Date post: | 08-Aug-2015 |
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Education |
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What Is Need Based Aid?Need-based aid is determined by your EFC.EFC stands for Expected Family
Contribution, and it is the amount of money the schools expect you to pay each year for your daughter’s education.
EFC is determined when you submit your FAFSA, PROFILE, and/or institutional form.
Need is the difference between the COA (Cost of Attendance) and your EFC.
How Is EFC Determined?Four Basic components:
Parent IncomeParent AssetsStudent IncomeStudent Assets
What are assets? Anything that is not in a retirement account.
Do they consider home equity?Sometimes. Private schools that require the PROFILE do look at home equity.
EFC: Example 1Parents EFC Worksheet
1. Family Members 4 9. Parent 2 Income $100,000.00
2. Students in College 1 10. Deductible IRA, KEOGH, -
and 401(k) payments
3. Age of Older Parent 45 made by parents.
4. Number of Parents 2 11. Federal Taxes Paid 50,000
in Household
12. Parent Assets -
5. Number of Parents 2
working 13. Students Adjusted 6,300
Gross Income
6. Business and Commercial -
Farm Net Worth 14. Student's Taxes Paid -
7. Parent 1 Income $ 150,000 15. Student's Assets -
8. Adjusted Gross Income $ 250,000 16. Parent's Home Equity -
9. Is the business a family $ - 17. State of Residence CT
business with <100 employees?
Approximate FM EFC 56,834
EFC Example 2Parents EFC Worksheet
1. Family Members 4 9. Parent 2 Income $ 70,000.00
2. Students in College 1 10. Deductible IRA, KEOGH, -
and 401(k) payments
3. Age of Older Parent 45 made by parents.
4. Number of Parents 2 11. Federal Taxes Paid 30,000
in Household
12. Parent Assets -
5. Number of Parents 2
working 13. Students Adjusted 6,300
6. Business and Commercial -
Farm Net Worth 14. Student's Taxes Paid -
7. Parent 1 Income $ 80,000 15. Student's Assets -
8. Adjusted Gross Income $ 150,000 16. Parent's Home Equity -
9. Is the business a family $ - 17. State of Residence CT
business with <100 employees?
Approximate FM EFC 25,158
EFC Example 3Parents EFC Worksheet
1. Family Members 4 9. Parent 2 Income $ 70,000.00
2. Students in College 1 10. Deductible IRA, KEOGH, -
and 401(k) payments
3. Age of Older Parent 45 made by parents.
4. Number of Parents 2 11. Federal Taxes Paid 30,000
in Household
12. Parent Assets 150,000
5. Number of Parents 2
working 13. Students Adjusted 6,300
Gross Income
6. Business and Commercial -
Farm Net Worth 14. Student's Taxes Paid -
7. Parent 1 Income $ 80,000 15. Student's Assets -
8. Adjusted Gross Income $ 150,000 16. Parent's Home Equity -
9. Is the business a family $ - 17. State of Residence CT
business with <100 employees?
Approximate FM EFC 32,027
EFC Example 4Parents EFC Worksheet
1. Family Members 4 9. Parent 2 Income $ 70,000.00
2. Students in College 1 10. Deductible IRA, KEOGH, -
and 401(k) payments
3. Age of Older Parent 45 made by parents.
4. Number of Parents 2 11. Federal Taxes Paid 30,000
in Household
12. Parent Assets 50,000
5. Number of Parents 2
working 13. Students Adjusted 6,300
Gross Income
6. Business and Commercial -
Farm Net Worth 14. Student's Taxes Paid -
7. Parent 1 Income $ 80,000 15. Student's Assets -
8. Adjusted Gross Income $ 150,000 16. Parent's Home Equity -
9. Is the business a family $ - 17. State of Residence CT
business with <100 employees?
Approximate FM EFC 26,387
What Are Assets?Cash, Savings, Checking (reported
separately)Stocks, Bonds, Mutual Funds, Investment
Real Estate, anything that is not in a retirement fund
529 Plans are considered parent assets, if they are owned by the parents, and excluded from the formula if they are owned by grandparents. That is, for the Federal Methodology
What Are NOT Assets?Primary ResidenceIRA, SEP, 401K, Annuity, Cash Value of Whole
LifeSometimes the CSS PROFILE will ask
questions about those assets and some schools do include them in the formula
How Are Assets Assessed?Parent’s assets are assessed at a maximum of
5.6% above an Asset Protection AllowanceStudent’s assets are assessed at 20% and
they have no Asset Protection AllowanceAssets in a business are given higher
protection limits
What You Need to File Your FAFSAParent 2013 (2014 when done) 1040 and w’2’sStudent income informationParent and student social security numbersParent and student dates of birthParent and student email addresses*List of the colleges where the student is
applying to schoolYour PIN number (if you already have one)Summary of your asset information
Potential QuestionsMy income in 2014 is significantly different
than 2013, what do I do?The student’s parents are divorced or
separated, who files?What do I do when my taxes are completed?What if my child applied to more than 10
schools?
If a Family is Not Eligible for Aid, Should They Still File the FAFSA?
Yes, if they:Want to Receive a Stafford LoanWant to Receive the TEACH GrantIf the school requires it for consideration for
Merit Scholarships
• James [email protected]
75 New Haven Avenue, Milford, CT 06460www.firstchoicecollege.com(800) [email protected]/FirstChoiceCollegePlacement