Is your EFC too high?
I have been hearing from families of high school seniors who have calculated their preliminary EFC or Expected Family Contribution and are now panicking. They can’t believe how high their EFC is.
Your EFC can provide a decent idea of what a college will assume you could pay for one year of college. If you aren’t sure what an EFC is, here are some of my previous college blog posts on the subject:
Maximizing Financial Aid Awards
There usually is a reason why a family’s EFC is high even if initially it seems puzzling.
I was talking to a mom from Northern California last week, for instance, who is a massage therapist and her husband makes an average salary. They owe more on their home than it’s worth and they don’t have lots of money in the bank.
Knowing all this, it seemed bizarre that the family’s EFC was in the $40,000’s. The EFC, however, made sense when the mom mentioned that she and her husband own a rental property that’s got $500,000 in equity.
Up until now the family’s high EFC didn’t hurt because their son, who attends St. John’s University, has received athletic and merit scholarships from the school. The mom, however, is now stressing because their daughter is a high school senior and they can’t afford to pay full price for their daughter, who would love to attend a college outside California.
The Good News
I told the mom that her EFC would drop with two children in school simultaneously. If both children attended schools that just use the FAFSA, The EFC for each child would drop by half. So if the previous EFC was $48,000 for her son, with two in school the EFC for each child would be $24,000.
With that sort of EFC, the family could qualify for need-based aid for their daughter from expensive private colleges. Mostly likely, the parents would have to pay $24,000, but they could end up with $25,000 or more in need-based aid from expensive private colleges.
When the son graduates, however, the family’s EFC will rise again so it makes sense for the girl to look for schools that would also give her merit aid, which she can hold onto no matter what her EFC is.
More on EFCS
In my next post, I’m going to keep writing about Expected Family Contributions.
Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller and a workbook, Shrinking the Cost of College: 152 Ways to Cut the Cost of a Bachelor’s Degree. Follow her on Twitter.
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Thanks for this info, Lynne. You mention schools “that just use the FAFSA.” Does the CSS profile form generally calculate an even higher EFC?
Thanks for this post. As a counselor in private practice, I can relate to this.
That is not our current case. We had one in college last year and the EFC was 15,000 and now this year with two in college our EFC is 11,000 for child #1 and $10,000 for #2. This is a big surprise to us as everyone is telling us it will be cheaper so… why it is more? Went from $15,000 to $21,000. Our income had not changed – actually income was less this year and we have no extra like a $500,000 rental property, no stocks, no trust, no money in the bank, etc… – only 1 401K and it is pretty equal to last years numbers so… can you explain this to me?? Thus far we have not seen ANY real benefit of having two in college at the same time.
If your income stayed the same and nothing else changed, I’d suggest that you made a mistake on the FAFSA. I’d go over it carefully because your EFC should drop by roughly half. You can also ask questions through the FAFSA hotline.
Good luck.
Lynn O’Shaughnessy
We got an interesting insight on the two kids in college issue during a visit with financial aid at Oxy this spring. We were concerned because our daughters are just one year apart in school. The aid officer eased our fears by indicating that Oxy would expect half of the EFC the next year, assuming both kids were at similar schools. But, she indicated this is not true for all schools – even those with generous financial aid. She had worked at Pomona before Oxy. Apparently Pomona’s position is that it expects 60 percent of EFC if you have two in college – meaning that you either must convince the other school to take 40 percent or you must come up with 110 percent of your EFC. So, this is a question worth asking if you expect to have two kids in college at the same time, and even if your kids are looking at schools that generally offer good aid packages.
Hi John,
Thanks for sharing. That’s great inside info!
Lynn O’Shaughnessy