How Much Will YOU Have to Pay for College

HomeFinanceFinancial aidHow Much Will YOU Have to Pay for College?This page may contain affiliate links.Nov 24, 2019 Your child is not a senior, and youre wondering, Why do I need to worry about tuition costs and estimating my expected family contribution? Cant I wait a few years? NO.Dont wait! The more information you have, the better decisions youll be able to make. And talking about how much you can afford to pay for college needs to happen sooner, rather than later.It all boils down to your EFC (expected family contribution). Your EFC is the minimum amount that colleges will expect you to pay, on a yearly basis. If a familys EFC is less than the cost to attend a college, the student qualifies for need-based financial aid. How to Calculate Your EFC This is your familys contribution (Dont wait! Heres how to estimate it.) Your EFC is calculated from the information you submit on the FAFSA and CSS forms. There are two methodologies used to calculate EFC: Federal and Institutional. The FAFSA uses the Federal methodology. In addition to the FAFSA, more selective schools use information from the CSS Profile form, which uses the Institutional method. Federal Methodology (FM) This calculation is used to determine your EFC for need-based only federal and state grants, loans, and work study. (Many states and colleges also use this calculation to award aid.) Basically, the regular form of this formula takes what you and your child own (non-retirement savings only, house equity is not included) and combines it with you and your childs adjusted gross income (from your previous years tax return). The formula uses tables to determine how much of your assets and income can be used for college and factors in number of household members and number of other children in college Institutional Method (IM) This calculation is used to determine how much money accepted students receive from a colleges own endowment. There are differences in the way the FM and IM are calculated, with some of the major differences being that IM includes different types of assets in their EFC calculation, such as: home equity, college savings accounts of siblings, scholarships, and assets of a non-custodial parent. For both methods, parents are expected to contribute a maximum of 5.6% of their assets, while a student is expected to contribute 20 25% of their total assets towards college costs. If youre really interested in a detailed comparison of the two methods, the College Board gives a good summary. Remember, with the same EFC, a student may be eligible for financial aid at one school and not at another. A students eligibility is based on their EFC relative to the cost of the college:COA (cost of attendance) EFC = Financial Need. Heres a simplified example (based on income only): parents have a combined income of $180,000, with three dependent children. Under the FM their EFC is approximately $42,000. At a private, elite college costing $60,000, the student would qualify for $18,000 a year in need-based aid. But at a state university costing $20,000 per year, the same student would not qualify for aid. One last thing to keep in mind colleges are not obligated to meet all your childs financial need. Colleges have limited financial aid budgets and tend to offer the most aid to those students who meet their specific enrollment goals (e.g. improve the womens hockey program or the debate team). If the college does not meet all of your childs needs, then you have been gapped and you are responsible for finding sources to fill the gap. Schools That Use the CSS Profile American University Amherst College Bard College Bates College Baylor University Bennington College Bentley University Berklee College of Music | Berklee Boston College | BC Boston University | BU Bowdoin College Brandeis University Brown University Bryn Mawr College Bucknell University California Institute of Technology | Caltech Carleton College Carnegie Mellon University | CMU Case Western Reserve University Catholic University of America | CUA Claremont McKenna College | CMC Clark University Colby College Colgate University College of the Holy Cross | Holy Cross College of William Mary | William Mary College of Wooster Colorado College Columbia University Connecticut College Cornell University Dartmouth College Davidson College Denison University DePauw University Dickinson College Drexel University Duke University Elon University Emerson College Emory University Fairfield University Fordham University Franklin and Marshall College | FM Furman University George Washington University | GW Georgetown University Gettysburg College Grinnell College Hamilton College Hampshire College Harvard University Harvey Mudd College | HMC Haverford College Hobart and William Smith Colleges | HWS Ithaca College Johns Hopkins University | JHU Kenyon College Lafayette College Lawrence University Lehigh University Loyola University Maryland Macalester College Massachusetts Institute of Technology | MIT Minerva Schools at Keck Graduate Institute Mount Holyoke College Muhlenberg College New York University | NYU Northeastern University Northwestern University Oberlin College Occidental College Pitzer College Pomona College Principia College Providence College Reed College Rensselaer Polytechnic Institute | RPI Rhode Island School of Design | RISD Rhodes College Rice University Sacred Heart University | SHU Santa Clara University Scripps College Skidmore College Smith College Southern Methodist University | SMU St. Anselm College St. Edward’s University St. Olaf College Stanford University Stetson University Stevens Institute of Technology Stonehill College Swarthmore College Syracuse University Texas Christian University | TCU Trinity College Trinity University Tufts University Tulane University Union College (New York) University of Chicago University of Denver University of Miami University of Michigan University of North Carolina at Chapel Hill | UNC University of Notre Dame University of Pennsylvania | UPenn University of Richmond University of Rochester University of San Francisco | USF University of Southern California | USC University of Virginia | UVA Vanderbilt University Vassar College Villanova University Wake Forest University Washington and Lee University Wellesley College Wheaton College (Massachusetts) Whitman College Williams College Worcester Polytechnic Institute | WPI Yale University So, dont leave this post without finding out your familys EFC now!