<p>Say the EFC is 40,000 (based on student having a lot of assets, but low-income parents). The student picks a college where merit scholarships are not given out and the tuition is 35,000/year. They will get no financial aid in that situation, correct, since tuition is less than EFC?</p>
<p>So here comes the 2nd year and you go to file the FAFSA. The student asset is much less now that 35,000 has been burned through. Does the EFC lower along with that change, and get to the point where maybe some financial aid that is need-based kicks in, since the student assets are being depleted rapidly (without any more income source). I imagine by the years 3 and 4 this could have chanced drastically from the beginning EFC. Am I thinking about this correctly?</p>
<p>I will be interested to hear others' response to this, but in the case of 2 of my son's friends, I can tell you that the school averaged the value of their (students') assets over 4 years, and so each year 1/4 of those assets were presumed to be available to pay for college. The rest of their aid was based on that, along with the usual issues of family income and assets. I'm sure school policies vary however.</p>
<p>I've never heard of this happening, but do not doubt that it could happen. Schools can do what they want with the info. That is something that a lot of families do not get. The EFC is just for qualification for government aid; it does not require the schools to accept it and schools use that number and the info on FAFSA and PROFILE as they please. You have to check with individual schools as to how certain specifics are handled to be safe. </p>
<p>I would be spending down that student account right now if 2008 is the year that is going to be on the FAFSA/PROFILE.</p>
<p>However, you still will need to file the FAFSA each year, and since the assets will change (lower) after the first year, perhaps the FA package will change as well.</p>
<p>Well..first...when the school is computing your EFC, the student assets will be assessed at a %age of the amount...not the whole thing. So....if your student has $35K in the bank, that whole amount will not be included the first year (of course your family could use it all up the first year paying the bills but that would be a family decision).</p>