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Chuck Moore, CCFC, CAMC, CAFC Louisville, Kentucky 502-721-8646 ▪ [email protected] www.collegeliteracyacademy.com www.gearuped.com. How The EFC Is Calculated. What Is College Financial Aid.

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Chuck Moore, CCFC, CAMC, CAFC

Louisville, Kentucky

502-721-8646 ▪ [email protected]

www.collegeliteracyacademy.com

www.gearuped.com



What Is College Financial Aid

Student financial aid refers to funding intended to help students pay educational expenses including tuition and fees, room and board, and books/supplies, and miscellanious costs, for education at a college, university, or private school.

Financial aid may be classified into two types, merit-based or need-based.


Where Does Most College Financial Aid Come Form

Most student aid is provided by the federal government. Students received more than $109 billion in federal aid during the school year of 2011–2012. Most federal student aid is awarded as grants and low-interest loans.


The Financial Aid Process

FAFSA and CSS Profile


  • The FAFSA cannot be filed until after January 1 of the student’s senior year of high school. Furthermore, it must be filed each year the student is seeking financial assistance while in college.

  • The Federal Methodology Formula that calculates the family’s EFC is based mainly on the parents’ and student’s income and assets minus certain deductions and allowances.





Income Protection Allowance Example

Number In Household 4

Number In College 1

AGI: $85,000

Income Protection Allowance $26,290

Available Income $58,710



Asset Protection Allowance Example

Oldest Parent 46

Allowance $37,100

Exposed Assets $50,000


Asset Protection Allowance Example

Oldest Parent 46

Exposed Assets $50,000

Allowance (minus)$37,100

$12,900

$12,900 X 5.65%

Adjusted Available Assets $729

($729 Is Added Into Your Adjusted Available Income)


Employment Allowance Example

Number Of Parents Working 2

Lowest Earner Amount $26,000

Employment Allowance % 35%

Maximum Allowance $3,500

(Single Wage Earners Do Not Get An Employment Allowance)


Employment Allowance Example

Number Of Parents Working 2

Lowest Earner Amount $26,000

Employment Allowance % X 35%

$9,100

Maximum Allowance $3,500

(Single Wage Earners Do Not Get An Employment Allowance)


Employment Allowance Example

Number Of Parents Working 2

Lowest Earner Amount $7,000

Employment Allowance % X 35%

$2,450

Maximum Allowance $2,450

(Single Wage Earners Do Not Get An Employment Allowance)


Tax Allowance Example

Federal Taxes $ 5,250

Social Security Taxes $ 6,120

State Taxes 4% $ 3,200

Total Tax Allowance $14,570


Total Allowance

Income Allowance $26,290

Asset Allowance $ 729

Employment Allowance $ 3,500

Tax Allowance $14,570

Total Allowances $45,089


Adjusted Available Income Of Parents

Total Income $85,000

Total Allowances -$45,089

Adjusted Available Income $39,911



Adjusted Available Income Of Parents

Available Income $39,911

Adjustment Factor - 30,901

Adjustment Factor Left $ 9,010


Adjusted Available Income Of Parents

First $30,901 Assessed $8,358

Second $9,010 Assessed 47% +4,235

EFC Of Parents $12,593


Student’s EFC

First $6,130 - $0 (50% thereafter minus taxes)

Assets 20% (No Asset Protection Allowance)


Student’s EFC

Student’s Income $ 3,850

Student’s Assets $10,000


Student’s EFC

Student’s Assessment From Income $3,850 - $6,130 = $0

Student’s Assets $10,000 X 20% = $2,000

Students EFC = $2,000


Total Family’s EFC

Parents’ EFC $12,593

Student’s EFC + 2,000

Family’s EFC $14,593


Student’s Financial Need

Total Cost Of Attending $18,000

EFC Of Family - 14,593

Financial Need $ 3,407


Student’s Attends Private University

Total Cost Of Attending $38,000

EFC Of Family - 14,593

Financial Need $23,407


BIG PROBLEM

How Is This Family Going To Pay Their Expected Family Contribution Of

$14,593

This is14%of Gross Income or;

17%of Net Income After Taxes


Chuck Moore, CCFC, CAMC, CAFC

Louisville, Kentucky

502-721-8646 ▪ [email protected]

www.collegeliteracyacademy.com

www.gearuped.com


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