Understanding FAFSA Anticipated Family Contribution

[Aurora D]

I'm hoping someone who has been through it can explain this process. My daughter is a senior. She has been accepted at 5 schools, ranging in tuition from in-state at about 20K a year to private at 45K a year(including everything). I just filled out the FAFSA and it gave me an Anticipated Family Contribution of 4800. Is this the amount we're expected to contribute or is it a number for a formula? And how is the difference made up? We're also starting to look into scholarships. We basically live paycheck to paycheck, I can't imagine how we'll come up w/an extra 5K a year. I guess that could include my daughter working part time and contributing also though. Thanks for any advice you can give.

 

[deerhart]

usually yes that is the number that the family is expected to contribute, but the contribution may come in a variety of different ways depending on each school.

When I went our family contribution was close to that and it was made up of student loans, work study, and I and my parents each paid about $2k (just my first year). My tuition each year was over 20k and room and board another 5-7k. My first year was the only year we paid any oop (due to the fact that your student loan amount increases each year until your junior year).

The school I went to NOW has a policy that any student with a family income of less then $60k will NOT have any student loans and everything would be made up of scholarships from the school. It would have saved me about $16k in student loans!

 

[mrsklamc]

That number is what they consider half of your 'disposable' income.

 

[feezle]

The way they do things is ridiculous. I had lived on my own for 3 years and still had to use my parent's income.

 

[lynnanddbyz]

I'm hoping someone who has been through it can explain this process. My daughter is a senior. She has been accepted at 5 schools, ranging in tuition from in-state at about 20K a year to private at 45K a year(including everything). I just filled out the FAFSA and it gave me an Anticipated Family Contribution of 4800. Is this the amount we're expected to contribute or is it a number for a formula? And how is the difference made up? We're also starting to look into scholarships. We basically live paycheck to paycheck, I can't imagine how we'll come up w/an extra 5K a year. I guess that could include my daughter working part time and contributing also though. Thanks for any advice you can give.

I am going through this now too. I am going back to school just started back in Jan. The number is just a number. You will qualify for different amounts of aid at each school based on your number. Your amount will probably be no where near only $4800 out of pocket. She may also qualify for student loans. This amount is also set by your EFC number. The best way to get figures is to just call one of the schools and ask what your number means to that school. Hope that is some help. It is all very confusing.

 

[msmayor]

The Estimated Family Contribution (EFC) is a pure, calculated number based off your income and assets reported on the FAFSA. It is considered the minimum amount you will be expected to contribute out of your OWN assets toward college expenses.

What you must remember is that it is indeed only the MINIMUM, and you may be asked to contribute more than that. It all depends on the financial aid policies of the schools your child applies to and is accepted at.

You also should realize that in many, many instances, "aid" from the schools will come in the form of loans that must be repaid. Stafford and Parent PLUS loans are the most offered.

For example: lets say you're looking at a school where the total cost of attendance is $25,000 and you have an EFC of $4,800. That leaves a "need" of $20,200.

Now if the school is one that meets full need, then your aid package could be a grant of $2,000 which would not need to be repaid, Stafford Loan of $5,500 and PLUS loan of $12,700. All that plus your EFC meets cost of attendance.

The reality in the above situation is that your contribution really does end up being much more than the $4,800 because those loans must be repaid. By you and the student. Multiply those loan amounts by 4 and you'll see just how much that school can cost.

Some schools "gap", meaning they won't meet full need. The school may only offer the Stafford Loan and a small grant, leaving a big gap that despite having an EFC of only $4,800, you have to figure out where the money is going to come from.

The best thing you can do for yourself and your child is to make sure that they apply to at least one 'safety' school...and school you are reasonably certain will provide an acceptance AND one you know you can afford with minimal loans.

 

[peanut12392]

This is our first time going through this too. Our contribution, according to the FAFSA is 22,000 $ per year. If we had that kind of extra money, we would NOT be filling out the FAFSA, we would have it all saved to use for college!

 

[sherry7]

This is our first time going through this too. Our contribution, according to the FAFSA is 22,000 $ per year. If we had that kind of extra money, we would NOT be filling out the FAFSA, we would have it all saved to use for college!

Ditto on that! Our EFC was almost $21,000 per year when we did the FAFSA for DS in 2009. I'm not even bothering with it this year, because it was a complete waste of my time. That's almost 1/4 of our annual income, but we're penalized because of only having 1 child.

To the OP, the answers that everyone else gave you are spot on. In the grand scheme of things $4800 a year for college is really a small amount, even though I realize you said you're living paycheck to paycheck right now. Perhaps your daughter could get a part-time job to make up the difference? Working full time during the summer would be a good option too.

 

[msmayor]

For those with kids in HS, there are calculators on-line that can help you estimate what your EFC will be as a way to (a) get through the shock of the number early, and (b) start preparing for the process of making sure you have a plan to pay for education for your child.

A rough estimate of what your EFC will be is to take about 25% of your adjusted gross income.

Parent assets have a higher "protection allowance" than student assets, and often a jump in savings either up or down won't have that big an impact on what your EFC is. I think its really more income-driven than anything else.

Some schools will take special circumstances into consideration such as extraordinary medical bills or additional support of sick/elderly relatives. But...be aware...mortgage and consumer debt is NOT a special circumstance. You must appeal to an individual school for special circumstances.

Also be aware that while the balance of a 401(k) is not considered an asset for FAFSA purposes, the annual contribution IS considered an available source for paying for college. The reasoning is that you can choose not to put that money into your 401(k) and use it for college instead.

And to add a little more to the whole issue of what you'll pay, there are some schools out there that require a second type of financial aid filing in addition to FAFSA: the CSS/Profile. This application DOES take into account your home equity and retirement funds in determining what you are able to pay for school. Profile schools will require information from both parents, whether you are married or divorced. (FAFSA utilizes only the custodial parent information).

One more thing to consider...if you are divorced and the custodial parent to your college-bound child: if you have re-married, the step-father's information must be included (income and assets) as available to pay for school. Makes no difference that he is not related biologically to the child.

 

[4Seasons]

This is our first time going through this too. Our contribution, according to the FAFSA is 22,000 $ per year. If we had that kind of extra money, we would NOT be filling out the FAFSA, we would have it all saved to use for college!

Don't feel bad, our EFC was (hang on to your hat) $57000!!!
Trust me, we are a very middle income family.

 

[msmayor]

Ditto on that! Our EFC was almost $21,000 per year when we did the FAFSA for DS in 2009. I'm not even bothering with it this year, because it was a complete waste of my time. That's almost 1/4 of our annual income, but we're penalized because of only having 1 child.

To the OP, the answers that everyone else gave you are spot on. In the grand scheme of things $4800 a year for college is really a small amount, even though I realize you said you're living paycheck to paycheck right now. Perhaps your daughter could get a part-time job to make up the difference? Working full time during the summer would be a good option too.

Our EFC is closer to $30K, but we'll fill it out every year for two reasons: first, our daughter's merit scholarship requires that we file one every year to maintain the funding. Second, it is the only way to be eligible for Stafford Loans to cover part of the cost which our daughter IS taking out. We want her to have some 'skin in the game', so to speak...and investment in her own education. Assuming we are financially able, we plan to pay off a good chunk of those loans as her graduation gift.

Folks should be aware that skipping the FAFSA in your freshman year can have consequences in the future...I've heard that if you don't file in your first year, you can be denied Stafford Loans in your soph-senior years as a result, and if your ability to pay out of pocket changes in those years you may regret not being able to get a Stafford Loan.

 

[msmayor]

Don't feel bad, our EFC was (hang on to your hat) $57000!!!
Trust me, we are a very middle income family.

With an EFC that high, I'm guessing there is a business owned in the family. Those assets will send an EFC through the roof.

 

[peanut12392]

4Seasons and sherry7, what did you do?

 

[luvsJack]

I have no clue what anyone's income is, but if anyone thinks their EFC is high for their income--go back over the info you put in with a fine tooth comb. Just hitting one wrong number or putting an answer in the wrong blank can get really affect the EFC. Actually, I would suggest going back over it regardless. One mistake can mean a big difference in what your student qualifies for in loans as well as any other aid.

We have a lot of young students that go through the semester thinking that they do not qualify for any aid, when they or their parents run out of money they come in to ask if we can help. After going over their form we find all kinds of mistakes.

Also, if according to our FA Director; if your child can get through without Parent Plus loans, do so. I don't know anything about them, but apparently they are higher interest that a Stafford loan.

 

[wdwmaw]

Our EFC is closer to $30K, but we'll fill it out every year for two reasons: first, our daughter's merit scholarship requires that we file one every year to maintain the funding. Second, it is the only way to be eligible for Stafford Loans to cover part of the cost which our daughter IS taking out. We want her to have some 'skin in the game', so to speak...and investment in her own education. Assuming we are financially able, we plan to pay off a good chunk of those loans as her graduation gift.

Folks should be aware that skipping the FAFSA in your freshman year can have consequences in the future...I've heard that if you don't file in your first year, you can be denied Stafford Loans in your soph-senior years as a result, and if your ability to pay out of pocket changes in those years you may regret not being able to get a Stafford Loan.

I second this, a lady I work with did not fill hers out last year and as her son went back to school last fall the loans could not be made available till they had a new FASFA on file. Her accountant advised them to just do it when you do taxes for as long as your child is in school.

 

[4Seasons]

We own some rental properties, all of which have mortgages and other expenses. They don't seem to take that into account. Yes I own my own business as well (travel agency) but there are no real "assets" to that (other than computer, printer and basic office furniture).

What have we done? Other than cry, we've just come to the realization our dd's 1st year in college will likely need to be community college.
She has not taken the college planning task seriously, I've done FAR more work/research than she has and she has not followed up on alot of scholarship information. She missed the deadline to apply for scholarship funds for the school she wants to attend and was accepted to (Virginia Commonwealth). Tuition would be out of state for us so it's almost double the cost for the total package (tuition, room/board) than for an in-state school in MD.
It's a real shame because she scored 2000 on her SAT's but just hasn't shown the ambition to do anything about it.

 

[msmayor]

We own some rental properties, all of which have mortgages and other expenses. They don't seem to take that into account. Yes I own my own business as well (travel agency) but there are no real "assets" to that (other than computer, printer and basic office furniture).

What have we done? Other than cry, we've just come to the realization our dd's 1st year in college will likely need to be community college.
She has not taken the college planning task seriously, I've done FAR more work/research than she has and she has not followed up on alot of scholarship information. She missed the deadline to apply for scholarship funds for the school she wants to attend and was accepted to (Virginia Commonwealth). Tuition would be out of state for us so it's almost double the cost for the total package (tuition, room/board) than for an in-state school in MD.
It's a real shame because she scored 2000 on her SAT's but just hasn't shown the ambition to do anything about it.

That's because owning the rental properties is considered a "choice", and therefore they don't care about the expense part of it...only that you own an asset that may be made available for college funding.

As for your daughter not taking the initiative, you're right...it is a shame if she has the stats to get merit money to attend a good school. This may be your opportunity then to say to her that your hard-earned money will not be wasted, and when she's serious about her college education you'll be serious enough to cover more than the cost of community college.

 

[wdwmaw]

Our DS is also a senior this year and our EFC # came back $14,642. DH works for Toyota and we all know how that is going. DS has worked very hard and has been accepted to many schools. We talked and just does not want to start his life in debt. He has decided to attend BCTC ( Bluegrass Community college on Universtiy of Kentucky campus). His goal is a degree in Agriculture so he will be attending UK for that his junior/senior. To our surprise, BCTC has a new program to get students GenEd certified by working with UK so he will be ready to transfer his junior year with no problem or surprises. The bonus
~ 1/2 tuition (BCTC about $4000 per year, UK about $8000 per year)
~ small class size
~ will work with UK advisors
~ can live at home and keep his current job
~best part, if he keeps a 3.5 GPA he will keep his BCTC tuition rate his final 2 years at University of Kentucky

Check with some of your public schools and see if programs exist like this.

 

[sherry7]

4Seasons and sherry7, what did you do?

He is going to community college and commuting from home, which is a huge savings over a state school. As of now, he's planning on doing a 2 1/2 year Radiology Tech program. If that doesn't change, he can graduate from the community college. Honestly, I hope his plans don't change, because if they do he's going to have HUGE student loans...and we only qualify for the unsubsidized type.

Maybe our EFC will change (for the better) because we are having another child this Spring. People ask me why we waited so long in between kids...I should reply it's because it's going to take us nearly 20 years to financially recover from sending the first one to college, lol!

 

[4Seasons]

As for your daughter not taking the initiative, you're right...it is a shame if she has the stats to get merit money to attend a good school. This may be your opportunity then to say to her that your hard-earned money will not be wasted, and when she's serious about her college education you'll be serious enough to cover more than the cost of community college.

Yes we've already told her that, hopefully it will sink in. She will need to take
a vested interest (financial and otherwise) in her education and take it alot more seriously than she is now before we make any major $$ committments.