in the system that the Dept. Of Education should have guidance on, but they leave it to the schools to deal with it.

FA offices are busy and it is hard finding someone who can/will try to understand. Most just say “we accept the DRT as accurate” but fail to take into account these unique situations caused by the CARES Act.

Hopefully I will find someone at one of the FA offices that will fix it, but nobody will even look at it until the FA offer is completed ( even though it will be calculated incorrectly). I wish they would be proactive and look at it now.

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One year.

I’m in the same boat – not a rollover, but an early distribution under the CARES Act due to a lost pt job. I was able to explain as much in the CSS Profile (and our CSS schools did reach out to clarify that this was a one off, etc.) so they at least have an accurate picture of our 2020 finances, but the schools that require only the FAFSA will have to be clued in individually, and most won’t even talk to us (they say) until January or February.

DS is ED with a CSS school so I’m hoping that everything works out there and I can be done with it. The thought of negotiating with the rest of his schools on a one-by-one basis makes me want to curl up in the fetal position beneath my desk, truly.

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I did end up having a good experience (so far) with our correction (retirement rollover counted as income). We simply sent the 1099 R to one of the schools. They corrected the FAFSA and let us know our new EFC number and we received a notice from the U.S. Department of Education that the FAFSA has been updated by the financial aid staff at a school and all the schools have been notified of the correction. It doesn’t look like it is really going to make much a difference for us (our EFC is still 6 figures) but it may for others. If anyone else has retirement rollover problem it was an easy fix.

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I am still waiting for a school to provide a FA report, hopefully we will have the same experience when they calculate any possible FA. I have notified 2 schools but haven’t gotten any calculations yet.

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Thank you for all of your help so far! I’ve spoken to individual schools, but the one that I have been admitted to is saying that there’s no correction to be made because line 4a of my mother’s 1040 says 0 IRA distributions :frowning_face: To clarify, she definitely has an IRA rollover, she just hasn’t cashed out/distributed that money because she’s in her 40s. How can I prove that I have a rollover if the 1040 doesn’t reflect that? I have Fidelity statements that show I have a rollover, but I don’t know if that is sufficient (this school is saying that it is not)

I got the calculation from a school who said that they have fixed it - no aid and an EFC of $58k was reflected on my financial aid letter anyway :frowning:

@leela8244

If your mother had a rollover in the tax year used for the FAFSA you completed…this should have been indicated someplace on her taxes.

In addition, she should have paperwork from the original place the money was in, as well as the new place where it was rolled over to.

If this is for the 2022-2023 academic year, you need to be looking at your 2020 tax return. Is that when your mom did this rollover?

@BelknapPoint what am I missing?

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A distribution from an IRA would generate a 1099R to show money was removed from an IRA account. There would be a code to show what was done with it. A code “G” is a direct rollover and would not show on the 1040 return.

The problem is with 1099R that were generated before the CARES act was formally passed which would show a distribution on the 1099R as a Code 1. Early withdrawal without exception (subject to penalty). The CARES act, when passed, allowed for that money to be redeposited into a qualified account without any penalty within the following 3 years.

So, if there was a distribution that was coded as a “1” but that money was redeposited, the 1040 shows it as a distribution and the FAFSA would reflect it that way (if DRT was used). I have submitted copies of my deposit to an IRA and the 1099R showing a code 1 (rather than code G) and that is what I am trying to get the FA office to change.

The other 1099R code that would be used is Code 2, which indicates an exception, such as the CARES act, but you would have to show the money was redeposited to not have it count as income on the FAFSA.

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