EFC of 59K?! That is more than my net pay

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DeDad
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EFC of 59K?! That is more than my net pay

Post by DeDad »

I am scratching my head on how this is supposed to work. My EFC on FAFSA and CSS Profile is spitting out a number of 59K. What is wrong with my math? I don't see how we can pay that much

Annual wages: 160k

Pre-tax deductions for healthcare, dental, etc.: -8k
Pre-tax deductions to 401k: -19k (contribution limit)
Est. Federal tax withholding: -24k
Est. State tax: -9k
Est. City tax: -2k

Net income = 98k

Mortgage: -18k
Home insurance: -2k
Auto insurance: -1.5k
Real estate tax: -6k

Netnet: 70.5k

If we pay 59k for college, then we have to live on 1000$ per month? for a family of 4? I must be missing something.

Other than the math, the other issue I have is the typical situation with kids - 'all the other parents in this high school (public) are sending their kids to colleges like johns hopkins, cornell, .... with estimated costs of > 70K'. All the other parents seem to be able to give their kids cars, iphone 11s, support their college dreams, etc. What is wrong with me? You would think I am making enough. I had to work very very hard to get here. I feel like a cheapskate.
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DeDad
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

I forgot to deduct Roth IRA contributions in my wife and my name (-12k). After deducting this, my netnetnet is 58.5k. Less than the EFC
MotoTrojan
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Re: EFC of 59K?! That is more than my net pay

Post by MotoTrojan »

I don't know how these systems work, but it isn't a god-given right to be able max out a 401k and Roth IRA. Maybe those other parents are forgoing retirement savings so they can send their kids to prestigious schools. I don't envy that sacrifice.

Nothing against expensive schools; I went to one debt-free with generous support from grandparents/parents, and (maybe by luck, but still) it ended up setting me up on an amazing start to my career. It is sad though when families that can't afford it imperil their retirement just to keep up with the Jones.
fabdog
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Re: EFC of 59K?! That is more than my net pay

Post by fabdog »

You're missing the asset portion of the picture... it's not just income.

Here's a link to FAFSA, which speaks high level, and then links to a more complete document

Basically, they are including a portion of your assets as available for funding college

Mike

https://fafsa.ed.gov/help/fftoc01g.htm
livesoft
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Re: EFC of 59K?! That is more than my net pay

Post by livesoft »

Sounds like you got off easy, you wealthy dog, you!

Colleges expect that parents stop contributing to retirement accounts while they have a child in school. For a 2-earner family maxing retirement plan contributions and over age 50 that's $26K + $26K + $7K + $7K = $66K a year. That is usually enough to pay for at least one person's college expenses each year. (Yes, I see that you are not age 50 and may not be a two earner family.)

And if you have any taxable account savings that can get added in as well.

Also don't forget that you get a free $2,500 tax credit and another $500 child tax credit for $3,000 instant grant money.
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Re: EFC of 59K?! That is more than my net pay

Post by Tom_T »

I discovered that if you do a transfer of retirement assets (like your 401K to your IRA), the FAFSA IRS retrieval tool counts that as income! Yes, my EFC went from $18,000 to over $100,000. Don't call the FAFSA people -- they are completely useless and cannot help you. Only the college can see the details. My daughter's financial aid office confirmed that, yes, it was an IRA transfer that was causing the income number to be so high. To make adjustment, all they needed was a transaction statement showing the transfer.
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Nate79
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Re: EFC of 59K?! That is more than my net pay

Post by Nate79 »

You make $160k.
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Re: EFC of 59K?! That is more than my net pay

Post by MathWizard »

With the information you provided, and assuming
160K is the total family gross, not just your income
the student makes 0 and has no assets; these count much greater than parental income/assets
income taxes paid are 24K same as withholding
you only have one child
then it looks like you must have a bit over $400K in assets outside your home equity and retirement accounts.

You could spend some of the $400K to pay down the mortgage, which would drop the asset portion of your EFC.
Similarly for retirement accounts. You don't get to decrease income this way, but you can decrease parental assets.
The same is true for children if they can contribute to an IRA, at least it was true 4 years ago for the last FAFSA I filled out.

I assume that you have not included home equity or retirement account balances in your assets,
if you have, then remove them and your EFC should drop.
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Re: EFC of 59K?! That is more than my net pay

Post by Jags4186 »

Send your kid to a school that costs much less than $59k annually and you won't have to contribute $59k. Better yet, have your kid get scholarships that cover the full cost of attendance. If your kid can get into Johns Hopkins or Cornell then I'm sure there are plenty of schools that will throw money at him.
Last edited by Jags4186 on Mon Dec 30, 2019 2:17 pm, edited 2 times in total.
an_asker
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Re: EFC of 59K?! That is more than my net pay

Post by an_asker »

Nate79 wrote: Mon Dec 30, 2019 2:11 pm You make $160k.
And this does not include taxable savings and real estate side hustles.

OP:

Welcome to the world of undergraduate education - you're learning what I learned last year!! :oops:
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Re: EFC of 59K?! That is more than my net pay

Post by BuckyBadger »

You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
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Re: EFC of 59K?! That is more than my net pay

Post by sergio »

BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
I think the word OP is looking for is "disposable income" (ie money available after all mandatory stuff is paid for), not "net pay".

One doesn't *need* to max out their 401ks, contribute anything to Roths, take out a $1.5k/month mortgage, etc.

I work with a guy who makes good money, but both his kids are now in state college.

He reduced his 401k to the minimum needed to get the match, is forgoing Roth contributions, paying the minimum on his mortgage, and his wife switched from part time to full time work. It's a few years of pain for him and his wife, but probably a decade of gainz for each of his kids.
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Re: EFC of 59K?! That is more than my net pay

Post by an_asker »

sergio wrote: Mon Dec 30, 2019 2:28 pm
BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
I think the word OP is looking for is "disposable income" (ie money available after all mandatory stuff is paid for), not "net pay".

One doesn't *need* to max out their 401ks, contribute anything to Roths, take out a $1.5k/month mortgage, etc.

I work with a guy who makes good money, but both his kids are now in state college.

He reduced his 401k to the minimum needed to get the match, is forgoing Roth contributions, paying the minimum on his mortgage, and his wife switched from part time to full time work. It's a few years of pain for him and his wife, but probably a decade of gainz for each of his kids.
I don't think they need to be taking so many drastic measures for state colleges... unless the kids didn't get any merit assistance at all.
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Re: EFC of 59K?! That is more than my net pay

Post by MotoTrojan »

BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
Bingo. OP I am sorry you are getting mildly flamed, but this post is similar to those "I make $350K in San Francisco and can't afford a modest lifestyle" posts.
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

Tom_T wrote: Mon Dec 30, 2019 2:06 pm I discovered that if you do a transfer of retirement assets (like your 401K to your IRA), the FAFSA IRS retrieval tool counts that as income! Yes, my EFC went from $18,000 to over $100,000. Don't call the FAFSA people -- they are completely useless and cannot help you. Only the college can see the details. My daughter's financial aid office confirmed that, yes, it was an IRA transfer that was causing the income number to be so high. To make adjustment, all they needed was a transaction statement showing the transfer.
You screwed up your FAFSA. There is a little tiny box you had to check indicating the money was a rollover so it would be excluded from available income.
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

OP, Money in retirement accounts is excluded from assets, but your retirement contributions are considered part of available income.

What are your non-retirement assets? FAFSA excludes home equity, but everything is fair game on CSS (not that all colleges use it).

Luckily for you, you can certainly find colleges for a lot less than 59K/year.
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Re: EFC of 59K?! That is more than my net pay

Post by willthrill81 »

MotoTrojan wrote: Mon Dec 30, 2019 2:42 pm
BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
Bingo. OP I am sorry you are getting mildly flamed, but this post is similar to those "I make $350K in San Francisco and can't afford a modest lifestyle" posts.
It's hard to get too worked up about a family making 2.5x the median household income having to potentially pay full price for college. That's the price of success.
cshell2 wrote: Mon Dec 30, 2019 2:47 pm Luckily for you, you can certainly find colleges for a lot less than 59K/year.
You mean someone doesn't have to spend a quarter of a million dollars to get a decent undergraduate degree?!? :wink:

Tuition for the regional, comprehensive university near us for four years is about $26k.
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Re: EFC of 59K?! That is more than my net pay

Post by Tom_T »

cshell2 wrote: Mon Dec 30, 2019 2:45 pm
Tom_T wrote: Mon Dec 30, 2019 2:06 pm I discovered that if you do a transfer of retirement assets (like your 401K to your IRA), the FAFSA IRS retrieval tool counts that as income! Yes, my EFC went from $18,000 to over $100,000. Don't call the FAFSA people -- they are completely useless and cannot help you. Only the college can see the details. My daughter's financial aid office confirmed that, yes, it was an IRA transfer that was causing the income number to be so high. To make adjustment, all they needed was a transaction statement showing the transfer.
You screwed up your FAFSA. There is a little tiny box you had to check indicating the money was a rollover so it would be excluded from available income.
Really? That is good to know, thanks. It's deceptive because they don't actually show you the income amount pulled in from the IRS, so there's no red flag that would make you jump up and say "hey, that number looks wrong." And because's it's all based on two years' prior, I had forgotten about the rollover. And, it was a direct transfer; I didn't take a distribution and re-deposit it later. So even if I had remembered the rollover, it wouldn't have occurred to me that it might be viewed as income. Live and learn...

According to my searches, selecting the option you mentioned exposes another entry field that allows you to enter the amount of rollover.

Well, my daughter has two years to go, and I don't plan on any rollovers this year, so hopefully I won't need to deal with this again -- but at least I can pass on this knowledge to some other suffering parent. :)
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

Tom_T wrote: Mon Dec 30, 2019 2:59 pm
cshell2 wrote: Mon Dec 30, 2019 2:45 pm
Tom_T wrote: Mon Dec 30, 2019 2:06 pm I discovered that if you do a transfer of retirement assets (like your 401K to your IRA), the FAFSA IRS retrieval tool counts that as income! Yes, my EFC went from $18,000 to over $100,000. Don't call the FAFSA people -- they are completely useless and cannot help you. Only the college can see the details. My daughter's financial aid office confirmed that, yes, it was an IRA transfer that was causing the income number to be so high. To make adjustment, all they needed was a transaction statement showing the transfer.
You screwed up your FAFSA. There is a little tiny box you had to check indicating the money was a rollover so it would be excluded from available income.
Really? That is good to know, thanks. It's deceptive because they don't actually show you the income amount pulled in from the IRS, so there's no red flag that would make you jump up and say "hey, that number looks wrong." And because's it's all based on two years' prior, I had forgotten about the rollover.

According to my searches, selecting the option you mentioned exposes another entry field that allows you to enter the amount of rollover.

Well, my daughter has two years to go, and I don't plan on any rollovers this year, so hopefully I won't need to deal with this again -- but at least I can pass on this knowledge to some other suffering parent. :)
It's super easy to miss and happens so often that I can't believe they don't do something to make it clearer... especially with DRT and not being able to see what is imported. And yes, FAFSA won't help at all after it's been submitted. You have to go to the school and they fix it. Pain, I agree.
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Re: EFC of 59K?! That is more than my net pay

Post by Tom_T »

willthrill81 wrote: Mon Dec 30, 2019 2:50 pmYou mean someone doesn't have to spend a quarter of a million dollars to get a decent undergraduate degree?!?
My wife has a relative who put three kids through good schools in NYC, including graduate school for at least one of them, and he was bragging (I think) that he spent a million dollars on their education.
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Re: EFC of 59K?! That is more than my net pay

Post by willthrill81 »

Tom_T wrote: Mon Dec 30, 2019 3:05 pm
willthrill81 wrote: Mon Dec 30, 2019 2:50 pmYou mean someone doesn't have to spend a quarter of a million dollars to get a decent undergraduate degree?!?
My wife has a relative who put three kids through good schools in NYC, including graduate school for at least one of them, and he was bragging (I think) that he spent a million dollars on their education.
:shock:
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DeDad
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

Thank you, all. Good questions,
- Yes, we are a single wage family
- All of our savings have gone into 401K, Roth IRAs and the remainder into paying off the family home. So excluding the family home and retirement savings, we only have about 30k in assets (checking + savings accounts)
- We saved around 110$ into 529k accounts - about 55k each for the two kids

You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.

PS: Don't worry about blasting me. I don't take it the wrong way. I am not apologetic about my pay. No one handed it to me on a platter. I fought to get here. Thanks for your perspectives.
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Re: EFC of 59K?! That is more than my net pay

Post by TheDDC »

There is a concept of kids getting a job and paying for college themselves. Amazing that is not being considered here. Contrary to popular thought no one is entitled to have college funded by parents.

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Re: EFC of 59K?! That is more than my net pay

Post by livesoft »

Even if your EFC was lower, I think the only financial "aid" that your student would get would be loans anyways. It looks like you can afford to send your student to college without any loans involved at all.
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

The 110K in 529's are countable assets (all of them, including siblings), so with that and the other 30K, that's about 8K of your EFC.
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Re: EFC of 59K?! That is more than my net pay

Post by willthrill81 »

DeDad wrote: Mon Dec 30, 2019 3:07 pm You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.
You're correct that many parents are indeed sacrificing their own retirement in order to pay for their kids' college. This is a noble but often self-defeating move, though, because, as the saying goes, you cannot get a loan to pay for retirement. If you're not able to pay for your own retirement, and about half of current retirees got there involuntarily, then the burden of paying for it often falls on your children and can last for many years.

But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
Last edited by willthrill81 on Mon Dec 30, 2019 3:15 pm, edited 1 time in total.
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

livesoft wrote: Mon Dec 30, 2019 3:11 pm Even if your EFC was lower, I think the only financial "aid" that your student would get would be loans anyways. It looks like you can afford to send your student to college without any loans involved at all.
Only at the expense of saving for retirement. It looks like that is the trade-off to weigh
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

willthrill81 wrote: Mon Dec 30, 2019 3:14 pm
DeDad wrote: Mon Dec 30, 2019 3:07 pm You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.
You're correct that many parents are indeed sacrificing their own retirement in order to pay for their kids' college. This is a noble but often self-defeating move, though, because, as the saying goes, you cannot get a loan to pay for retirement. If you're not able to pay for your own retirement, and about half of current retirees got there involuntarily, then the burden of paying for it often falls on your children and can last for many years.

But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
Could not agree more. I sound like a cheapskate compared to other parents
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

You might have to think outside the box here. You say you're a one income family. Could your spouse get a job and that income go just towards college? Each kid has about 14K/year to work with in savings. What can you cash flow? They can take about 27K in Stafford loans over 4 years.

I mean really, it's not that hard to find a very good school for a lot less than 59K. If your kid is good enough to get into JH or Cornell other schools a tier down will be throwing money at him/her to attend. Nothing cheap about going that route. A lot of families that could afford to pay the full 70K choose not to.
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Re: EFC of 59K?! That is more than my net pay

Post by BuckyBadger »

willthrill81 wrote: Mon Dec 30, 2019 3:14 pm But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
It's definitely false, but on these boards i think even more vocal are the ones who think that every cent spent more than the cost of 2 years of CC and then 2 years at the flagship StateU is a cent wasted, or that a student can "work" their way through an elite school by washing dishes at school and getting a summer job.

Not saying that's you - just that there are a few distinct factions on this board.
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

cshell2 wrote: Mon Dec 30, 2019 3:19 pm You might have to think outside the box here. You say you're a one income family. Could your spouse get a job and that income go just towards college? Each kid has about 14K/year to work with in savings. What can you cash flow? They can take about 27K in Stafford loans over 4 years.

Good point. We are exploring this path too.

I mean really, it's not that hard to find a very good school for a lot less than 59K. If your kid is good enough to get into JH or Cornell other schools a tier down will be throwing money at him/her to attend. Nothing cheap about going that route. A lot of families that could afford to pay the full 70K choose not to.
I agree. Do the kids coming out of the top-most tier colleges fare significantly better than those coming out of the next tier (with no debt)? I don't know..
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Re: EFC of 59K?! That is more than my net pay

Post by Vulcan »

DeDad wrote: Mon Dec 30, 2019 1:29 pm I am scratching my head on how this is supposed to work. My EFC on FAFSA and CSS Profile is spitting out a number of 59K. What is wrong with my math? I don't see how we can pay that much
EFC produced by FAFSA is a useful ballpark figure, but should not be relied on to estimate what you would actually pay at each individual school.

That is what NPC of each particular school is for. While not official, it is supposed to be a better estimate of actual bill for your particular circumstances.

If NPC for a particular school is more than you are willing to pay, it only makes sense to apply there if you are willing to cosign loans or there is merit money potential.
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Re: EFC of 59K?! That is more than my net pay

Post by willthrill81 »

BuckyBadger wrote: Mon Dec 30, 2019 3:23 pm
willthrill81 wrote: Mon Dec 30, 2019 3:14 pm But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
It's definitely false, but on these boards i think even more vocal are the ones who think that every cent spent more than the cost of 2 years of CC and then 2 years at the flagship StateU is a cent wasted, or that a student can "work" their way through an elite school by washing dishes at school and getting a summer job.

Not saying that's you - just that there are a few distinct factions on this board.
Yes, there are some with that viewpoint, but I think that the 'ridiculously expensive university or bust' crowd is a lot bigger. And I'm the first one to say that the cheapest university option is not necessarily 'optimal' with regard to ROI or anything else. But there's a big gulf between the 'CC + state U' model and spending a quarter of a million on an undergraduate degree.

On a related note, I think that so many have bought into the 'ridiculously expensive university or bust' idea that it has directly led to many such universities becoming even more expensive. They are incentivized to increase their price.
Last edited by willthrill81 on Mon Dec 30, 2019 3:32 pm, edited 1 time in total.
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

BuckyBadger wrote: Mon Dec 30, 2019 3:23 pm
willthrill81 wrote: Mon Dec 30, 2019 3:14 pm But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
It's definitely false, but on these boards i think even more vocal are the ones who think that every cent spent more than the cost of 2 years of CC and then 2 years at the flagship StateU is a cent wasted, or that a student can "work" their way through an elite school by washing dishes at school and getting a summer job.

Not saying that's you - just that there are a few distinct factions on this board.
LOL. Well, it is a choice between investing in your independence after retirement or investing in your children so that you have a nicer basement to move into... (your child's spouse permitting)
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

DeDad wrote: Mon Dec 30, 2019 3:31 pm
BuckyBadger wrote: Mon Dec 30, 2019 3:23 pm
willthrill81 wrote: Mon Dec 30, 2019 3:14 pm But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
It's definitely false, but on these boards i think even more vocal are the ones who think that every cent spent more than the cost of 2 years of CC and then 2 years at the flagship StateU is a cent wasted, or that a student can "work" their way through an elite school by washing dishes at school and getting a summer job.

Not saying that's you - just that there are a few distinct factions on this board.
LOL. Well, it is a choice between investing in your independence after retirement or investing in your children so that you have a nicer basement to move into... (your child's spouse permitting)
Or finding a nice balance in between
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Re: EFC of 59K?! That is more than my net pay

Post by lazydavid »

DeDad wrote: Mon Dec 30, 2019 3:15 pm
livesoft wrote: Mon Dec 30, 2019 3:11 pm Even if your EFC was lower, I think the only financial "aid" that your student would get would be loans anyways. It looks like you can afford to send your student to college without any loans involved at all.
Only at the expense of saving for retirement. It looks like that is the trade-off to weigh
The good news is, if you're reliably and consistently socking away $19k/year towards retirement while also building home equity, there's a good chance that taking four years off of 401k contributions to (at least help) pay for for your kid's education won't have a significant impact on a successful retirement. Only you can do that calculus, of course.
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Re: EFC of 59K?! That is more than my net pay

Post by stoptothink »

BuckyBadger wrote: Mon Dec 30, 2019 3:23 pm
willthrill81 wrote: Mon Dec 30, 2019 3:14 pm But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
It's definitely false, but on these boards i think even more vocal are the ones who think that every cent spent more than the cost of 2 years of CC and then 2 years at the flagship StateU is a cent wasted, or that a student can "work" their way through an elite school by washing dishes at school and getting a summer job.

Not saying that's you - just that there are a few distinct factions on this board.
I don't think I've ever heard anybody on this board state that a young adult can cashflow an "elite" without significant scholarships (really, cashflow $50k+/yr?). The delta in costs is simply outrageous. Cashflow their way through many of the others, absolutely, and there are several members of my family who have done it recently. The average cost of tuition+ fees at public universities in this country is a few dollars over $10k/yr, which is within the realm of possibility for many young people with a strong work ethic.
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Re: EFC of 59K?! That is more than my net pay

Post by Jack FFR1846 »

TheDDC wrote: Mon Dec 30, 2019 3:09 pm There is a concept of kids getting a job and paying for college themselves. Amazing that is not being considered here. Contrary to popular thought no one is entitled to have college funded by parents.

-TheDDC
This could be done in "my" time. (high school graduation 1975). Today, assuming the kid makes $12 per hour net of taxes and works 40 hours a week, and goes to my state's State University on campus, he'd have to work 40 hours a week for 4.8 years to pay for 4 years of college.

By comparison, I did pay my own way through private college. Doing the math on my co-op job (at the time, I was the highest paid engineering student in the co-op program), I would need 1.5 years working full time to pay for 4 years of private college. 6 months at state.

It ain't so easy anymore to pay one's own way.
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Atilla
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Re: EFC of 59K?! That is more than my net pay

Post by Atilla »

willthrill81 wrote: Mon Dec 30, 2019 2:50 pm
MotoTrojan wrote: Mon Dec 30, 2019 2:42 pm
BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
Bingo. OP I am sorry you are getting mildly flamed, but this post is similar to those "I make $350K in San Francisco and can't afford a modest lifestyle" posts.
It's hard to get too worked up about a family making 2.5x the median household income having to potentially pay full price for college. That's the price of success.
cshell2 wrote: Mon Dec 30, 2019 2:47 pm Luckily for you, you can certainly find colleges for a lot less than 59K/year.
You mean someone doesn't have to spend a quarter of a million dollars to get a decent undergraduate degree?!? :wink:

Tuition for the regional, comprehensive university near us for four years is about $26k.
Yep, top shelf Big10 school tuition runs $11,000/year in-state. You can cash-flow that out of your pocket without breaking a sweat.
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

Jack FFR1846 wrote: Mon Dec 30, 2019 3:39 pm
TheDDC wrote: Mon Dec 30, 2019 3:09 pm There is a concept of kids getting a job and paying for college themselves. Amazing that is not being considered here. Contrary to popular thought no one is entitled to have college funded by parents.

-TheDDC
This could be done in "my" time. (high school graduation 1975). Today, assuming the kid makes $12 per hour net of taxes and works 40 hours a week, and goes to my state's State University on campus, he'd have to work 40 hours a week for 4.8 years to pay for 4 years of college.

By comparison, I did pay my own way through private college. Doing the math on my co-op job (at the time, I was the highest paid engineering student in the co-op program), I would need 1.5 years working full time to pay for 4 years of private college. 6 months at state.

It ain't so easy anymore to pay one's own way.
I don't know. Most of the schools around here are around 8-10K tuition. A lot of kids in my town live at home and attend the local university. Working full time summers and over winter break and cutting back to 10-15 hours a week during the 8 months for school it's doable.

The OP's child doesn't have to do this though. They should be able to handle the cost of a state school living away from home.
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Re: EFC of 59K?! That is more than my net pay

Post by TN_Boy »

willthrill81 wrote: Mon Dec 30, 2019 2:50 pm
MotoTrojan wrote: Mon Dec 30, 2019 2:42 pm
BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
Bingo. OP I am sorry you are getting mildly flamed, but this post is similar to those "I make $350K in San Francisco and can't afford a modest lifestyle" posts.
It's hard to get too worked up about a family making 2.5x the median household income having to potentially pay full price for college. That's the price of success.
cshell2 wrote: Mon Dec 30, 2019 2:47 pm Luckily for you, you can certainly find colleges for a lot less than 59K/year.
You mean someone doesn't have to spend a quarter of a million dollars to get a decent undergraduate degree?!? :wink:

Tuition for the regional, comprehensive university near us for four years is about $26k.
Hmm, does that 26k include room and board, and mandatory fees? Quoting just tuition doesn't really capture the cost very well.

In my mostly medium cost of living state, the yearly cost (tuition, fees, room and board) at the flagship state school is maybe 26k. Others in the state system might be less, but still in the ballpark of that number.
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Re: EFC of 59K?! That is more than my net pay

Post by cshell2 »

TN_Boy wrote: Mon Dec 30, 2019 3:47 pm
Hmm, does that 26k include room and board, and mandatory fees? Quoting just tuition doesn't really capture the cost very well.

In my mostly medium cost of living state, the yearly cost (tuition, fees, room and board) at the flagship state school is maybe 26k. Others in the state system might be less, but still in the ballpark of that number.
The vast majority of college students do not live on campus.
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Re: EFC of 59K?! That is more than my net pay

Post by willthrill81 »

TN_Boy wrote: Mon Dec 30, 2019 3:47 pm
willthrill81 wrote: Mon Dec 30, 2019 2:50 pm
MotoTrojan wrote: Mon Dec 30, 2019 2:42 pm
BuckyBadger wrote: Mon Dec 30, 2019 2:18 pm You have a *very* specific definition of net pay that i don't think the government or education system would agree with.
Bingo. OP I am sorry you are getting mildly flamed, but this post is similar to those "I make $350K in San Francisco and can't afford a modest lifestyle" posts.
It's hard to get too worked up about a family making 2.5x the median household income having to potentially pay full price for college. That's the price of success.
cshell2 wrote: Mon Dec 30, 2019 2:47 pm Luckily for you, you can certainly find colleges for a lot less than 59K/year.
You mean someone doesn't have to spend a quarter of a million dollars to get a decent undergraduate degree?!? :wink:

Tuition for the regional, comprehensive university near us for four years is about $26k.
Hmm, does that 26k include room and board, and mandatory fees? Quoting just tuition doesn't really capture the cost very well.

In my mostly medium cost of living state, the yearly cost (tuition, fees, room and board) at the flagship state school is maybe 26k. Others in the state system might be less, but still in the ballpark of that number.
I only quoted the price of tuition. Unless one's major demands it, fees are quite low there. Room and board is, IMHO, entirely separate. Students may live at home while attending (good enough for me and many others) or rent off campus and pay for it via part-time work, for instance.
cshell2 wrote: Mon Dec 30, 2019 3:53 pm The vast majority of college students do not live on campus.
Correct. And my experience is that many, maybe most, students pay for their rent wholly themselves or at least in part.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: EFC of 59K?! That is more than my net pay

Post by Vulcan »

willthrill81 wrote: Mon Dec 30, 2019 3:14 pm
DeDad wrote: Mon Dec 30, 2019 3:07 pm You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.
You're correct that many parents are indeed sacrificing their own retirement in order to pay for their kids' college. This is a noble but often self-defeating move, though, because, as the saying goes, you cannot get a loan to pay for retirement. If you're not able to pay for your own retirement, and about half of current retirees got there involuntarily, then the burden of paying for it often falls on your children and can last for many years.

But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
Must it be spent? Of course not. Our elder's college essay expressed his deep personal conviction (that we worked hard to instill in him) that his own hard work matters more than the school he goes to (with some personal details I can't give here as they would be deanonymizing).

That said, there are some schools that are very hard to pass up no matter the price.

We have always told him that if he gets into MIT, he is going to MIT. He did. So he will.
Even if some of the schools further down the list offer big merit money. Even if some of those schools are top 20 USNWR. And even though he could attend our state flagship tuition-free.

Yes, it will be a huge financial sacrifice (we are in the almost-full-pay doughnut hole), but we didn't come to this country to deny our future kids top-notch educational opportunities should they deserve them because we make too much to get a lot of need-based aid. We will not be joining country clubs in retirement, but G-d willing, we won't starve either.

YMMV
If you torture the data long enough, it will confess to anything. ~Ronald Coase
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Re: EFC of 59K?! That is more than my net pay

Post by TheDDC »

BuckyBadger wrote: Mon Dec 30, 2019 3:23 pm
willthrill81 wrote: Mon Dec 30, 2019 3:14 pm But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
It's definitely false, but on these boards i think even more vocal are the ones who think that every cent spent more than the cost of 2 years of CC and then 2 years at the flagship StateU is a cent wasted, or that a student can "work" their way through an elite school by washing dishes at school and getting a summer job.

Not saying that's you - just that there are a few distinct factions on this board.
Yes, kids can and absolutely should "work" their way through school, and nothing is OWED to anyone automatically for college. The rose colored glasses around here are thick. An elite college is a waste of money, and for most every job out there no one cares where you went to school.

The elite (more likely elitist) mentality of "all must go to college" is over. The university bubble is bursting around you.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks, minimize amount given to medical-industrial complex
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Re: EFC of 59K?! That is more than my net pay

Post by McDougal »

TheDDC wrote: Mon Dec 30, 2019 3:09 pm There is a concept of kids getting a job and paying for college themselves. Amazing that is not being considered here. Contrary to popular thought no one is entitled to have college funded by parents.

-TheDDC
They can be if the parents get divorced. (My lawyer was not very good. Water under the bridge now)
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Re: EFC of 59K?! That is more than my net pay

Post by MathWizard »

DeDad wrote: Mon Dec 30, 2019 3:07 pm Thank you, all. Good questions,
- Yes, we are a single wage family
- All of our savings have gone into 401K, Roth IRAs and the remainder into paying off the family home. So excluding the family home and retirement savings, we only have about 30k in assets (checking + savings accounts)
- We saved around 110$ into 529k accounts - about 55k each for the two kids

You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.

PS: Don't worry about blasting me. I don't take it the wrong way. I am not apologetic about my pay. No one handed it to me on a platter. I fought to get here. Thanks for your perspectives.
The EFC of $58.5K sounds too high for $100K+30K of assets.

Make sure you put your total tax (1040 line 16 if I recall correctly) paid in, not what you had to pay after above withholding. That should come
off your income. I think this is only for federal, not state, but I could be wrong.

The 529s are in your control, though for the benefit of your son's correct?
There is a big difference if this is counted as an asset for you rather that the student's.
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Re: EFC of 59K?! That is more than my net pay

Post by stoptothink »

Vulcan wrote: Mon Dec 30, 2019 3:56 pm
willthrill81 wrote: Mon Dec 30, 2019 3:14 pm
DeDad wrote: Mon Dec 30, 2019 3:07 pm You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.
You're correct that many parents are indeed sacrificing their own retirement in order to pay for their kids' college. This is a noble but often self-defeating move, though, because, as the saying goes, you cannot get a loan to pay for retirement. If you're not able to pay for your own retirement, and about half of current retirees got there involuntarily, then the burden of paying for it often falls on your children and can last for many years.

But to be frank, I really believe that many people have gotten this snobbish attitude about a university education and believe that huge amounts of money must be spent on one in order to get a good one. That's completely false.
Must it be spent? Of course not. Our elder's college essay expressed his deep personal conviction (that we worked hard to instill in him) that his own hard work matters more than the school he goes to (with some personal details I can't give here as they would be deanonymizing).

That said, there are some schools that are very hard to pass up no matter the price.

We have always told him that if he gets into MIT, he is going to MIT. He did. So he will.
Even if some of the schools further down the list offer big merit money. Even if some of those schools are top 20 USNWR. And even though he could attend our state flagship tuition-free.

Yes, it will be a huge financial sacrifice (we are in the almost-full-pay doughnut hole), but we didn't come to this country to deny our future kids top-notch educational opportunities should they deserve them because we make too much to get a lot of need-based aid. We will not be joining country clubs in retirement, but G-d willing, we won't starve either.

YMMV
Congratulations on your son getting into MIT. If I recall, you were worried about his chances. Clearly he is an exceptional young man.
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Re: EFC of 59K?! That is more than my net pay

Post by an_asker »

DeDad wrote: Mon Dec 30, 2019 3:07 pm Thank you, all. Good questions,
- Yes, we are a single wage family
- All of our savings have gone into 401K, Roth IRAs and the remainder into paying off the family home. So excluding the family home and retirement savings, we only have about 30k in assets (checking + savings accounts)
- We saved around 110$ into 529k accounts - about 55k each for the two kids

You are all probably right - the other parents must be cutting back or stopping retirement savings (401K and Roth) and cutting into other areas to send their kids to these 60k+ schools. So, in essence they are investing in their children instead of their financial health in retirement. I guess that is a personal choice and one that I have to think about.

PS: Don't worry about blasting me. I don't take it the wrong way. I am not apologetic about my pay. No one handed it to me on a platter. I fought to get here. Thanks for your perspectives.
It does appear that gross income is one of the key inputs that they use to determine EFC. I thought that the savings would swing the number much, but relatively speaking, it does not.

That said, there are a couple of calculators out there that you can put fictitious numbers in to get an idea what your EFC might look like.

What state are you in? Maybe the in-state tuition is not a lot...
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DeDad
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Re: EFC of 59K?! That is more than my net pay

Post by DeDad »

YMMV - Congradulations to your Son for getting into MIT. That is an achievement indeed.
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