<p>I am also shocked at our EFC. It is $33,000 per year. How do they think we can come up with that amount each year?? What are our chances of getting good/any financial aid from schools?</p>
<p>Well- EFC is not meant to be taken soley from income.
It is meant to be met by loans, savings and income.
I would suggest finding good financial safeties- instate public schools, private schools with merit awards, public schools with exchange agreements with your state.
We got a good package from older D's private school.
They met 100% of need ( many schools do not), and it was mostly a grant, although some was from self help, low interest subsidized loans and work study.
However- we had to pay FAFSA EFC.</p>
<p>If you aren't going to get into a school that has excellent financial aid (these schools tend to be the ones that are really really seclective) and you don't want to go to a school where your SATs and GPA are above the rest of the applicant pool (so you might get merit aid) you really don't have many options. I'm just hoping my kids can fall in love with an in-state public (ours are $17,000/yr tuition & room & board)</p>
<p>"EFC is not meant to be taken soley from income."</p>
<p>I think the EFC comes from whatever you've got :-). If you have savings and home equity, great, but the EFC calculation doesn't assume that everyone has savings; it just assesses what's there. Unfortunately lots of people who used to have home equity have seen it go way down or disappear. Last month (month!) home prices fell 15% in the San Francisco Bay Area.</p>
<p>I agree calreader! There is no equity in our home to pay the EFC of $33,000/per year. You would think they would have some way of determining an EFC with declining home values.</p>
<p>Calreader...our income is well less than $150,000 and our EFC is $45000 (total of both kids)....no savings, and this is FAFSA EFC. 4 in household, two parents working, two in college.</p>
<p>150k-200k is a lot of money. except at harvard or yale, don't expect much if any needbased financial aid. you should not act surprised. Schools use primarily the Profile; it is much more meticulous. congrats on your merit scholarship though</p>
<p>"There is no equity in our home to pay the EFC of $33,000/per year. You would think they would have some way of determining an EFC with declining home values."</p>
<p>Families are expected to use savings and loans to pay for their children's education. Home equity is a nice avenue from which to procure a loan but it is not the only way. People who live in rental property don't have a lower EFC because they can't procure a home equity loan so homeowners shouldn't have a lower EFC when their home doesn't have adequate equity against which to borrow for college costs.</p>
<p>Gotcha beat... our family had an income of about $54,000 in 2007, but our 2008-2009 EFC came in at $62,000. Why? Because we have saved diligently for sons' college education and son #1 has about $53,000 to his name going into his sophomore year. It will, of course be greatly reduced in subsequent years, and by then we expect the EFC to come in lower. But now, we admit that we do not deserve "need"-based aid and am not surprised by the calculation.</p>
<p>archiemom, I hope you don't have the money in your son's name. Kids assets are hit at a much higher rate than parental assets. that sounds like a really high EFC on 54K of income. A big portion of that EFC is coming from your assets. probably only about 12-15K from income.</p>
<p>as far as home value goes- I doubt if they update enough to mimic every rise and fall.
For example- housing in the urban area of our state is much more expensive than the rural areas- yet cost of living allowance is the same for the state- doesn't matter if you live in a 2 bedroom that is assessed at $500,000 or a 5 bedroom on 4 acres that is assessed at $400,000.</p>
<p>If your income is almost $200,000 a year- whether or not you have equity, it is going to be assumed that you have the ability to access loans- on top of what you are going to be expected to pay out of income.</p>
<p>Oh- I don't think this has been mentioned- if you put in $10,000 every year ( dreaming) into a retirement account, what you put in the year before last- will not be touched, however, what you put in * last year* will be expected to be available, for students beginning college this fall.</p>
<p>Sue: Unfortunately we didn't discover that fact until we were well on our way with the college savings program, so yeah, the $53,000 is in his name. It's kind of amazing how much investments will appreciate over 18 years. For the last 8 years or so, we've been saving in our name, and son #2's college accounts are mostly in our name.</p>
<p>No matter cause all the money is going toward college expenses. We're not expecting others to finance our kids' education.</p>
<p>And we do have other (modest) investments; have to since my husband is self-employed and the only retirement savings we'll have is what we've put aside.</p>
<p>The self employed really get bit- because assets look more liquid than they are apparently ( from reading CC)
Same with retirement- I am not sure if that is protected as if when you have a company pension or IRA.
Of course lots of people I know that are self employed don't have medical insurance either- so you could say they are used to getting the fuzzy end of lollipop?</p>
<p>It looks like for the 2009-2010 school year you can move $ in kid's name to a 529 owned by the kid and it will be assessed for FA purposes at the same rate as a parental asset. That seems really easy so maybe there is more to it...</p>
<p>Even for the self-employed, retirement savings are not reported on the FAFSA, if they are held in certain types of SEPs and IRAs. The problem is that there are limits on annual contributions that seem to be lower than contribution limits for 401(k)s. So some "retirement" savings end up looking like regular investments available for college spending (which I guess they are).</p>
<p>I like the idea of moving kid's money to a 529, because in CT we can also get a tax credit for money in 529s. I'll be looking into that for son#2's savings. Thanks.</p>
<p>Muffy, it's even better than that. According to FinAid, custodial accounts in a 529 plan aren't counted at all right now, because of an oversight in the language of the law. Probably this will get fixed, but who knows when or how. (Just realized that your comment was about the 2009-10 year - if you have a pointer to how the law is being fixed, could you please post it? Thanks.)</p>
<p>archiemom, you have to move kid's money to 529 owned by kid, not to a 529 owned by you. I don't know what tax breaks are in Ct but I think it would be the kid's tax break if kid made the contribution, not yours.</p>
<p>Calreader, yes, you are correct about custodial 529s this year not being counted because of loophole. Here's a reliable link; you have to scroll near the bottom of the page to find the part about 2009-2010 law.</p>
<p>FinAid</a> | Saving for College | Tax Savings from Child Asset Ownership</p>
<p>Yes, of course...his 529, his tax break. But with the investment income, both kids are paying income taxes already.</p>
<p>This would be the #1 piece of info I wish I had had before beginning the financial aid process last year.</p>
<p>Thanks, Muffy. I had read about this issue on another FinAid page that doesn't go into as much detail.</p>
<p>Archiemom - it seems like it might still be worth it to move the kids' money into a 529 while they're in college, since the earnings would then be tax-free as long as they use the money for educational expenses.</p>
<p>I make less than 60k but my EFC for one child was $36. For two it was split at 16 and 18. It is based on your assets. Most assets are NOT in their names either. </p>
<p>I can live with FAFSA numbers. CSS numbers on the other hand destroy us. We have to factor in ex hubby, who makes an obscene amount of money, yet is not contributing to college.</p>