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Calculating the EFC. Mandy Peterson March 8, 2007. Need Analysis Overview. Need Analysis Overview/Financial Need. Need analysis. Overall process of determining a student’s financial need and eligibility for certain programs. Generate the EFC. - PowerPoint PPT Presentation
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Calculating the EFC
Mandy PetersonMarch 8, 2007
Need Analysis Overview
Need Analysis Overview/Financial Need
Need analysis. Overall process of determining a student’s financial
need and eligibility for certain programs. Generate the EFC.
EFC is a measurement of a family’s ability to contribute toward education cost.
Need Analysis Overview/Financial Need
Need Equation:
Cost of Attendance
-- Expected Family Contribution
Financial Need
Need Analysis Overview/Financial Need
General elements of need analysis. Information reported by the family.
Income. Number of dependents. Number of family members attending college. Assets. Marital status of the student. Age of older parent of a dependent student.
Need Analysis Overview/Financial Need
General elements of need analysis. Items considered by federal methodology prior to
EFC calculation. Additional expenses incurred. Income and asset protection allowance.
Need Analysis Overview/Financial Need
General Elements of need analysis. Dependency status.
Independent-student definition. Age 24 or older as Dec. 31 of the award year. Orphan or ward of the court. Veteran. Graduate or professional student. Married student. Student with legal dependents. Person with unusual circumstances. Active-duty members of the armed forces.
Need Analysis Overview/Financial Need
General elements of need analysis. Dependency status.
Dependent-student definition. All other students not referenced in the previous
slide. Must use parental information in determining
EFC.
Need Analysis Overview/Financial Need
Federal methodology. Only methodology for determining EFC. Three models under FM. Three formula options exists under FM.
Need Analysis Overview/Financial Need
Components of federal methodology. Regular formula.
Income. Allowance against income. Assets. Education savings and asset protection allowance.
Need Analysis Overview/Financial Need
Components of federal methodology. Simplified-needs test.
Assets not considered. Eligibility for simple formula.
Benefits from a federal means-tested program. AGI less than $50,000.
Need Analysis Overview/Financial Need
Zero expected contribution. AGI below $20,000. Parents of dependents must be eligible to file 1040A
or 1040EZ or not be required to file a federal tax form.
Need Analysis Overview/Financial Need
Guidelines for divorced or separated parents. Rule 1. Rule 2. Rule 3.
Guidelines for remarried parents.
Need Analysis Overview/Financial Need
Definitions in Need Analysis (pages 5 – 7)
Race to Calculate the
EFC
EFC Calculation What is an EFC? Why do you need to understand the EFC formulas?
EFC Calculation Which EFC worksheet should be used? What is Mario’s EFC?
0
40,550
40,550
0
0
0
40,550
41,500
40,55017,500
24,000
3,394
406
1,339
1,836
18,680
6,125
3,200
28,855
40,550
28,855
11,695
11,695
2,573
1
2,573
11,695
5,000
5,000
5,000
0
0
0
5,000
0
5,000
0
0
383
0
3,383
5,000
3,383
1,617
809
2,573
809
3,382
Calculating the EFC
Mandy PetersonMarch 8, 2007
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