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EFC Misrepresents My Family’s Finances

AnonAmissAnonAmiss 9 replies11 threads Junior Member
Recently, I found out about an issue with my EFC—though it should’ve been clear from the get go. My family’s annual income is 20k but my EFC is 15k. My household has 5 people and we have less than 500 (yes, 500) in our bank account.

After a recent discussion with a financial aid counselor at one of the schools I was accepted into, I found out that my family’s EFC is only so high because of a pension my family’s failed franchise has gotten in 2017 (50k, which only cushioned my parents’ financial deficit).

Problem is that my family is unlikely to even be able to get <i>any</i> private student loans given our financial situation, which I won’t go super in depth on. What should I do?
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Replies to: EFC Misrepresents My Family’s Finances

  • mom2twogirlsmom2twogirls 2254 replies29 threads Senior Member
    What can your family actually afford?
    I don’t understand why you wouldn’t get more aid anyway, maybe because Indont understand the pension (maybe someone else more knowledgeable will contribute). Am I understanding correctly that the family income then for 2017 would be more like 70k for 5 people? I would have though that would get a lower EFC than $15k.
    If you’ve tried an appeal and it hadn’t worked, can you wait a year? That might give you an opportunity to apply to schools that give more aid and have 2018 income used instead.
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  • MYOS1634MYOS1634 42352 replies455 threads Senior Member
    Have you applied to schools that meet need? Run the NPC?
    What are your stats? It may make more sense to wait a year so that only your 20k income appears and you are eligible for Pell Grants (6k) plus whatever the college is giving you.
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  • thumper1thumper1 76516 replies3384 threads Senior Member
    edited February 2019
    It appears you are a FL resident...is that right? Do you qualify for Bright Futures? How much? Can you commute to any FL college?

    When you say your “EFC” is $15,000 , do you mean your FAFSA EFC or the net costs the colleges are giving you with aid received? Have you received financial aid packages?

    In 2017, your parents owned a franchise? Did they take business deductions in relation to their business? Some of those deductions are allowed for IRS tax purposes, but are afford back as income for financial aid purposes.

    Something isn’t right. The EFC for a $70,000 income family of five wouldn’t be $15,000.

    Did your parent do a retirement rollover in 2017? Were the self employed in 2017?

    Do you have affordable options on your application list?

    Do your colleges guarantee to meet full need for all...because if they don’t, this could be the reason your net costs are higher than you expected them to be.

    YOU (the student) can take a $5500 Direct Loan in your name if your parents have filed a FAFSA. Do you have a job now?

    What colleges are we talking about here...because that might make a difference. And what are your stats.
    edited February 2019
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  • AnonAmissAnonAmiss 9 replies11 threads Junior Member
    Just following up.

    I had a bit a misunderstanding of the situation, but it's still not good. I still don't completely understand, but I'll say this for better understanding.

    My family's income was 20k. The "pension" was actually a business bank transfer that the IRS listed as a pension for 50k. My family's income was double-counted based on a money transfer--30k of which they really didn't make (from the 50k).

    Yes, I qualify for Bright Futures. I qualify for the full tuition version.

    When I say $15k, I am referring to FAFSA EFC.
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  • thumper1thumper1 76516 replies3384 threads Senior Member
    A pension transfer like to another tax deferred retirement account?

    If that is the case, contact your college with proof of this tax deferred retirement account transfer.

    If this money was transferred your parent regular accounts, then it would be income for that year of the transfer.
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  • mom2collegekidsmom2collegekids 84272 replies1046 threadsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    Can you delay your enrollment for one year at the Florida school, then use BF and your EFC will be back to where it should be?
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  • twoinanddonetwoinanddone 23831 replies17 threads Senior Member
    You should go to a Florida school. Even if you had an EFC of $0, that doesn't mean a school in another state, or a private school, is going to give you enough money to go there.

    Where did you want to go that a family income of $50k rather than $20k made that much of a difference? At any of the most generous schools (Harvard, Stanford, ND), a family income of $50k would still get 100% of need met, which would be 100% of COA. If schools are asking you to pay $20k they aren't 'meets full need' schools.
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  • cptofthehousecptofthehouse 29933 replies59 threads Senior Member
    I suggest you contact the Financial aid director of the schools you have in mind and request that the EFC be changed due to the double counting and misunderstanding of the "pension" or transfer, You need to very clearly explain what that transaction is. It is still possible that the school will not change the EFC. Yes, one time events will affect that year's EFC. This is a major flaw in the way EFC is calculated. I've known families who deferred college applications due to large one time event that would render a EFC that is way out of line with what the family has been earning and what they expect to be earning after that year. THings like a job start bonus after a couple of dry years, maybe even jobless so that the money is going straight to accumulated debts. My experience is that the schools are not sympathetic to these blips.

    So if you don't get any change in EFC, that may be what you have to do. Take off a year.

    THe point is well taken, that even a change in your family EFC may not result in more money from the school. We are not talking about schools that guarantee to meet full need. Schools often gap. And at the tail end of the admissions cycle, there is not likely to be that much money left. If you can qualify for some PELL or if your state as some income based grants, a change in EFC would help. But as far as your student loans, the only ones you can take on your own stay the same amounts. What changes is that you won't be charged interest while in school if your EFC is low enough.

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