Session 33.pptVIP

Session 33 Expected Family Contribution (EFC) Deborah Tarpley Marianna Deeken How is EFC Determined? Three Federal Methodology (FM) models Dependent student Independent student Independent student with dependents other than a spouse How is EFC Determined? Three distinct FM formulas Regular Simplified Automatic zero Alternate Formulas Simplified Formula Assets not considered Parents’ AGI or earnings from work $50,000 and Parents are not required to file IRS form 1040 Automatic Zero EFC is automatically zero if Parents’ AGI or income earned from work is $20,000 or less and Parents are not required to file IRS form 1040 Independent Students Independent Students without Dependents other than a spouse Applies to single and married independent students May NOT qualify for automatic zero EFC May qualify for simplified formula Student (and spouse) AGI or earnings from work $50,000 and Student (and spouse) not required to file IRS form 1040 Independent Students Independent Students with Dependents other than a Spouse Analysis looks much like that of parents of dependent students EFC automatically zero if Student’s (and spouse’s) AGI or income earned from work is $20,000 or less and Student (and spouse) not required to file IRS form 1040 Independent Students May qualify for simplified formula Student (and spouse) AGI or earnings from work $50,000 and Student (and spouse) not required to file IRS form 1040 Simplified Automatic Zero Means-Tested Federal Benefit Programs Students also qualify for simplified formula or automatic zero if, in addition to meeting relevant income thresholds, they or their parents received benefits from a means-tested federal benefit program SSI TANF WIC Food Stamps Free or Reduced Price Lunches Factors that affect EFC Number in Household Number in College Taxed and Untaxed income Taxes paid Investments Age of the older parent Number of wage earners Principles of Need Analysis Family has primary responsibility to pay for educational costs