FAFSA EFC number shock! [Expected Family Contribution]

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chipperd
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FAFSA EFC number shock! [Expected Family Contribution]

Post by chipperd » Fri Nov 10, 2017 4:38 pm

Hello,
Just submitted FAFSA for child #1, with numbers 2 and 3 both also in high school. I can't believe that our FAFSA EFC number is $39,000!. This with an AGI of 122k in 2016. I was thinking it should be around 25k and the "real cost calculators" for schools that don't take into account merit aid money all come in between 22-32 k (MIT, UCONN, Northeastern, Bucknell, Lehigh, Cornell, Duke, UVA, UVT, Syracuse). Does this sound right to you all?
Thanks for the feedback,
Chipperd

DanMahowny
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Re: FAFSA EFC number shock!

Post by DanMahowny » Fri Nov 10, 2017 4:50 pm

My EFC is expected to be around $43k. I'm not going to bother filling out the FAFSA. I don't want to provide the details of my financial situation when there is no benefit. Many people tell me, "fill out the FAFSA, you'll probably get something." They are wrong, indeed.

My high school senior will attend a local community college for 2 yrs then transfer to State U, or elsewhere. He is a good student but doesn't have the academic credentials to receive any significant merit aid.

Jack FFR1846
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Re: FAFSA EFC number shock!

Post by Jack FFR1846 » Fri Nov 10, 2017 4:59 pm

Son #1 is in his 4th year. With an AGI of barely over $100k, I'm used to getting zip towards $65k.
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Tycoon
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Re: FAFSA EFC number shock!

Post by Tycoon » Fri Nov 10, 2017 5:06 pm

Yep, that looks about right.
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bcc1234
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Re: FAFSA EFC number shock!

Post by bcc1234 » Fri Nov 10, 2017 5:14 pm

Some schools require you fill it out. Both our sons went to small private schools and both received some academic grant money. BOTH schools required the FAFSA before the Grant money was credited each year. It got more depressing each year I filled it out.

WalterMitty
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Re: FAFSA EFC number shock!

Post by WalterMitty » Fri Nov 10, 2017 5:23 pm

chipperd wrote:
Fri Nov 10, 2017 4:38 pm
Hello,
Just submitted FAFSA for child #1, with numbers 2 and 3 both also in high school. I can't believe that our FAFSA EFC number is $39,000!. This with an AGI of 122k in 2016. I was thinking it should be around 25k and the "real cost calculators" for schools that don't take into account merit aid money all come in between 22-32 k (MIT, UCONN, Northeastern, Bucknell, Lehigh, Cornell, Duke, UVA, UVT, Syracuse). Does this sound right to you all?
Thanks for the feedback,
Chipperd
Yup.

My oldest is currently a sophomore, so I have gone through the FAFSA process two times now. Now FAFSA season is already upon us for the 2018/2019 school year. The EFC (expected family contribution) numbers have shocked many a parent who go through the trouble of completing FAFSA. I haven't seen a table, but from some googling, it seems like if you make $40-60,000 EFC might be around 25% of income, above $80,000 then maybe it goes to 33%. So yes, many are shocked to find out that someone assumes 25% of your current income or more is expected. I got an inkling of this when friends of ours who had older children announced to me "we're rich! or at least so says FAFSA" and the college of their kids choice as they were shocked to find out that they qualified for zero help.

What galls me even more is that FAFSA refers to their results as "Awards & Scholarships" or something like that...only for you to find out that your "award" is that you can get a loan for the full amount of the cost of attendance if you so desire.

I'm still debating if I even fill it out this year.

sailaway
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Re: FAFSA EFC number shock!

Post by sailaway » Fri Nov 10, 2017 5:40 pm

As has been pointed out, even academic grants provided within the school may require you to fill out the FAFSA. My family wasn't eligible for anything, except the loans my parents refused to get. Nonetheless, I nickeled and dimed my way to free tuition a few years by gathering in scholarships/grants that were each 10-20% of the total tuition. Often, only a handful of students apply for many of these small grants from departments and programs, so those who do have a great chance of getting something.

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Re: FAFSA EFC number shock!

Post by Grt2bOutdoors » Fri Nov 10, 2017 5:59 pm

Am not surprised, my neighbor filled it out even though knew they would get zero help. Sure enough, EFC said 99,999+. :shock:
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chipperd
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Re: FAFSA EFC number shock!

Post by chipperd » Sat Nov 11, 2017 4:25 am

Thanks for the feedback. Just trying to get my head around the idea of paying 1/3 of AGI annually for 12-15 years. Hopefully, merit aid/private scholarships will help out. State school at 29k/year all in at the state starting to look really good.

akron1977
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Re: FAFSA EFC number shock!

Post by akron1977 » Sat Nov 11, 2017 5:22 pm

Back when I was filing FAFSA annually (13 years in a row!) I investigated the formula for determining EFC. After a certain "floor" income, based on family size/age of parents/number in college, the highest marginal rate on income was 47%!! Almost made the tax rates look reasonable..........

Boogieknight
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Re: FAFSA EFC number shock!

Post by Boogieknight » Sat Nov 11, 2017 5:36 pm

I have some experience with this. My second (and last) daughter went to Carnegie Mellon for four years, graduated last May. Neuroscience.... :-)

1) Don't complain about the FAFSA. Some schools require the CSS Profile in addition to the FAFSA. It makes the FAFSA look like the 1040 EZ.

2) More importantly, no matter what they offer, ask for more. Make up some kind of malarkey. When my first got out of college, leaving the CMU daughter by herself, my EFC went to $0. Both years they offered $0. I pointed out "peculiar" stuff that made it "difficult" to pay $65K a year, and both years ended up getting about $30,000 in needs-based aid. Schools like CMU don't offer academic aid. So you have to point out why the aid applications and the computers overestimate your ability to pay. Saved me a TON of money.

Good luck....

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celia
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Re: FAFSA EFC number shock!

Post by celia » Sat Nov 11, 2017 5:42 pm

chipperd wrote:
Fri Nov 10, 2017 4:38 pm
Just submitted FAFSA for child #1, with numbers 2 and 3 both also in high school. I can't believe that our FAFSA EFC number is $39,000!. This with an AGI of 122k in 2016.
It is not just your income that is considered, but also your taxable savings (maybe even some tax-deferred ones too, since you didn't have to defer so much with college coming up). There are also ways to decrease your AGI and your savings. The student's income and savings is also expected to be used for college. So plan on using that up along with your money. (That's why it is called "family" contribution.)

Did you know that if you have multiple kids in college at the same time, the EFC is still the same and is divided among each student (assuming none of them go to a "free" school or get lots of scholarships).

The FAFSA may also be required at some colleges in order to get a campus job.

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MikeWillRetire
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Re: FAFSA EFC number shock!

Post by MikeWillRetire » Sat Nov 11, 2017 5:48 pm

With that AGI, you are somewhere in the top 15%.
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teen persuasion
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Re: FAFSA EFC number shock!

Post by teen persuasion » Sat Nov 11, 2017 6:40 pm

EFC Formulas: https://ifap.ed.gov/efcformulaguide/att ... de1819.pdf

Using a little reverse engineering, you probably have ~$325k in taxable savings, or put $36k in traditional 401k accounts in addition to the $122k AGI mentioned, or some combination of both, to get to that $39k EFC. In the eyes of the school, you could shift current 401k contributions to college expenses, or use 12% of taxable assets. The other $3k is nearly covered by the AOTC ($2500 tax credit).

Run thru the FAFSA calculations to see what affects your EFC the most, and how you can possibly nudge it in the future. Use the link below for the paper FAFSA, for the inputs to the first link (e.g., line 94a-i).

https://fafsa.ed.gov/fotw1819/pdf/PdfFafsa18-19.pdf

user5027
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Re: FAFSA EFC number shock!

Post by user5027 » Sat Nov 11, 2017 7:16 pm

It has been ten years since we filled out the FAFSA. For three years we had two in college. The EFC gets divided by the number of family members in college. That helped for those three years.

cherijoh
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Re: FAFSA EFC number shock!

Post by cherijoh » Sat Nov 11, 2017 7:44 pm

DanMahowny wrote:
Fri Nov 10, 2017 4:50 pm
My EFC is expected to be around $43k. I'm not going to bother filling out the FAFSA. I don't want to provide the details of my financial situation when there is no benefit. Many people tell me, "fill out the FAFSA, you'll probably get something." They are wrong, indeed.

My high school senior will attend a local community college for 2 yrs then transfer to State U, or elsewhere. He is a good student but doesn't have the academic credentials to receive any significant merit aid.
Smart move! Especially if he isn't exactly sure what he wants to do in the future.

Sometimes I think parents don't analyze whether it makes sense to shell out the big bucks for a "prestigious" university vs. the state U or community college. I had high school friends who went to pricey out-of-state universities and majored in liberal arts, journalism, political science, etc., while I went to the state U and went into a STEM field. I was the only one who had a job in hand when I graduated and some of them have suffered from underemployment and job instability over the years.

This was back before college tuition got totally outrageous and there were still scholarships and grants - not just loans. But still I wonder about the value proposition of paying $$$ when the end result is a college degree which doesn't even yield a career path and an adequate working wage.

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Re: FAFSA EFC number shock!

Post by goodenyou » Sat Nov 11, 2017 7:50 pm

Grt2bOutdoors wrote:
Fri Nov 10, 2017 5:59 pm
Am not surprised, my neighbor filled it out even though knew they would get zero help. Sure enough, EFC said 99,999+. :shock:
The good news is that.... all-in it's only about $70k for most private schools. I didn't even fill it out.
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chipperd
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Re: FAFSA EFC number shock!

Post by chipperd » Sun Nov 12, 2017 7:30 am

Hello again,
Again, thanks so much to all for taking the time to offer feedback and advise. Some proposed some reasons for the 39k/year EFC number that included some assumptions, so allow me to share some more financial details to eliminate some educated guesswork.
Dad is 50 years old with w-2 gross income of 35k w-2 and gross 50k 1099 income in 2016. Mom is 47 with w-2 income of 42k and pension income of 23k in 2016. Combined non-taxable savings and investments: 18k. Tax-deductible retirement savings for the tax year 2016 (year used on FAFSA): 16k in 457 plan and $9500 in SEP. Combined AGI: 122k. Student savings: 1k. Student earnings that tax year: $550.
Thanks again for all the responses.

dbr
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Re: FAFSA EFC number shock!

Post by dbr » Sun Nov 12, 2017 9:48 am

A view is that you have a large enough total family income to afford to pay for college for your children. If you would like to reduce this cost the options are to seek out cheaper schools such as the local state university or even starting the first two years at a community college. It is also possible to ask the kids to work. As a last resort student loans are an option. The FAFSA takes large account of having more than one student in school at the same time.

It is arguable that people like you with upper middle class incomes are in the "rip-off" area of college costs where you pay closest to "list" price without discounts that a lot of people get but are sufficiently not wealthy that this cost is burdensome.

Jack FFR1846
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Re: FAFSA EFC number shock!

Post by Jack FFR1846 » Sun Nov 12, 2017 10:00 am

Don't feel bad, however. Say that your EFC was $10k and the college cost $40k. Freshman year, assume unsubsidized Stafford loans first. So there's 6% interest with a 1.073% up front payment. Then there are parent loans at perhaps 7%. Then you'll be offered college private loans at 7%. Then you're on your own to find other private loans. Figure again 7%.

I can take loans on my 4 vehicles at 2.24%. I could use my HELOC to pay some more. I don't remember the rate but it's likely lower than the Staffords.

So my point is that although some people get "aid", they may not actually get aid.
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Info_Hound
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Re: FAFSA EFC number shock!

Post by Info_Hound » Sun Nov 12, 2017 11:08 am

OP - welcome to the club. :(

As others have stated, do not expect much help from FAFSA. Daughter looked at a couple of colleges on your list and the financial help was close to nil. I agree that a loan is not an award, even if FAFSA wants to call it an award.

She ended up going to a well regarded State college that offered her a generous merit scholarship for each year she attended. BTW - one of the conditions of the scholarship was that a FAFSA was filed each year, even though we got no help from FAFSA. Between the college scholarship and funds we had saved, she graduated debt free. That was her graduation gift.

Wish you the best of luck chasing down scholarships, you will have better luck with them than with FAFSA.

teen persuasion
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Re: FAFSA EFC number shock!

Post by teen persuasion » Sun Nov 12, 2017 12:26 pm

chipperd wrote:
Sun Nov 12, 2017 7:30 am
Hello again,
Again, thanks so much to all for taking the time to offer feedback and advise. Some proposed some reasons for the 39k/year EFC number that included some assumptions, so allow me to share some more financial details to eliminate some educated guesswork.
Dad is 50 years old with w-2 gross income of 35k w-2 and gross 50k 1099 income in 2016. Mom is 47 with w-2 income of 42k and pension income of 23k in 2016. Combined non-taxable savings and investments: 18k. Tax-deductible retirement savings for the tax year 2016 (year used on FAFSA): 16k in 457 plan and $9500 in SEP. Combined AGI: 122k. Student savings: 1k. Student earnings that tax year: $550.
Thanks again for all the responses.
More details help.

Good news: your taxable assets aren't driving up the EFC. The asset protection amount for married 50 yo parent is $22300, which is greater than $18k. Any savings, checking, EF accounts? They are also included in available assets.

Your state matters - there's a state tax % applied to your income total, as a proxy for state income, sales, property taxes. The % varies from 1 to 10%. This is subtracted from available income, so higher is better. The table is in the FAFSA formulas pdf.

They also subtract your federal taxes paid, and FICA paid. You don't report FICA directly on the FAFSA, they compute it from reported "wages earned from work" for each parent. This question can be deceptive, since the form is not clear that this should be gross wages reported; it mentions you may find the number on your W2 (which definition of "wages"?) or use line 7 + 12 +18 on the 1040. If you contribute to retirement accounts, line 7 is NOT = FICA wages. The online FAFSA often gives me warnings that the wages earned # doesn't match 1040 #s, but if they are using it to compute FICA paid (rather than asking directly) I am going to make sure it is computed correctly.

Trying to recompute an EFC for your new info (using mid range 5% for state and simple fed tax on $122k MFJ +5 exemptions) I only reach EFC of $33k. You should use the FAFSA formulas pdf with your actual numbers to see what you get (start on page 9). If you have inadvertently entered incorrect figures on your application, you can correct them and resubmit.

A dependent student can earn up to $6570 before it is included in the EFC. Actually, a bit more - federal tax owed, FICA paid, and a state tax % are all deducted first. As for student savings, none is protected, and 20% is included in the EFC.

chipperd
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Re: FAFSA EFC number shock!

Post by chipperd » Sun Nov 12, 2017 5:16 pm

teen persuasion wrote:
Sun Nov 12, 2017 12:26 pm
chipperd wrote:
Sun Nov 12, 2017 7:30 am
Hello again,
Again, thanks so much to all for taking the time to offer feedback and advise. Some proposed some reasons for the 39k/year EFC number that included some assumptions, so allow me to share some more financial details to eliminate some educated guesswork.
Dad is 50 years old with w-2 gross income of 35k w-2 and gross 50k 1099 income in 2016. Mom is 47 with w-2 income of 42k and pension income of 23k in 2016. Combined non-taxable savings and investments: 18k. Tax-deductible retirement savings for the tax year 2016 (year used on FAFSA): 16k in 457 plan and $9500 in SEP. Combined AGI: 122k. Student savings: 1k. Student earnings that tax year: $550.
Thanks again for all the responses.
More details help.

Good news: your taxable assets aren't driving up the EFC. The asset protection amount for married 50 yo parent is $22300, which is greater than $18k. Any savings, checking, EF accounts? They are also included in available assets.

Your state matters - there's a state tax % applied to your income total, as a proxy for state income, sales, property taxes. The % varies from 1 to 10%. This is subtracted from available income, so higher is better. The table is in the FAFSA formulas pdf.

They also subtract your federal taxes paid, and FICA paid. You don't report FICA directly on the FAFSA, they compute it from reported "wages earned from work" for each parent. This question can be deceptive, since the form is not clear that this should be gross wages reported; it mentions you may find the number on your W2 (which definition of "wages"?) or use line 7 + 12 +18 on the 1040. If you contribute to retirement accounts, line 7 is NOT = FICA wages. The online FAFSA often gives me warnings that the wages earned # doesn't match 1040 #s, but if they are using it to compute FICA paid (rather than asking directly) I am going to make sure it is computed correctly.

Trying to recompute an EFC for your new info (using mid range 5% for state and simple fed tax on $122k MFJ +5 exemptions) I only reach EFC of $33k. You should use the FAFSA formulas pdf with your actual numbers to see what you get (start on page 9). If you have inadvertently entered incorrect figures on your application, you can correct them and resubmit.

A dependent student can earn up to $6570 before it is included in the EFC. Actually, a bit more - federal tax owed, FICA paid, and a state tax % are all deducted first. As for student savings, none is protected, and 20% is included in the EFC.
Thanks for the info. I was also thinking our EFC should be in the lower 30's. Is this the link to the FAFSA you were referring me to? https://fafsa.ed.gov/fotw1819/pdf/PdfFafsa18-19.pdf
Thanks again. I will redo by hand if this is the accurate form.
Chipperd

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Re: FAFSA EFC number shock!

Post by White Coat Investor » Sun Nov 12, 2017 5:23 pm

chipperd wrote:
Fri Nov 10, 2017 4:38 pm
Hello,
Just submitted FAFSA for child #1, with numbers 2 and 3 both also in high school. I can't believe that our FAFSA EFC number is $39,000!. This with an AGI of 122k in 2016. I was thinking it should be around 25k and the "real cost calculators" for schools that don't take into account merit aid money all come in between 22-32 k (MIT, UCONN, Northeastern, Bucknell, Lehigh, Cornell, Duke, UVA, UVT, Syracuse). Does this sound right to you all?
Thanks for the feedback,
Chipperd
I'm amazed how many people have no idea how the FAFSA calculation works. As a general rule, your EFC is about 30% of your income and 6% of your assets. Income matters much more than assets, and it doesn't take all that much income to have an EFC much higher than the cost of attendance.

Most physicians and others with similar income should not expect their children to qualify for any need-based financial aid. But even those with 6 figure but not "physician-like" incomes get caught up in it as you can see, especially if the school isn't particularly expensive.
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Re: FAFSA EFC number shock!

Post by White Coat Investor » Sun Nov 12, 2017 5:28 pm

chipperd wrote:
Sat Nov 11, 2017 4:25 am
Thanks for the feedback. Just trying to get my head around the idea of paying 1/3 of AGI annually for 12-15 years. Hopefully, merit aid/private scholarships will help out. State school at 29k/year all in at the state starting to look really good.
Alternatively, you could send your children to colleges that you and they can afford.

Undergraduate schools that charge $30-60K a year in tuition are for rich people and those who get big scholarship offers. I have no idea why so many middle class and upper middle class Americans with typical kids think those schools are for their kids. They're not.

I've written before about four pillars of paying for your kids' college:

# 1 School selection
# 2 College savings
# 3 The kids' contribution (savings, summer work, in-school work)
# 4 The parents' cash flow

Notice there isn't one listed "debt." There's no reason to take out debt for undergraduate work in my view. But by far the most important one of those pillars is the first one. Very few undergraduate degrees are a good investment if the cost is a 6 figure debt. Why would you pay $50K when a comparable education can be found for $5-15K somewhere else? It boggles the mind how we pay so much attention to cost in every other area of our life but then ignore it when it comes to education.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

chipperd
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Re: FAFSA EFC number shock!

Post by chipperd » Sun Nov 12, 2017 6:23 pm

White Coat Investor wrote:
Sun Nov 12, 2017 5:28 pm
chipperd wrote:
Sat Nov 11, 2017 4:25 am
Thanks for the feedback. Just trying to get my head around the idea of paying 1/3 of AGI annually for 12-15 years. Hopefully, merit aid/private scholarships will help out. State school at 29k/year all in at the state starting to look really good.
Alternatively, you could send your children to colleges that you and they can afford.

Undergraduate schools that charge $30-60K a year in tuition are for rich people and those who get big scholarship offers. I have no idea why so many middle class and upper middle class Americans with typical kids think those schools are for their kids. They're not.

I've written before about four pillars of paying for your kids' college:

# 1 School selection
# 2 College savings
# 3 The kids' contribution (savings, summer work, in-school work)
# 4 The parents' cash flow

Notice there isn't one listed "debt." There's no reason to take out debt for undergraduate work in my view. But by far the most important one of those pillars is the first one. Very few undergraduate degrees are a good investment if the cost is a 6 figure debt. Why would you pay $50K when a comparable education can be found for $5-15K somewhere else? It boggles the mind how we pay so much attention to cost in every other area of our life but then ignore it when it comes to education.
To answer your statement as to why you have no idea upper middle class Americans .... B/c we have a kid with a high GPA (4.8/5 and 3.98/4) with a 35 ACT score, we are thinking merit money. Assuming merit money comes off the cost of college, and those colleges use the EFC in their calculation (along with the CSS profile) to determine the baseline we as a family will be charged before merit money, it becomes important to us for this student. You seem to know this already, but 20k merit scholarship off full sticker price of 60k/year is much different from 20k merit scholarship off a reduced 33k per year due in part to an accurate EFC number means it matters to this family.

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Re: FAFSA EFC number shock!

Post by White Coat Investor » Sun Nov 12, 2017 8:35 pm

chipperd wrote:
Sun Nov 12, 2017 6:23 pm
White Coat Investor wrote:
Sun Nov 12, 2017 5:28 pm
chipperd wrote:
Sat Nov 11, 2017 4:25 am
Thanks for the feedback. Just trying to get my head around the idea of paying 1/3 of AGI annually for 12-15 years. Hopefully, merit aid/private scholarships will help out. State school at 29k/year all in at the state starting to look really good.
Alternatively, you could send your children to colleges that you and they can afford.

Undergraduate schools that charge $30-60K a year in tuition are for rich people and those who get big scholarship offers. I have no idea why so many middle class and upper middle class Americans with typical kids think those schools are for their kids. They're not.

I've written before about four pillars of paying for your kids' college:

# 1 School selection
# 2 College savings
# 3 The kids' contribution (savings, summer work, in-school work)
# 4 The parents' cash flow

Notice there isn't one listed "debt." There's no reason to take out debt for undergraduate work in my view. But by far the most important one of those pillars is the first one. Very few undergraduate degrees are a good investment if the cost is a 6 figure debt. Why would you pay $50K when a comparable education can be found for $5-15K somewhere else? It boggles the mind how we pay so much attention to cost in every other area of our life but then ignore it when it comes to education.
To answer your statement as to why you have no idea upper middle class Americans .... B/c we have a kid with a high GPA (4.8/5 and 3.98/4) with a 35 ACT score, we are thinking merit money. Assuming merit money comes off the cost of college, and those colleges use the EFC in their calculation (along with the CSS profile) to determine the baseline we as a family will be charged before merit money, it becomes important to us for this student. You seem to know this already, but 20k merit scholarship off full sticker price of 60k/year is much different from 20k merit scholarship off a reduced 33k per year due in part to an accurate EFC number means it matters to this family.
I'm all for merit scholarships. I'm all for need-based grants and scholarships. Not really for loans though, which is most of what need-based aid turns out to be.

With those sorts of academic credentials, why would you send your kid anywhere that he/she wasn't getting at least a full tuition scholarship if not a full ride? Who cares about need-based aid at that point?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

teen persuasion
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Re: FAFSA EFC number shock!

Post by teen persuasion » Sun Nov 12, 2017 10:15 pm

chipperd wrote:
Sun Nov 12, 2017 6:23 pm
White Coat Investor wrote:
Sun Nov 12, 2017 5:28 pm
chipperd wrote:
Sat Nov 11, 2017 4:25 am
Thanks for the feedback. Just trying to get my head around the idea of paying 1/3 of AGI annually for 12-15 years. Hopefully, merit aid/private scholarships will help out. State school at 29k/year all in at the state starting to look really good.
Alternatively, you could send your children to colleges that you and they can afford.

Undergraduate schools that charge $30-60K a year in tuition are for rich people and those who get big scholarship offers. I have no idea why so many middle class and upper middle class Americans with typical kids think those schools are for their kids. They're not.

I've written before about four pillars of paying for your kids' college:

# 1 School selection
# 2 College savings
# 3 The kids' contribution (savings, summer work, in-school work)
# 4 The parents' cash flow

Notice there isn't one listed "debt." There's no reason to take out debt for undergraduate work in my view. But by far the most important one of those pillars is the first one. Very few undergraduate degrees are a good investment if the cost is a 6 figure debt. Why would you pay $50K when a comparable education can be found for $5-15K somewhere else? It boggles the mind how we pay so much attention to cost in every other area of our life but then ignore it when it comes to education.
To answer your statement as to why you have no idea upper middle class Americans .... B/c we have a kid with a high GPA (4.8/5 and 3.98/4) with a 35 ACT score, we are thinking merit money. Assuming merit money comes off the cost of college, and those colleges use the EFC in their calculation (along with the CSS profile) to determine the baseline we as a family will be charged before merit money, it becomes important to us for this student. You seem to know this already, but 20k merit scholarship off full sticker price of 60k/year is much different from 20k merit scholarship off a reduced 33k per year due in part to an accurate EFC number means it matters to this family.
Sorry, it doesn't work this way. Merit or academic awards aren't outside of the FAFSA EFC, they are a part of it. That's why many schools require you to file the FAFSA even for merit/academic scholarships.

My general view of the hierarchy of aid awarded: subsidized loans, unsubsidized loans, work study, federal grants like PELL, state grants like TAP, merit/academic scholarships, need-based school grants. You will always be offered loans first. If you are eligible for fed/state grants (your EFC is < max grant amount), you may get some/most/all of these, if there is enough $ available. If you earned a merit/academic scholarship, it is awarded here. The scholarship may be reduced by any other grants received (like TAP and PELL - my full tuition scholarship was reduced by any TAP I was eligible for, so I was required to apply for TAP). If you have reached your need level, there is likely no need based grants for you.

Even if you have unmet need, a school may choose not to meet your need, termed gapping you. My DD1 had EFC=0, yet her first choice school gapped her 50% of our family AGI. She appealed, but they only offered parent loans, and suggested she'd be happier elsewhere. She was very happy at her second choice, who fully met her need (and we were happier too, as it was closer to home for much easier transportation).

Our DS2 successfully petitioned for a larger financial aid package at his first choice school, using a slightly better offer from school #2. He contacted #1, explained he'd prefer to attend there, but the better offer from #2 might tip the scales. Could they match the offer? They asked us to fax the competitor's offer to them, and they beat it!

So apply to multiple schools to increase the odds of receiving merit/academic scholarships at a school that is trying to entice you to attend there. Competing offers may be able to be leveraged. Each school is different in how it awards aid and scholarships, and how it charges for things. Some include nearly everything in one bill, others have dozens of little fees (which are not tuition). Some have flexibility in housing and food costs, others are one size fits all. Some require on campus housing, others do not. Some are less expensive at first glance, but others may be less expensive after more generous aid.

Local incentives may affect costs, too. My state just began offering "free tuition" at state schools. Sounds great in theory, but the devil's in the details, and there's a lot of gotchas. Neither DD3 nor DS4, at 2 different state schools, qualify for free tuition under this program. Of course, tuition is only about a quarter of the annual cost - fees are high, and R&B is higher still. In an interesting twist, a rival private college recently rolled back prices by 27%, hoping to reverse their declining enrollment due to the "free tuition" shift to state Universities. Still waiting to see if this pushes other private schools locally to follow suit, now that they look more expensive.

marcopolo
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Re: FAFSA EFC number shock!

Post by marcopolo » Sun Nov 12, 2017 10:54 pm

teen persuasion wrote:
Sun Nov 12, 2017 10:15 pm

Sorry, it doesn't work this way. Merit or academic awards aren't outside of the FAFSA EFC, they are a part of it. That's why many schools require you to file the FAFSA even for merit/academic scholarships.
That has not been my experience at all. Merit scholarships are often used as recruiting tools, and don't consider need.

The top tier schools (Ivies, MIT, Stanford, etc.) do not give merit scholarships because they do not need to do that to attract the best students.
Many schools below that tier give merit scholarships to attract students that have better credentials than their typical students.

When my son was applying to schools a couple years ago, we never filled out FAFSA (no hope of getting need based-aid), but he still got several merit offers from "flagship" state schools. Many schools even have fixed amounts of merit aid (up to full tuition) they give to ANY student meeting certain academic targets, no FAFSA required.
Once in a while you get shown the light, in the strangest of places if you look at it right.

masteraleph
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Re: FAFSA EFC number shock!

Post by masteraleph » Mon Nov 13, 2017 12:07 am

marcopolo wrote:
Sun Nov 12, 2017 10:54 pm

When my son was applying to schools a couple years ago, we never filled out FAFSA (no hope of getting need based-aid), but he still got several merit offers from "flagship" state schools. Many schools even have fixed amounts of merit aid (up to full tuition) they give to ANY student meeting certain academic targets, no FAFSA required.
Did your son end up going to one of those schools and receiving the merit aid? Because a lot of universities still require you to fill out the FAFSA in order to get merit aid. Heck, my wife had to fill out the FAFSA to receive her PhD fellowship. A lot of schools run all of their funding through the same system, and while they might offer you the aid without filling out the FAFSA, you have to fill it out to actually receive the aid.

JCE66
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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by JCE66 » Mon Nov 13, 2017 7:56 am

chipperd...My congratulations on getting a child to the point of secondary education. It has been a long trip. I know. It is not over yet.

I have two children. Child #1 went to Drexel, and got a 2/3rds ride. It was a combined BS/MS in Biomediacal Engineering. We had to do the FAFSA and CSS. Interestingly enough, he was accepted at TCNJ (highly competitive state school) and the total cost would have been higher (even with in-state rates), and no MS. He had a job coming out of DU and is well on his way. He borrowed ~40K over 5 years (we are helping him pay that - we pay off the highest interest loans, and he pays over agreed timeframes, usually six months, at no interest - we use our HELOC with an ultra low interest rate and eat the interest for 6 months). One other thing....child #1 commuted for 5 years by train to DU. That was huge.

Child #2 is a different story. Not like child #1 at all. This one, we insisted go to community college to figure out what interested him. We are financing 100% of this one, and we don't bother with FAFSA anymore. We plunk down our Fidelity Visa card, pay off tuition in one shot (with 2% going to my Roth) and we're done. It may be that child #2 gets an AAS in Biology, and then join the Navy. Child #2 is trying to find his way. It is frustrating.

The bigger point: Adapt your strategy by your child. You know them best, having studied them for many years now. In many instances, private schools offer a better total package. What matters here is a useful degree (recommend STEM), and LOW DEBT.

The best advice I can give you: Remember that getting your child into a college is quite easy. Getting the child out of that college on time, with a useful degree, ans low debt is much, much tougher. That is the conversation I would recommend having with your children.

NotWhoYouThink
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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by NotWhoYouThink » Mon Nov 13, 2017 8:15 am

There have been many claims that "many" schools require you to fill out FAFSA in order to qualify for merit scholarships. There are "some", but "many" is probably overstating the matter. In all cases, if a school requires FAFSA data to qualify for merit aid, that information will be on the website, so that if your student does not apply to those schools you don't need to fill out FAFSA.

chipperd
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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by chipperd » Mon Nov 13, 2017 4:30 pm

JCE66 wrote:
Mon Nov 13, 2017 7:56 am
chipperd...My congratulations on getting a child to the point of secondary education. It has been a long trip. I know. It is not over yet.

I have two children. Child #1 went to Drexel, and got a 2/3rds ride. It was a combined BS/MS in Biomediacal Engineering. We had to do the FAFSA and CSS. Interestingly enough, he was accepted at TCNJ (highly competitive state school) and the total cost would have been higher (even with in-state rates), and no MS. He had a job coming out of DU and is well on his way. He borrowed ~40K over 5 years (we are helping him pay that - we pay off the highest interest loans, and he pays over agreed timeframes, usually six months, at no interest - we use our HELOC with an ultra low interest rate and eat the interest for 6 months). One other thing....child #1 commuted for 5 years by train to DU. That was huge.

Child #2 is a different story. Not like child #1 at all. This one, we insisted go to community college to figure out what interested him. We are financing 100% of this one, and we don't bother with FAFSA anymore. We plunk down our Fidelity Visa card, pay off tuition in one shot (with 2% going to my Roth) and we're done. It may be that child #2 gets an AAS in Biology, and then join the Navy. Child #2 is trying to find his way. It is frustrating.

The bigger point: Adapt your strategy by your child. You know them best, having studied them for many years now. In many instances, private schools offer a better total package. What matters here is a useful degree (recommend STEM), and LOW DEBT.

The best advice I can give you: Remember that getting your child into a college is quite easy. Getting the child out of that college on time, with a useful degree, ans low debt is much, much tougher. That is the conversation I would recommend having with your children.
Thanks and thanks so much for your input. Our child number one (of 3) is interested in a STEM degree (mech engineering) or a double with engineering/finance or econ. The other two, who knows, which is to your point. I am still not clear based on WCI posts if the merit money comes off the EFC or the sticker price of the school? In other words, the 2/3 ride your first got, did they even use the EFC or just say, here's what it will cost you to go here ignoring the EFC?

randomguy
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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by randomguy » Mon Nov 13, 2017 4:43 pm

chipperd wrote:
Mon Nov 13, 2017 4:30 pm


Thanks and thanks so much for your input. Our child number one (of 3) is interested in a STEM degree (mech engineering) or a double with engineering/finance or econ. The other two, who knows, which is to your point. I am still not clear based on WCI posts if the merit money comes off the EFC or the sticker price of the school? In other words, the 2/3 ride your first got, did they even use the EFC or just say, here's what it will cost you to go here ignoring the EFC?
About 1/3 of my engineering class switched to a different major by the end of the first semester. Plans change.

In general merit money (either from the school or outside agencies) reduces the price of the school which has the effect of reducing financial aid. Now there are a zillion schools out there and they all handle the situation slightly differently. You would have to ask your specific school how they handle it.

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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by goodenyou » Mon Nov 13, 2017 5:02 pm

The middle class squeeze is ruining a generation of students who foolishly amass mountains of educational debt. The prestigious university degree invariably loses a lot of luster once the debt has to be paid. Expensive college regret is pervasive. A pragmatic approach to education that has utility is a must at these prices . It is a shame that young adults are not properly informed of the ramifications of their decision to attend the expensive college of their dreams. Parents unfortunately fall prey to it as well.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by JCE66 » Mon Nov 13, 2017 5:20 pm

In other words, the 2/3 ride your first got, did they even use the EFC or just say, here's what it will cost you to go here ignoring the EFC?
Chipperd....DU absolutely used the EFC in determining the overall package in some manner, but this was a DU merit scholarship (actually, a bundle of them, to be precise). He had a decent GPA coming out of HS (one of the top ranked in the country), the DU bio-med program was fairly new, and his mother is hispanic. In the end, I suspect somebody in the DU admissions office took a look and said....'Hmmmmm, hispanic kid in STEM? Toss some more money that way. This is a no-brainer'.

I will tell you right now that the first year of engineering is very, very tough. A lot of students 'wash out'. Child #1 who usually got A's with the occasional B came home with an A, and an even split between Bs and Cs. Talk about humbling. Some tutoring and mentoring helped, but the damage was done, and it really wasn't until his fourth year (the first MS year) that he well and truly dug himself out of the hole from his freshman year. That first year was demanding: physically, emotionally, mentally. Be prepared if your child goes the engineering route. I would ditch the double major until you're certain your child can handle the added work.

The other thing I have found is that private schools are far more responsive to requests, helping solve problems, making positive and constructive things happen for your child.

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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by NotWhoYouThink » Mon Nov 13, 2017 5:32 pm

chipperd wrote:
Mon Nov 13, 2017 4:30 pm
JCE66 wrote:
Mon Nov 13, 2017 7:56 am
chipperd...My congratulations on getting a child to the point of secondary education. It has been a long trip. I know. It is not over yet.

I have two children. Child #1 went to Drexel, and got a 2/3rds ride. It was a combined BS/MS in Biomediacal Engineering. We had to do the FAFSA and CSS. Interestingly enough, he was accepted at TCNJ (highly competitive state school) and the total cost would have been higher (even with in-state rates), and no MS. He had a job coming out of DU and is well on his way. He borrowed ~40K over 5 years (we are helping him pay that - we pay off the highest interest loans, and he pays over agreed timeframes, usually six months, at no interest - we use our HELOC with an ultra low interest rate and eat the interest for 6 months). One other thing....child #1 commuted for 5 years by train to DU. That was huge.

Child #2 is a different story. Not like child #1 at all. This one, we insisted go to community college to figure out what interested him. We are financing 100% of this one, and we don't bother with FAFSA anymore. We plunk down our Fidelity Visa card, pay off tuition in one shot (with 2% going to my Roth) and we're done. It may be that child #2 gets an AAS in Biology, and then join the Navy. Child #2 is trying to find his way. It is frustrating.

The bigger point: Adapt your strategy by your child. You know them best, having studied them for many years now. In many instances, private schools offer a better total package. What matters here is a useful degree (recommend STEM), and LOW DEBT.

The best advice I can give you: Remember that getting your child into a college is quite easy. Getting the child out of that college on time, with a useful degree, ans low debt is much, much tougher. That is the conversation I would recommend having with your children.
Thanks and thanks so much for your input. Our child number one (of 3) is interested in a STEM degree (mech engineering) or a double with engineering/finance or econ. The other two, who knows, which is to your point. I am still not clear based on WCI posts if the merit money comes off the EFC or the sticker price of the school? In other words, the 2/3 ride your first got, did they even use the EFC or just say, here's what it will cost you to go here ignoring the EFC?
It's a little complicated.

In general, merit money reduces your need. So if the price is 60K and you get $20K in merit money, your net price is $40K. If your EFC is also $40K, you won't get any need-based financial aid, because you have no need - your EFC plus the scholarship is enough to pay. Virtually all students are eligible to borrow a small amount ($5500 freshman year) through federal loans. Parents need to have submitted FAFSA, and men need to have registered for the draft, unless that part has changed in the last 10 years.

Say the sticker price is $60K, your student gets $20K in merit money, and your EFC is $20K. Then, it depends. Most of the time you have to take out loans to fill the gap, but if you can at least show a gap you can get federal loans for the parents. I don't recommend this. Students cannot take out loans beyond the $5500 without a co-signer.

In general, there are 3 kinds of schools that reduce the sticker price:
- A couple dozen very high end schools, which provide very generous grant-based financial aid for the 5-10% of students whose applications are accepted, and require very little in the way of loans. But if your income and/or pre-tax savings are high, your student will have to pay full price to attend these schools.
- Some Excellent-to-very-good schools that have high sticker prices but provide generous merit aid to attract high achieving students, especially national merit finalists, nationally ranked athletes, etc.
- Some very good schools that reduce the sticker price for targeted students through merit aid, but still leave the family with a $30-$50K bill.

In the second 2 cases, the merit money will be tied to maintaining a high GPA, so sometimes students wash out on these deals.

And of course there are CCs, and secondary state schools (not the flagship campus) and generous grandparents and Service Academies and other ways to cobble together a college education.

(edited to add:) In some states there are scholarships, especially at the non-flagship publics, to keep kids in state. We could have sent one to the state STEM campus and the other to the state LA campus at bargain prices, just based on class rank and ACT scores.

chipperd
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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by chipperd » Mon Nov 13, 2017 7:07 pm

Ok. Just corrected a major error. Taxes paid was listed as "0". Put in the correct number and resubmitted.
Drumroll.....
New EFC of $32,880.
Thanks all for the input and ideas.
Much appreciated.
Chipperd

marcopolo
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Re: FAFSA EFC number shock!

Post by marcopolo » Mon Nov 13, 2017 7:54 pm

masteraleph wrote:
Mon Nov 13, 2017 12:07 am
marcopolo wrote:
Sun Nov 12, 2017 10:54 pm

When my son was applying to schools a couple years ago, we never filled out FAFSA (no hope of getting need based-aid), but he still got several merit offers from "flagship" state schools. Many schools even have fixed amounts of merit aid (up to full tuition) they give to ANY student meeting certain academic targets, no FAFSA required.
Did your son end up going to one of those schools and receiving the merit aid? Because a lot of universities still require you to fill out the FAFSA in order to get merit aid. Heck, my wife had to fill out the FAFSA to receive her PhD fellowship. A lot of schools run all of their funding through the same system, and while they might offer you the aid without filling out the FAFSA, you have to fill it out to actually receive the aid.

Good point, and you maybe correct. He decided to go to a school from which he did not receive any aid. So, I am not sure if he would have actually received the offered merit aid without the FAFSA. But, the offer did not state that as a condition. I know i did not fill out FAFSA for my PhD Fellowships. But, that was 20+ years ago.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: FAFSA EFC number shock! [Expected Family Contribution]

Post by technovelist » Mon Nov 13, 2017 8:27 pm

goodenyou wrote:
Mon Nov 13, 2017 5:02 pm
The middle class squeeze is ruining a generation of students who foolishly amass mountains of educational debt. The prestigious university degree invariably loses a lot of luster once the debt has to be paid. Expensive college regret is pervasive. A pragmatic approach to education that has utility is a must at these prices . It is a shame that young adults are not properly informed of the ramifications of their decision to attend the expensive college of their dreams. Parents unfortunately fall prey to it as well.
Absolutely correct.

Maybe a personal story would be of some interest.

I went to a very expensive school for underachievers with high SAT scores, back in the Neolithic Era (1965-1969, to be more precise :mrgreen:) . My total costs were about $4,000 a year, which wasn't too much less than Harvard at that time. I took out loans and got grants and work-study awards. I graduated with a liberal arts degree and went into actuarial science, where I made $125/week to start.

I don't recall how much total debt I graduated with, but it was probably about $10,000, or 1 1/2 times my gross yearly salary.
I paid the loans back within 10 years without their ruining me.

Would I recommend that anyone do this today?

Not on your life. It's WAY too risky at these absurd costs.

What would I do if I had a child ready for college?

I would say "Let's figure out what we can afford without either of us having to take out any loans."
In theory, theory and practice are identical. In practice, they often differ.

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