Made 100K last year. 100K saved. EFC OFF the ROOF?

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vasyaiya

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Will I be able to get any loans with those numbers?
My EFC will probably be sky high. And because of that will I be even able to qualify for unsubsidized loans at all? I don't want to blow all savings on tuition and expenses the first 2 years, but rather extend it over 4 year period and borrow some money.
Any similar examples, ideas, or suggestions?
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Unsubsidized stafford loans are not need-based, so you can always get those regardless of your EFC. The same is true for GradPlus loans. You can always borrow. :)
 
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yadayadadude said:
Why?
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For several reasons. Would like to keep some money for emergency, for residency interviews, fees, unredictable expences. I have a family and kids.
My wife wants to buy a house as well.
 
Doctor Bagel said:
Unsubsidized stafford loans are need-based, so you can always get those regardless of your EFC. The same is true for GradPlus loans. You can always borrow. :)
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Need based, up above.
Exactly, what if I will not have a need after my EFC will be 60 thousand and all expences will total to 45. What will happen then?
 
vasyaiya said:
Need based, up above.
Exactly, what if I will not have a need after my EFC will be 60 thousand and all expences will total to 45. What will happen then?
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Oops, meant not need-based. I need some coffee. Anybody can get the not need based loans. Sorry about posting the wrong thing.
 
For 6 fig's: Income earned is difficult to shield for FAFSA purposes, unlike it is with 1040's where you can shelter it in various ways (e.g. 401k and other retirement instruments). 100k shouldn't hurt too much, esp if you're going to a private school or to a public school other than say TX. But realize you'd need to add your wife's income as well and report that.

After the initial hit, there are good ways to shield. Here are some most of us use:

1) Buy a house
2) Max retirement funds

Left over money, certainly keep it fluid. Again you'd have to report it, but liquid assets don't hurt as much as raw income does.
 
Twitch said:
For 6 fig's: Income earned is difficult to shield for FAFSA purposes, unlike it is with 1040's where you can shelter it in various ways (e.g. 401k and other retirement instruments). 100k shouldn't hurt too much, esp if you're going to a private school or to a public school other than say TX. But realize you'd need to add your wife's income as well and report that.
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Does it actually get shielded by contributing to retirement accounts? That's what I always thought, but I was just filling out my FAFSA worksheet (not the actualy FAFSA yet) and on FAFSA Worksheet B, it looks like you add back the amount you contributed to tax-deferred retirement accounts (not included in AGI.) The wording of the item is:

"Payments to tax-deferred pension and savings plans (paid directly or withheld from earnings), including but not limited to, amounts reported on the W-2 Form in boxes 12a through 12d, codes D, E, F, G, H, and S."

Does this not get "held against you," even though you evidently have to report it?
 
Sol Rosenberg said:
Does it actually get shielded by contributing to retirement accounts? That's what I always thought, but I was just filling out my FAFSA worksheet (not the actualy FAFSA yet) and on FAFSA Worksheet B, it looks like you add back the amount you contributed to tax-deferred retirement accounts (not included in AGI.) The wording of the item is:

"Payments to tax-deferred pension and savings plans (paid directly or withheld from earnings), including but not limited to, amounts reported on the W-2 Form in boxes 12a through 12d, codes D, E, F, G, H, and S."

Does this not get "held against you," even though you evidently have to report it?
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I looked really quickly at the calculations, and I think they include those retirement contributions into your income. From what I could gather from the formulas (and admittedly I didn't look at it really thoroughly), it will be counted in calculating your EFC.

To find out for sure, go to this site and download both the 2008-09 EFC calculation pdf and the 2008-09 worksheets. Your income for EFC purposes is basically worksheet A + B - C.

http://studentaid.ed.gov/PORTALSWebApp/students/english/publications.jsp
 
Thanks for the link. Seems pretty clear that contributions to retirement accounts are counted as income. I guess my confusion arose from the fact that retirement account balances are not counted as investments.
 
Sol Rosenberg said:
Thanks for the link. Seems pretty clear that contributions to retirement accounts are counted as income. I guess my confusion arose from the fact that retirement account balances are not counted as investments.
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Yep this is true, that's why I was saying "after the initial hit" of earning the income.
 
Tachymeter said:
My EFC = $0. I'm poor.:(
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why do you think your EFC is 0 and mine is like 7k???

i made like 25k, living on my own, paying back undergrad loans.. so only saved a few thou so far...

put in my dads info (single parent) , cause i thought this was normal for med scohols to determine the real need based aid, and i wasnt worried cause he is on disability and only made 14k total all year.. and for some reason i now have a EFC of 7 thousand, and im freaking out cause i wont be able to afford paying that....?!?!
 
Sandlot1892 said:
why do you think your EFC is 0 and mine is like 7k???

i made like 25k, living on my own, paying back undergrad loans.. so only saved a few thou so far...

put in my dads info (single parent) , cause i thought this was normal for med scohols to determine the real need based aid, and i wasnt worried cause he is on disability and only made 14k total all year.. and for some reason i now have a EFC of 7 thousand, and im freaking out cause i wont be able to afford paying that....?!?!
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Have you read the countless other threads on EFC? First of all, your parental information has no bearing on your EFC when you are going to medical school. Second, it is a meaningless number in terms of the maximum amount of loans you can get. It does not mean what they expect you to pay. Since your EFC is 7000 it just means you are eligible for 1500 out of the 8500 subsidized stafford loans you would have been able to get. You will still be eligible for the maximum of unsubsidized loans no matter what your EFC is. If your EFC is anything above 8500 it makes no difference whether it is 8500 or 100000.
 
TMP-SMX said:
Have you read the countless other threads on EFC? First of all, your parental information has no bearing on your EFC when you are going to medical school. Second, it is a meaningless number in terms of the maximum amount of loans you can get. It does not mean what they expect you to pay. Since your EFC is 7000 it just means you are eligible for 1500 out of the 8500 subsidized stafford loans you would have been able to get. You will still be eligible for the maximum of unsubsidized loans no matter what your EFC is. If your EFC is anything above 8500 it makes no difference whether it is 8500 or 100000.
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I agree on the parental info wrt EFC. However, as it relates to the sub $$, he'll actually get the full $8500 and then some of the others loan instruments available. Why? Because COA is >> then the difference b/w EFC and the max sub limit.

Here is an example. I goto a state school in TX (one of the least expensive schools in the country). My EFC is > $8500. I typically always get the full sub and then what ever money remains in the pot for others (e.g. Perkins and other grants).

wrt to unsub, yep that's correct.

Hope this helps.

:luck:
 
I was under the impression that an EFC reduces eligibility for subsidized stafford loans, however reading random other threads it seems to not be true. In fact, it seems that EFC is irrelevant to a lot of schools and perhaps the federal government apparently.

Looking at random websites I'm thinking it may be COA-EFC that is the maximum subsidized you can take out. If that is the case, then just about every medical student is eligible for the max and I'm not seeing any reason for a FAFSA. So as long as your EFC is below 30,000 you will be eligible for the full $8500 in subsidized loans. Of course it seems like the EFC is irrelevant for graduate students for other types of need-based aid as the schools rely mostly on your parental income.

http://www.sparknotes.com/college/financial/page1.html
 
TMP-SMX said:
I was under the impression that an EFC reduces eligibility for subsidized stafford loans, however reading random other threads it seems to not be true. In fact, it seems that EFC is irrelevant to a lot of schools and perhaps the federal government apparently.

Looking at random websites I'm thinking it may be COA-EFC that is the maximum subsidized you can take out. If that is the case, then just about every medical student is eligible for the max and I'm not seeing any reason for a FAFSA. So as long as your EFC is below 30,000 you will be eligible for the full $8500 in subsidized loans. Of course it seems like the EFC is irrelevant for graduate students for other types of need-based aid as the schools rely mostly on your parental income.

http://www.sparknotes.com/college/financial/page1.html
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That's correct: You are eligible for need-based aid for the amount of your COA above and beyond your EFC. That is your "need." So, you still want to try to minimize EFC to maximize need.
 
This thread has been very informative but I just want to clarify something
I hope you guys still check this thread:

There was some disagreement about whether or not Need = COA - EFC. I think it does and the Sparknotes link posted in one of the posts above also claims that to be the case.
If Subsidized Stafford Loans are need based then as long as COA - EFC is greater than 8500, you should get the full 8500 - am I right in thinking this?

Or is it the case that if your EFC is 8.5k or greater than you simply dont qualify for the subsidized Stafford loans. The first seems more likely - I'm wondering if anyone knows from actual experience.

Also, I always thought it mattered how early you do the FAFSA. If everyone gets the full Subsidized if their EFC-COA is greater than 8.5k, then whats the difference between me filling it out Jan 1 and me filling it out April 1.

Thanks a lot, I'm going to fill out FAFSA for the first time so just wanted to clarify a few things.
 
Your "need" is your COA less your EFC.
For example, your COA is $28,500 (tuition, fees, rent, food, travel) and your EFC is 10,000 and you were not awarded any other need based funds (grant, scholarship, perkins, hpsl etc), you would be eligible for $8500 sub and the other $20,000 would be unsub. The combo of aid cannot exceed your COA and an unsub can replace your EFC.
If your COA was $28,500, EFC of 10,000 and you received a grant of $10,000 you'd be eligible for $8500 sub and an unsub of $10,000. The combo of all the aid is not more than your COA. The COA-EFC (need) is 18,500 and is met by the sub and grant.
If you had a cost of $28,500, EFC of 10,000 and had a scholarship for $15,000 then your sub max would be $3,500 sub and unsub of $10,000. COA-EFC (need) is 18,500 and out of that, 15,000 has been met by something else need based so your eligibility for sub is reduced.
If you had a cost of $28,500 and EFC of 28,500 you'd have 0 need but could borrow an unsub of $28,500.
Hopefully that clarified and made sense.
 
AMDFAO said:
Your "need" is your COA less your EFC.
For example, your COA is $28,500 (tuition, fees, rent, food, travel) and your EFC is 10,000 and you were not awarded any other need based funds (grant, scholarship, perkins, hpsl etc), you would be eligible for $8500 sub and the other $20,000 would be unsub. The combo of aid cannot exceed your COA and an unsub can replace your EFC.
If your COA was $28,500, EFC of 10,000 and you received a grant of $10,000 you'd be eligible for $8500 sub and an unsub of $10,000. The combo of all the aid is not more than your COA. The COA-EFC (need) is 18,500 and is met by the sub and grant.
If you had a cost of $28,500, EFC of 10,000 and had a scholarship for $15,000 then your sub max would be $3,500 sub and unsub of $10,000. COA-EFC (need) is 18,500 and out of that, 15,000 has been met by something else need based so your eligibility for sub is reduced.
If you had a cost of $28,500 and EFC of 28,500 you'd have 0 need but could borrow an unsub of $28,500.
Hopefully that clarified and made sense.
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Thanks a lot - that did help.

And as per filing FAFSA earlier? Is that for getting Perkins loans and other grants? and does filing FAFSA earlier or later not affect the Stafford?
 
Filling out the FAFSA later has no bearing on stafford or grad plus loans. It does matter for the limited funds of need-based aid such as grants and scholarships along with Perkins loans.
 
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