Note: If, like me, you went to college some time ago, you may be shocked by how few assets are protected these days. Nothing can be done about it unless Congress acts though, so you might want to give your representatives a call. Third , the formula now wants to know what your income and assets are. If you have a plan college savings account though, multiply the value of that by 0.
Add this number or those numbers to those from the first two steps, and you should have something approximating your EFC — unless your family situation is unusually complex. These are schools that have their own aid money to give away; most, though not all, are highly selective and quite wealthy. The CSS Profile can never be used to determine your eligibility for federal aid.
And some of it may seem really irrelevant. It may not even use all of this information in its formal calculations. Why ask, then? This is because they have some discretion over how aid is distributed and might end up being able to give a little more to a family with strong income but low retirement savings, for example.
Schools say this lets them better take into account variable income. That can work in your favor if you have unusually low income one of those years, or it can work against you if your income is atypically high. It's intended to cover those expenses that all working parents have, such as buying lunch and commuting. The number you've reached based on the calculations above is called your Available Income AI and is intended to represent how much of your income can be considered for college costs.
Add up total parent assets. Include all cash, bank accounts, net investments, and net real estate, but don't include your primary home or your retirement accounts. This number is based on the age of the older parent and is intended to protect an amount of your assets that you have saved for emergencies or college costs. This calculation ends up protecting most of your remaining assets for other needs, which is good news.
The number you've reached here is your Contribution from Assets. There's a complicated table that provides you this number. You'll divide that number in half if you have two children in college at once.
The resulting number is your Parent Contribution. Set that number aside. Use any income received in the year, regardless of whether or not the student paid taxes on it. This number increases a bit each year. Two female students reading a college planning brochure in the campus library.
Two female students talking in the campus library. Get2College staff members against a brick wall. Student and Staff Member, sitting across a desk from each other, in a College Planning meeting. Total allowances are calculated by adding the following:. Use Table B1.
The percentage varies according to the state. Families with two working spouses have extra expenses that must be considered, such as housekeeping services, transportation, clothing and upkeep, and meals away from home. For students who qualify for the simplified formula, there is no contribution from assets.
The net worth of a business or a farm is adjusted to protect a portion of the net worth of these assets. Use Table B3 to calculate the amount to be used.
This is done to protect a portion of assets that may be needed for purposes other than education, such as emergencies or retirement.
Discretionary net worth can be less than zero. If the student qualified for the simplified formula, the contribution from assets is excluded from the calculation of the EFC. The standard EFC is for a nine-month enrollment period. If the student will be enrolled for less than nine months, the EFC is simply prorated by dividing it by nine and then multiplying the result by the number of months the student will be enrolled.
For an enrollment of more than nine months, however, the EFC remains at the nine-month amount. The EFC for an independent student with dependents other than a spouse is calculated using the information for the student and spouse provided on the FAFSA. The formula is almost the same as the formula for the parents of a dependent student.
There are three basic steps. Finally, the EFC is calculated using the available income, the contribution from assets, and the number in college. These allowances account for certain nondiscretionary costs, such as taxes and basic living expenses, and represent a minimum level of support.
The formula assumes that the remaining income is available for discretionary purposes, including paying for a postsecondary education. Use Table C1. This allowance is a percentage of the total income and approximates the average amount paid in state and other taxes. Use Table C3. This allowance provides for the basic living expenses of a family. If a student is married and only the student or the spouse but not both reports an income earned from work, the allowance is zero.
The net worth of a business or farm is adjusted to protect a portion of these assets. Use Table C4 to calculate the amount to be used. If the contribution from assets is less than zero, it is set to zero. This is the final step in determining the EFC for the independent student with dependents other than a spouse.
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