Could someone please explain expected family contribution to me

[mominwestlake]

I have been reading lately in magazines about financial aid for college since my daughter is a freshman in high school this year. Several articles talk about filling out the FAFSA to have your EFC (expected family contribution) calculated. What happens once you find out your EFC? Let's say our EFC is less than the cost of tuition at colleges my dd applies to. Will the colleges adjust her tuition? Will they give her grants/money that she won't have to pay back or will they tell her to get a loan to pay the whole amount. I am hoping that she'll have to pay the lesser amount and never have to pay it back. How likely is that to happen?

I know we still have a few years but I am working on our budget for future vacations and am worried about college costs. I also have an 8th grader so I'll have 2 in college at about the same time.

Thanks for any input you can give me.

 

[Teacher510]

The EFC is used to determine how much financial aid you can get. Don't expect much! Your EFC is what they think you should be able to pay for that year. Unless you have alot put aside think LOANS!
DD had a half tuition scholarship-no room and board included(the most available from the school) and a few other smaller ones. She has some relatively smaller loans and I have the bulk of them. I am a single parent and a teacher so we're not talking big income. The only financial concession was that she got subsidized Stafford loans-translation: interest doesn't start until after graduation.
Now that she is in grad school in a local state university she is a teacher assistant which pays her tuition and gives her a small stipend. She has deferred her undergrad loans until she finishes. Good luck!

 

[Green Tea]

Many private schools will meet 100% of the demonstrated need. It is generally with a combination of loans, grants, scholarships and work study jobs. A number are moving to the no loan financial aid program where 100 % is met without a loan component. Private schools are far more likely to meet the full need than state schools are. You likely will end up paying less for a good private school than a state university.

 

[mrsklamc]

The formula that is used to calculate EFC is based on the premise that you owe half of your 'discretionary' income.

Of course, this is 'discretionary' as defined by a government who decides how much to spend and then takes it, rather than actually having a budget and spending within its limits, so they don't understand that 'discretionary' is quite different to us.

 

[swilshire]

When I saw our first EFC, I realized how stupid we had been to save money through the years, particularly DD who had worked since age 16 and pinched every penny. I immediately took savings and paid off a car loan, then revised our form. It helped the numbers some.

Sheila

 

[tw1nsmom]

Unless your DD is big time scholarship material, or you have an enormous amount of money saved, I think it's impractical to think that your DD won't have some loans to repay when she graduates.

To put it in perspective... My parents made very little money. I think their combined income back in 1986 was $18,000. I knew they wouldn't be contributing to my education. They just couldn't. I had a low A average and was applying to state schools. My EFC was $2,500 a year. I had to work my butt off at multiple summer jobs to come up with that money. I still had to work in a work study program through the year and I had loans as well as some VERY small grants to pay the rest. Between undergrad and grad school (state university again), I owed over $30,000 in student loans.

I think most people going to school these days have some loans to pay back.

 

[pamjb]

I have a son who is a senior and I attended a financial aid seminar in the fall. The speaker (who is the dean of financial aid at a private college) gave some great info.
He suggested www.fastweb.com. This is a website that has tons of scholarship info. Some for students as young as 5. While I can't seem to get my senior motivated, I have been having my 13 year old apply. Couldn't hurt. My senior can't figure out what good a $100 scholarship will do him.

 

[carymomof3]

I second the above posters who say that a good chunk of any financial aid package will be in loan options. My DD19 attends a small private college. She received an academic scholarship when accepted that carries through all four years as long as she maintains a certain GPA. Our state legislature also gives a small grant to any in-state students who attend private schools. Our family income is not high and we have two other children, one with high medical costs. The EFC quoted to us every year is laughable. I guess we could manage it if we didn't eat . Her aid package typically includes the scholarship, the grant, the option of a Stafford loan (interest deferred until after graduation) and the amount we are "allowed" to borrow in a Parent Plus loan. It also specifies she is eligible for work-study, but that money is paid directly to the student, not to offset tuition, so it really turns into spending money. She uses her work-study income to pay for books etc.

Keep in mind that the EFC is figured on both your income/assets and your student's and the government thinks the student can afford a much higher percentage of their money to pay for college, so it's better to keep any college savings in the parents' names rather than the student's.

The bottom line is that unless your child qualifies for some good merit scholarships, don't count on much in the way of "free" money. HTH.

 

[MrsPete]

Many private schools will meet 100% of the demonstrated need. It is generally with a combination of loans, grants, scholarships and work study jobs. A number are moving to the no loan financial aid program where 100 % is met without a loan component. Private schools are far more likely to meet the full need than state schools are. You likely will end up paying less for a good private school than a state university.

This happens just often enough for people to consider it "fact". For the vast majority, this doesn't happen. Check on it, and if there's a school that suits your needs and offers you this magical option, then jump on it -- but don't assume that it's going to come together for you.

 

[powellrj]

I haven't done mine for our middle DS, but when I filled them out for our oldest DS 7 or 8 years ago, it was something like $15,000 a year that we could contribute. Ha, ha, ha. Yes I have an extra $60,000 around to pay for the next four years.

 

[MrsPete]

Unless your DD is big time scholarship material, or you have an enormous amount of money saved, I think it's impractical to think that your DD won't have some loans to repay when she graduates . . . I think most people going to school these days have some loans to pay back.

I disagree. Loans are not always a necessity. Students who are very motivated to avoid them may find themselves with a difficult road ahead of them, but it is POSSIBLE. Starting at a community college may be an option for some. Knocking out some classes during the senior year of high school can lower the total cost. Working for the university can greatly lower the cost of education (residence life employs a large number of students; typically they aren't paid, but they receive free room and board -- that was my saving grace, especially because it didn't show up on my W2s). And the person who's determined not to have loans may not graduate in four years.

Look at all your options before you accept the necessity of loans. Those options may not be as attractive as simply heading off to school and thinking about paying later, but they do exist!

If you DO decide that loans are the only road for you, at least make them as small as possible.

 

[Green Tea]

This happens just often enough for people to consider it "fact". For the vast majority, this doesn't happen. Check on it, and if there's a school that suits your needs and offers you this magical option, then jump on it -- but don't assume that it's going to come together for you.

There are not that many privates that have eliminated the loan, but some. (Davidson College is one) Not all privates meet 100% of need, but many do. For a student whose family does not earn much money, a private will almost always be cheaper because they are more likely to meet the aid needs than a public.

For a bright student with a financial need, the prospects are even better. Merit would be applied first to the loan component of the package.

 

[tzolkin]

Many private schools will meet 100% of the demonstrated need. It is generally with a combination of loans, grants, scholarships and work study jobs. A number are moving to the no loan financial aid program where 100 % is met without a loan component. Private schools are far more likely to meet the full need than state schools are. You likely will end up paying less for a good private school than a state university.

the school i went to was actually the "best" one on my list and the most expensive by several thousands of dollars. the reason i went there-- they gave me the best financial aid package. the next best option would have been $12K a year more. (i can't even imagine paying those loans...) i know many people who won't allow their kids to apply to the best schools because they "cost too much", but in reality they may actually wind up costing significantly less for them to attend.

all of the other schools i applied to had very high rates of financial assistance-- for some as many as 95% of the students receive financial aid. unfortunately that means that the money the school has to offer is spread over all of those students. at my school, only a small percentage of students received financial aid so there was more money to offer each recipient. (of course, almost everyone i went to school with was very wealthy... but i got an over $160K education for almost nothing.)


to the OP: i wouldn't worry about the EFC at this point. you really will have to apply to the schools to find out what the actual costs will be. to avoid as much in loans, schools also offer many jobs. i also would not encourage your child to have a savings account in their name when applying. i believe the first year they expect you to pay almost all of that for the student contribution. (the next year when the savings is gone the expected contribution will be less.) my parents did not pay a penny for me to go to college (they did support me in other ways). like i said above, i got a great financial aid package, i had about $7K in loans (total for all 4 years), and i usually worked about 30 hours a week to cover the cost of books and the remaining tuition.

 

[timmac]

My senior can't figure out what good a $100 scholarship will do him.

I'm going to offer the alternate viewpoint here, thinking back to when I was a senior looking into financial aid, scholarships and the like (some 11 years ago now). Depending on what exactly is involved with applying for a $100 scholarship, I'm inclined to very quickly agree with your senior.

Sounds odd? Maybe, but consider the numbers a bit; and I hope this doesn't come across as overly cynical, as it's definitely not how I intend it. Consider how many scholarship applications require writing an essay, seeking letters of recommendation, etc. Take a guess how much time from start to finish goes into one... 3-4 hours maybe?

Now, consider the scope of various scholarships. Some are local, perhaps offered by a small business in the area, or something of the like. Others, like a fairly well known one that was offered by Coca Cola (not sure if it still is), have a national reach. That in mind, think about how many seniors are potentially eligible for any of these given scholarships, and of them, how many actually might apply. Now, think about how likely any given applicant is to be awarded said scholarship. One can do their own math here based upon assumptions unique to the situation, but as a gut feeling, most of these type of scholarships probably afford even an above-average student less than a 1 in 100 chance of winning it (and even that is probably high).

So, suppose we're talking about spending 3 hours to apply for a $1,000 scholarship that someone has a 1 in 100 chance of winning. Long story made short, in the long run, they'd be better off spending that same 3 hours working a minimum wage job.

That said, I don't mean to imply that there don't exist good scholarship opportunities out there, but you have to find the right ones. Some, like the Westinghouse award, offer as much as $100,000 for the winning individual or team, for a science/mathematics project or research. But in the same spirit of "finding the right one", you have to be particularly skilled in these disciplines to even stand a chance.

Now that I've babbled a bit, I'll just offer what I ultimately found to be accurate about financial aid. (I'll also mentioned that I left college in my second semester, never to return, but that is a different story) Most schools with a decent financial aid office, especially the more prestigious schools, will work very hard to help you figure out the financial stuff once you have been accepted. It will probably involve some combination of scholarships, grants, work-study programs, loans, and even some immediate out of pocket expenditure. But again, I believe they do work very hard to help you make it work. On the other hand, one can spend eternity going to "college is affordable" seminars, searching on web sites, and looking for some form or application that will completely take care of the cost, and will probably end up empty handed and jaded.

 

[lilyv]

I have a son who is a senior and I attended a financial aid seminar in the fall. The speaker (who is the dean of financial aid at a private college) gave some great info.
He suggested www.fastweb.com. This is a website that has tons of scholarship info. Some for students as young as 5. While I can't seem to get my senior motivated, I have been having my 13 year old apply. Couldn't hurt. My senior can't figure out what good a $100 scholarship will do him.

That $100.00 scholarship might pay for 1/2 of a textbook. Seriously, I'm not a big advocate of Fastweb. It's advertised heavily, and you have to think of the #'s of students applying for the same scholarship. Your chances of success are pretty slim. No harm in trying, though.

Scholarship apps take some work and time. Applying locally is often a much better deal-far smaller applicant pool. Keep an eye out for scholarships offered by employers, credit unions, veterans groups and so on. Read the fine print. See if they allow students to apply beyond freshman year.

Some of the best scholarships are offered directly by a university. Special reciprocity deals for neighboring states, substantial discounts for children of alums, state scholars programs, and so on. Look at the college website, and check to see if there are any circumstances your student will qualify for right off the top. Then, check to see if the scholarship is available in subsequent years, or if it's only offered as a one time deal to freshmen. The difference can be a substantial sum of money.

 

[adkkev]

I second the advice about community colleges ... less expensive than most four year schools and most offer wide cirriculums. And encourage your child to take any college courses that they can while still in high school!! Depending upon where you live and what's offered at their current high school, there's the potential of graduating from high school with as many as 12 credit hours already under their belt ... Or, if they are taking, or going to take, AP courses in high school, their grades on their AP exams could help them eliminate a course or two (or more) upon college enrollment. Every little bit helps.

Be careful of those "work study" amounts that are listed on financial award letters ... they assume that there actually will be a job for your child on campus, and that's not always the case.

When your second child enters college then the amounts of the grant awards should go up ... of course it still all depends upon your family's income.

And then your child could follow the path of our older son ... two years at a small private 2 yr college in northern NY state, graduating, and then going to the Univ of Alaska at Fairbanks for his Bachelor's degree ... his initial tuition at UAF was out of state tuition, but that was still far cheaper than most everywhere else, and then after a year he became an Alaskan resident, which meant his tuition dropped enormously!! Of course, heading to Alaska for college is not for everyone!!!

And he still lives up there, 9 yrs later, married, and having a great time. Having your son living 4500 miles away is a little rough sometimes, but it has sure given us one heck of an excuse to visit Alaska!!

 

[lilyv]

I second the advice about community colleges ... less expensive than most four year schools and most offer wide cirriculums. And encourage your child to take any college courses that they can while still in high school!! Depending upon where you live and what's offered at their current high school, there's the potential of graduating from high school with as many as 12 credit hours already under their belt ... Or, if they are taking, or going to take, AP courses in high school, their grades on their AP exams could help them eliminate a course or two (or more) upon college enrollment. Every little bit helps.

Be careful of those "work study" amounts that are listed on financial award letters ... they assume that there actually will be a job for your child on campus, and that's not always the case.

When your second child enters college then the amounts of the grant awards should go up ... of course it still all depends upon your family's income.

And then your child could follow the path of our older son ... two years at a small private 2 yr college in northern NY state, graduating, and then going to the Univ of Alaska at Fairbanks for his Bachelor's degree ... his initial tuition at UAF was out of state tuition, but that was still far cheaper than most everywhere else, and then after a year he became an Alaskan resident, which meant his tuition dropped enormously!! Of course, heading to Alaska for college is not for everyone!!!

And he still lives up there, 9 yrs later, married, and having a great time. Having your son living 4500 miles away is a little rough sometimes, but it has sure given us one heck of an excuse to visit Alaska!!

AP credit was a great help with our kids. They both graduated from college in 3 years. Their AP scores allowed them to enroll 3 hours short of sophomore status.

Community college can be good, but you really have to watch whether the exact credit will transfer. I've know way too many kids who've had to repeat courses-both at public and private universities.

A few states are pretty lenient about allowing a student to become a resident fairly easily. When that's possible, it's a great deal. What a wonderful experience it must have been to go to school in Alaska.

 

[HaleyB]

Explore all your options.

The one thing that is a fact about Private Schools is a lot more of them have no gap. Gap is the difference between your EFC and the cost to attend. In short it is how much MORE than your EFC you need to come up with to attend that school (not counting expenses not in the budget).

It very much depends on your EFC and the state you live in, but if your EFC is high, near to or over the cost to attend a public school then I think there is a fair chance you will be better off going to a private school with no gap (not all have no gap). At the very least you can get a better education for the same price (not that all private schools are better than all public schools!).

One huge thing to remember is do not take any extra income for the years you need to file for financial aid.

2008-9 school year aid is based on income for 2007. So by their Senior year in HS you are too late. Do not sell stock, or real estate, it ups your gross income and so ups your EFC.

Also when you see the EFC remember the students contribution is in that number, I think there is a minimum amount, even if they never worked/saved.

The best advice we got was to have a lot of options. We applied to many many schools, some local, some not, some small, some large, some private, some public. The range of finical aid offers we got was amazing, tens of thousands difference. Apply for all aid, but take need based over and before merit awards. $5,000 offered based on need has more value than $5,000 based on merit, merit awards can be lost and often do not adjust up when tuition does (and it will), need based aid on the other hand might adjust with tuition increases. For us they have.