For those of you with a child in college

[phragmipedium]

I was telling DH about what I've learned on here about what the EFC really means, and he was as surprised as I was. We both really thought that it was what the school thought that the family could afford to pay, not just the number that is spit out of a formula after determining how much aid that family qualifies for even if the school knows that the average family could never write an annual check for that amount. They shouldn't call it the EFC, because it's just confusing to people who know that they don't have 30K or whatever to put towards college every year. They should call it something else, like the "leftover amount that you'll have to find some way to pay for"!

I very much agree that it's not well described or explained by FAFSA. It's a pretty archaic formula, though, and it's what we have to work with. Sometimes, families end up having to pay *less* than their EFC or nothing at all - students get great scholarships, private school offers them a great aid package, etc. It's hard to know a lot about how to judge your EFC, other than - if it's higher than a school's cost of attendance (estimated tuition, books and supplies, room/board, personal expenses), you'll almost certainly only qualify for unsubsidized student and parent loans, as well as any scholarships the school offers or the student has accumulated. And if it's below $4300, the student should receive the federal Pell grant and maybe more grant aid as well, along with loans. But between those two, it's hard to judge whether it's low enough for grants at the school of your choice, or high enough that it will only be loans - you just have wait to see.

Please keep in mind that it really isn't the school determining your EFC, though, or giving you what you feel is a ridiculous EFC that you could never afford - the federal processor calculates it based on the information you report on the FAFSA, and then reports it to each of the schools you list on your FAFSA application. Unless there are special circumstances and the aid office tinkers with your EFC at your request, the school has nothing to do with the calculation itself. They just use that number, figure out where it falls along with all their other students, and determine how the money has to be spread around. Sometimes they have some ability to determine how large awards will be and how high the cutoffs will be, like with campus-based federal grant aid, but other times they are limited to federal regulations (ie no Pell grant for EFCs over $4300.) Private schools have the same limitations with federal aid but clearly much more private funding to work with and spend as they choose.

 

[LoveBWVVBR]

Please keep in mind that it really isn't the school determining your EFC, though, or giving you what you feel is a ridiculous EFC that you could never afford - the federal processor calculates it based on the information you report on the FAFSA, and then reports it to each of the schools you list on your FAFSA application. Unless there are special circumstances and the aid office tinkers with your EFC at your request, the school has nothing to do with the calculation itself. They just use that number, figure out where it falls along with all their other students, and determine how the money has to be spread around. Sometimes they have some ability to determine how large awards will be and how high the cutoffs will be, like with campus-based federal grant aid, but other times they are limited to federal regulations (ie no Pell grant for EFCs over $4300.) Private schools have the same limitations with federal aid but clearly much more private funding to work with and spend as they choose.

I think that your summary here gives the perfect description of how the private schools do what I called the "bait and switch". That EFC comes from the FAFSA, but in order to "hook" the families, the private schools come up with these generous grants for the freshman year. The EFC probably does not change from year to year because it's coming from the FAFSA, but the bottom line sure changes when the grant vaporizes in the sophomore year.

The parents don't understand that the aid package that they receive is variable based upon discretionary grants given by the private college. They just think that they qualified for all of those grants based upon income/family situation/etc. That is exactly what I thought until you started explaining that the EFC is something that is set by a formula through the FAFSA, and that private schools have discretionary funds. This should be made CRYSTAL clear to parents before they opt for a $$ private college that offers an outstanding grant package to their freshman, but of course it's not.

You really should become a consultant. I know that my mom's friends would pay to have someone like you come to give a speech and answer questions. You shed a lot of light on the mysterious process of financial aid and you'd save a whole lot of people a whole lot of headaches/heartaches/financial aches!!

 

[dizkids]

just subscribing..interesting and helpful info

 

[DMickey28]

I don't think his salary leaves us with that much leftover- and we live very simple lives. We own our 2 cars- one is 9 years old and 1 is 4 years old. Our house is nothing fancy and our mortgage payment is $1300 a month. Property taxes are $4000 a year. Add to that car and homeowners insurance, retirements funds, groceries, utilities, cost of gas for our cars, the cost of 5 kids and we don't have that much left over to pay for college.

If I go back to work there will be more taxes to pay, after school care for my youngest child, wardrobe cost since I don't have any suitable clothes, plus the stress.

I don't expect the government to give us a free ride and I don't want to be slammed. I was just wondering for those with kid's in college now, what their thoughts were. Currently, I have a part time job and can make around $18000 a year after tax.

What is that $18K before taxes? What would your salary be if you go back? 40K? I have no idea about college and really the decision of you going back to work shouldn't be based on that. Do you want to go back to work? I doubt with the difference of approx. $20K you would end up much further ahead than you are know making $18K. Just my opinion.

 

[m&m's mom]

Let me say this. DH for many years was certified by the government to write the program to determine Financial Aid and I worked in the FA dept of my university while in grad school. We started saving for our future kids college before they were even born.
Choosing the option get a job to help your kid in school seeme like a 100% no brainer!

 

[phragmipedium]

I think that your summary here gives the perfect description of how the private schools do what I called the "bait and switch". That EFC comes from the FAFSA, but in order to "hook" the families, the private schools come up with these generous grants for the freshman year. The EFC probably does not change from year to year because it's coming from the FAFSA, but the bottom line sure changes when the grant vaporizes in the sophomore year.

The parents don't understand that the aid package that they receive is variable based upon discretionary grants given by the private college. They just think that they qualified for all of those grants based upon income/family situation/etc. That is exactly what I thought until you started explaining that the EFC is something that is set by a formula through the FAFSA, and that private schools have discretionary funds. This should be made CRYSTAL clear to parents before they opt for a $$ private college that offers an outstanding grant package to their freshman, but of course it's not.

You really should become a consultant. I know that my mom's friends would pay to have someone like you come to give a speech and answer questions. You shed a lot of light on the mysterious process of financial aid and you'd save a whole lot of people a whole lot of headaches/heartaches/financial aches!!

Thank you for the compliment. I really enjoyed my time in the aid office - it can be very stressful and heart-wrenching, and it's definitely an emotionally exhausting job, but it's always nice to hear someone say "NOW I understand."

Keep in mind the FAFSA is redone each year, so aid packages can vary every year no matter what school a student attends based on how the EFC fluctuates and how the funding/number of eligible students fluctuate at that particular school. But if a private *or* a public school is offering a "grant" or scholarship, be sure to ask if it's a renewable, 4-year grant based on grades or continued financial need - especially if it's not federally funded. It's really important to make sure it's not a one-year thing. A *lot* of scholarships are one-year or one-time only, so always ask if it's a renewable award and what the student needs to do to keep receiving it.

 

[LoveBWVVBR]

Thank you for the compliment. I really enjoyed my time in the aid office - it can be very stressful and heart-wrenching, and it's definitely an emotionally exhausting job, but it's always nice to hear someone say "NOW I understand."

Keep in mind the FAFSA is redone each year, so aid packages can vary every year no matter what school a student attends based on how the EFC fluctuates and how the funding/number of eligible students fluctuate at that particular school. But if a private *or* a public school is offering a "grant" or scholarship, be sure to ask if it's a renewable, 4-year grant based on grades or continued financial need - especially if it's not federally funded. It's really important to make sure it's not a one-year thing. A *lot* of scholarships are one-year or one-time only, so always ask if it's a renewable award and what the student needs to do to keep receiving it.

Hmmm...well, none of these grants would be considered academic merit scholarships from the colleges I don't think. I know for sure that my sister's was just a grant from the college. I doubt that my mother actually asked if it was renewable, since she just assumed that it was given to them based on the FAFSA/EFC. Even if you ask the private college if the grant is renewable, you may get an answer that doesn't jive with what will end up happening. The grant could be "renewable," but that doesn't necessarily mean that it WILL be renewed, KWIM? All of these families had the same level (or greater) of financial need in the sophomore year that they had in the freshman year. The difference seems to be at the discretion of the university. I understand trying to get desireable candidates to choose your school. I don't understand doing that under false pretenses, though (like giving a big grant that will disappear after a year) and not being up front that that is what is happening.

Seriously, the topic of financial aid deserves some sort of insider expose. Maybe someone can convince John Stossel to do a report on it or something People really need the full picture before they 1) count on getting financial aid in the future or 2) count on getting the same grant package from year to year.

 

[LoveBWVVBR]

Let me say this. DH for many years was certified by the government to write the program to determine Financial Aid and I worked in the FA dept of my university while in grad school. We started saving for our future kids college before they were even born.
Choosing the option get a job to help your kid in school seeme like a 100% no brainer!

So would you also say that trying to save for 100% of your child's education is the way for most families to go (assuming that they value a college education for their child)? We save a large amount in DD's 529 every month, and we're about to double that when baby #2 arrives. Honestly, we live on a tight budget to be able to save for college and retirement. We do feel that it's our responsibility to fund 100% of undergrad, and we don't think that financial aid would even be a possibility. We're saving like we'll have to fund the entire thing. I'd be lying if I said that it was easy to live on such a tight budget to make the savings goals, though, and I do wonder about the future when our kids will have more expensive interests that will add to the budget. I always say that the month that we miss the savings goals for college and retirement is the month that I stop being a SAHM, though.

 

[swilshire]

I only read a couple of the responses, but I agree that you're unlikely to get need-based aid for many schools based on just your husband's income. I discovered that even having a little money in the bank makes your estimated contribution ridiculous. Don't even get me started on how any money the kid has in the bank adds to the number.

You can always go online and fill out the FASFA adding your estimated income. Then just correct it without the fake money. The colleges will use the last numbers. You might even be able to start with no schools listed so they would never see the fake numbers.

Even if you won't get any need based aid, a lot of the grants (like our state's lottery fund) require you to fill out the FASFA. The kid gets the same amount regardless of the numbers you put down.

Sheila

 

[phragmipedium]

I only read a couple of the responses, but I agree that you're unlikely to get need-based aid for many schools based on just your husband's income. I discovered that even having a little money in the bank makes your estimated contribution ridiculous. Don't even get me started on how any money the kid has in the bank adds to the number.

You can always go online and fill out the FASFA adding your estimated income. Then just correct it without the fake money. The colleges will use the last numbers. You might even be able to start with no schools listed so they would never see the fake numbers.

Even if you won't get any need based aid, a lot of the grants (like our state's lottery fund) require you to fill out the FASFA. The kid gets the same amount regardless of the numbers you put down.

Sheila

I'd recommend doing your estimates with an EFC estimator like at finaid.org rather than using the actual FAFSA to estimate a hypothetical situation like having a second job. (Unless, of course, your child isn't going to school this year). If your child is actually going to school and you input information that spits out an EFC, and then you make corrections that significantly drop your EFC, that is going to set off flags at a lot of schools. At our school, if we received an updated FAFSA that significantly changed income amounts (especially if it lowered the income), we didn't process the new information right away - we did not necessarily "use the last numbers" we received. Too many families become unhappy, unfortunately, with the EFC number they receive, and go back into the FAFSA to "tweak" it - in dishonest and inaccurate way. A lot of families make numerous FAFSA updates, so much so that it's very difficult to tell which FAFSA reporting had the most accurate information. So instead, we selected the family for "verification" and sent out a letter requesting actual tax documents, etc to verify the FAFSA information and produce a correct EFC based on actual information. For most families this is nothing more than an inconvenience because what they've done is accurate and the changes they made were valid for a variety of reasons, but once selected for verification, your award package is tentative until all steps are completed, and of course subject to change if the information provided differs from the FAFSA. And, at our school, if you refused to complete verification you would not receive any aid (even federal student loans) until you did so. Some schools, especially smaller ones, automatically select everyone for verification, so it might not make a difference - but I just wanted to put that out there.

This is probably not something to worry about if you're a family who (as you should) files early in January with estimated income from the prior year, and then updates in February once you've gotten W2s and have actual tax figures - the changes are likely to be slight, and the school should be able to see that on your first FAFSA you indicated "will file, but have not yet filed" and on your updated application you changed it to "have already filed" - so they will know what you were doing. But I'd be very hesitant to "play" with such a significant jump in income on the FAFSA if your child is actually going to school that year. I'm not sure if it's possible to complete a FAFSA without inputting school codes; I don't think it is - but you may as well just try the EFC estimator at finaid.org instead.