Calculating the EFC 2018 WASFAA Conference Agenda EFC 101 What is the EFC? 9 month Alternate Federal Methodology Formulas Regular, Simplified and Auto-Zero EFC Primary and Secondary EFCs Resources Need Analysis An objective means of measuring the strength of a family s resources and its ability to pay for college costs. Cost of Attendance Expected Family Contribution = Financial Need Handout p. 1 1
EFC 101 Nine-Month EFC EFC found on SAR and ISIR is always based on nine months. Nine-month calculation always used for Federal Pell Grant award. Handout p. 2 EFC 101 Alternate EFCs Alternate EFCs Dependent Students: Periods of enrollment for less than nine months. Periods of enrollment for greater than nine months. Independent Students: Periods of enrollment for less than nine months. Handout p. 2 Agenda EFC 101 What is the EFC? 9 month Alternate Federal Methodology Formulas Regular, Simplified and Auto-Zero EFC Primary and Secondary EFCs Resources Handout p. 2 2
Federal Methodology Formulas Student Status Dependent student Independent student without dependents (other than spouse) Independent student with dependents (other than spouse) Formula A B C Version Regular Simplified Auto Zero EFC Regular Simplified Regular Simplified Auto Zero EFC Handout p. 3 Federal Methodology Formulas Criteria for Simplified and Automatic Zero EFC Calculation Handout p. 3 and 17 Federal Methodology Formulas Criteria for Simplified and Automatic Zero EFC Calculation Handout p. 3 3
Federal Methodology Formulas Primary and Secondary EFCs Handout p. 4 Federal Methodology Formulas Primary and Secondary EFCs Handout p. 4 Agenda EFC 101 What is the EFC? 9 month Alternate Federal Methodology Formulas Regular, Simplified and Auto-Zero EFC Primary and Secondary EFCs Resources 4
Jack Calculate an 2018-2019 EFC for Jack using the following documents: FAFSA Information, pg. 19 EFC Sheet EFC Worksheet A, pg. 20-21 EFC Formula A Tables, pg. 22-25 Handout p. 19-25 Formula A: Jack (12/10/1950)* Your best guess of Jack s EFC: Sheet, p. 19 Parent: Income in TI Intermediate Value Sheet p. 19 and EFC Worksheet A - p. 20 5
Parent: Allowances Against Income Sheet p. 19 and EFC Worksheet A - p. 20 Parent: Allowances Against Income 4% 3% 3% 2% 4% 3% 9% 8% 4% 3% 6% 5% 4% 3% Table A1 - p. 22 and EFC Worksheet A - p. 20 Parent: Allowances Against Income STX Table A1 (line 7) x 5% Sheet p. 19 and EFC Worksheet A - p. 20 6
Parent: Allowances Against Income Table A2 - p. 22 and EFC Worksheet A - p. 20 Parent: Allowances Against Income Table A2 (line 2a) x 7.65% (line 2b) x 7.65% Sheet p. 19 and EFC Worksheet A - p. 20 Parent: Allowances Against Income Table A3 - p. 23 and EFC Worksheet A - p. 20 7
Parent: Allowances Against Income IPA Table A3 3 in household, 1 in college Sheet p. 19 and EFC Worksheet A - p. 20 Parent: Allowances Against Income EA ATI Lesser of: x 35% = or, $4,000 Sheet p. 19 and EFC Worksheet A - p. 20 Parent: Available Income AI EFC Worksheet A - p. 20 8
Parent: Contribution from Assets Sheet p. 19 and EFC Worksheet A - p. 20 Parent: Contribution from Assets Business/Farm Net Worth (line 18): Adj. Business/Farm Net Worth (line 19) 175,000-130,000 = 45,000 x 50% = 22,500 + 52,000 = 74,500 Table A4 - p. 23 and EFC Worksheet A - p. 20 Parents: Contribution from Assets NW Sheet p. 19 and EFC Worksheet A - p. 20 9
Parents: Contribution from Assets Table A5 - p. 24 and EFC Worksheet A - p. 20 Parents: Contribution from Assets NW APA Table A5 Parent 1, Parent 2, DNW PCA Sheet p. 19 and EFC Worksheet A - p. 20 Parent: Contribution AI AAI AI 45767 EFC Worksheet A - p. 20 10
Parent: Contribution Adjusted Available Income (line 25): Total parents contrib. from AAI (line 26) 52,409-33,100 = 19,309 x 47% = 9,075 + 8,959 = 18,034 Table A6 - p. 24 and EFC Worksheet A - p. 20 Parent: Contribution AI AAI PC Table A6 ( x %) + 1 TPC Sheet p. 19 and EFC Worksheet A - p. 20 Student: Income in STI Sheet p. 19 and EFC Worksheet A - p. 21 11
Student: Allowances Against Income 6,570 Sheet p. 19 and EFC Worksheet A - p. 21 Student: Allowances Against Income 4% 6% 3% 2% 4% Table A7 - p. 24 and EFC Worksheet A - p. 21 Student: Allowances Against Income Table A7 (line 35) x % 6,570 Sheet p. 19 and EFC Worksheet A - p. 21 12
Student: Allowances Against Income Table A2 - p. 23 and EFC Worksheet A - p. 21 Student: Allowances Against Income 6,570 Table A2 (line 30) x 7.65% SATI Parents Negative AAI If line 25 is zero or a positive number, enter zero. Sheet p. 19 and EFC Worksheet A - p. 21 Student: Contribution from Income SIC Sheet p. 19 and EFC Worksheet A - p. 21 13
Student: Contribution from Assets SDNW SCA Sheet p. 19 and EFC Worksheet A - p. 21 Expected Family Contribution TPC SIC SCA Your best guess of Jack s EFC: EFC Worksheet A - p. 21 and 22 Agenda EFC 101 What is the EFC? 9 month Alternate Federal Methodology Formulas Regular, Simplified and Auto-Zero EFC Primary and Secondary EFCs Resources 14
Resources Handout p. 18 Cheryl Hunt cheryl.hunt.trainer@gmail.com 15
2018-2019 ISIR Example 16
Criteria for 2018-2019 Simplified Needs Formulas and Automatic Zero EFC Calculation The following criteria is used to determine if students qualify to have their EFCs calculated using a simplified formula. Formula A Dependent student Simplified (assets not considered) Parents had a AGI of $49,999 or less (for tax filers), or if non-filers, income earned from work in is $49,999 or less; and Either - Parents filed or are eligible to file IRS Form 1040A or 1040EZ (or not required to file any income tax return) or - Anyone in the parents household size (as defined on the FAFSA) received any designated means-tested federal benefits* during or 2017, or - Parent is a dislocated worker. Automatic Zero EFC Parents had a AGI of $25,000 or less (for tax filers), or if non-filers, income earned from work in is $25,000 or less; and Either - Parents filed or are eligible to file IRS Form 1040A or 1040EZ (or not required to file any income tax return) or - Anyone in the parents household size (as defined on the FAFSA) received any designated means-tested federal benefits* during or 2017, or - Parent is a dislocated worker. Formula B Independent student without dependents (other than a spouse) Formula C Independent student with dependents (other than a spouse) Student (and spouse, if any) had a AGI of $49,999 or less (for tax filers), or if nonfilers, income earned from work in is $49,999 or less; and Either - Student (and spouse, if any) filed or are eligible to file IRS Form 1040A or 1040EZ (or not required to file any income tax return) or - Anyone in the student s household size (as defined on the FAFSA) received any designated means-tested federal benefits* during or 2017, or - Student (or spouse, if any) is a dislocated worker. Student (and spouse, if any) had a AGI of $49,999 or less (for tax filers), or if nonfilers, income earned from work in is $49,999 or less; and Either - Student (and spouse, if any) filed or are eligible to file IRS Form 1040A or 1040EZ (or not required to file any income tax return) or - Anyone in the student s household size (as defined on the FAFSA) received any designated means-tested federal benefits* during or 2017, or - Student (or spouse, if any) is a dislocated worker. Not applicable. Student (and spouse, if any) had a AGI of $25,000 or less (for tax filers), or if nonfilers, income earned from work in is $25,000 or less; and Either - Student (and spouse, if any) filed or are eligible to file IRS Form 1040A or 1040EZ (or not required to file any income tax return) or - Anyone in the student s household size (as defined on the FAFSA) received any designated means-tested federal benefits* during or 2017, or - Student (or spouse, if any) is a dislocated worker. *Benefits include: Medicaid, Supplemental Security Income (SSI), Supplemental Nutrition Assistance (SNAP), Free or Reduced Price School Lunch, Temporary Assistance for Needy Families (TANF), and Special Supplemental Nutrition Program for Women, Infants and Children (WIC). 17
References, Resources and Websites Calculating the EFC U.S. Department of Education 2018-2019 EFC Formula Guide Worksheets and Tables https://ifap.ed.gov/efcformulaguide/attachments/071017efcformulaguide1819.pdf 2018-2019 ISIR Guide https://ifap.ed.gov/isirguide/attachments/1819isirguide.pdf 2017-2018 Federal Student Aid Handbook Application and Verification Guide Chapter 2: Filling Out the FAFSA Chapter 3: Expected Family Contribution (EFC) https://ifap.ed.gov/fsahandbook/1819fsahbkavg.html 2018-2019 Free Application for Federal Student Aid https://fafsa.gov/fotw1819/pdf/pdffafsa18-19.pdf Completing the FAFSA SM 2018-2019 https://studentaid.ed.gov/sa/sites/default/files/2018-19-completing-fafsa.pdf Program Integrity Q&A Verification https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html Federal Student Aid Glossary and Acronyms https://ifap.ed.gov/fsahandbook/attachments/1718fsahbkappendixa.pdf Other Resources EFC Calculator https://bigfuture.collegeboard.org/pay-for-college/paying-your-share/expected-family-contribution-calculator Social Security and Medicare Tax for (Society for Human Resource Management) https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/fica-social-security-tax-.aspx 18