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Is my EFC too high?

brokenclocksbrokenclocks 11 replies2 threadsRegistered User New Member
Hi.
So my mom just filled out the FAFSA and she says our estimated EFC is 63000. My parents make a combined 105,000 with 40k in college savings and no other investments/assets. Every single college net price calculator we have sat down and done with updated and accurate information put us at about 25-30k aid which was perfect for us. We also did one of those expected EFC calculators on fafsa’s website earlier this year and it came out to about the same, like 26k. Is this a normal amount given our finances? I’m freaking out a bit.
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Replies to: Is my EFC too high?

  • thumper1thumper1 74776 replies3277 threadsRegistered User Senior Member
    Print out your FAFSA and check each entry for accuracy.

    1. Make sure parent income isn’t also listed in the student section.

    2. Did your parents do an IRA or TSA rollover in 2018? If they did, and didn’t complete the FAFSA correctly, this would be included as income.

    3. Make sure that there are no misplaced decimal points. $100.00 can look like $10,000 if the decimal point is incorrectly placed.
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  • brokenclocksbrokenclocks 11 replies2 threadsRegistered User New Member
    @thumper1 My mom says that we can’t print it out or view the application because it’s now processing. I logged in to both accounts and I can’t find the actual application she filled out, just the status that it is processing? Do you know if I can access her input right now?

    She says she didn’t make any mistakes, which is why I’m really worried, but fingers crossed she did.
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  • twoinanddonetwoinanddone 22961 replies17 threadsRegistered User Senior Member
    You can't access it while it is processing. That usually takes about 2-3 days.
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  • thumper1thumper1 74776 replies3277 threadsRegistered User Senior Member
    edited October 7
    Did she do a rollover of retirement accounts in 2018.

    Everyone thinks they haven’t made a mistake. It’s very easy to do a typo, especially a misplaced decimal or added zero.

    Wait until this processes and then print out and check.

    The only thing is...if you used the IRS Data Retrieval tool to import tax return info, you won’t be able to read those numbers.

    If your parent did a rollover, it will be on her tax return. Check that.

    Another thought...did your mom include balances in her tax deferred retirement accounts as assets?
    edited October 7
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  • cshell2cshell2 552 replies7 threadsRegistered User Member
    EFC does seem really high for that income and assets. DS's FAFSA processed very quickly last week. It was ready to be viewed in 24 hours, so maybe you won't have to wait several days like it says on the site. I'd check everything suggested above.
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  • brokenclocksbrokenclocks 11 replies2 threadsRegistered User New Member
    @thumper1

    Thanks for the helpful info!
    Just asked, and my mom did do a rollover, and she included it on the FAFSA. The rollover was around 4300 dollars according to her tax returns. She also says that she didn't include the balance in retirement accounts as assets. I’m going to be honest, I have no idea what a rollover is and what that means, but did we make a mistake here?
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  • JD7777JD7777 53 replies8 threadsRegistered User Junior Member
    Unless there is something unusual about your family's tax situation or unique numbers around home business or farm or something, that number (EFC) is too high. Our assets are very similar and our combined income from both parents is closer to 150k and our EFC was 41,000.
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  • cptofthehousecptofthehouse 29420 replies58 threadsRegistered User Senior Member
    edited October 7
    Take a look at the relevant tax return—get the paper version since you will not see that part on the FAFSA and as @thumper1 says, check for rollovers or withdrawals of Qualified plan money. Also look at how much was contributed to qualified plans that year. Any qualified plan contributions would be added back to income. Also added to income are return of overpayment of state taxes from prior year. These are items often forgotten

    Given that the EFC % is in a sliding scale from 22-47%, it’s difficult to see you getting a $60k+ EFC. Your net FAFSA income would have to be greater than $134k to get this and Im taking it at the marginal rate which is not the way it works and not including any allowances, taxes.

    Were the college savings included as your assets or your parents’?
    edited October 7
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  • twoinanddonetwoinanddone 22961 replies17 threadsRegistered User Senior Member
    Were the college savings included as your assets or your parents’?

    That could be the problem. If the $40k was listed as YOUR asset and not your parent's, it gets hit at the student's 20% rate rather than the parent's 5.6%. If the money is in a 529 account, it counts as a parent's asset. If it is sitting in your (student's) bank account, it really raises the EFC.
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  • cptofthehousecptofthehouse 29420 replies58 threadsRegistered User Senior Member
    20% would increase EFC by a little more than $6k which only accounts for some of the difference. Something else is off
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  • lookingforwardlookingforward 34101 replies376 threadsRegistered User Senior Member
    I still think 63 is too high, even if it was listed as student funds and/or the rollover was wrongly input. 40k at 20% is only 8k.

    Here's a wild guess:

    OP, if you correctly roll funds from one qualified investment to another, directly, it's tax free and not counted for the FAFSA. But it seems the Fafsa doesn't properly import the full rollover details from the tax forms. There's supposed to be another Fafsa question, asking the amount of untaxed funds from a rollover, so it can be excluded.


    https://www.edvisors.com/blog/irs-data-retrieval-tool-returns-for-the-2018-2019-fafsa/
    "IRA and pension distributions will be automatically transferred and autofilled on the FAFSA form, and incorrectly counted as income. This could affect the amount of aid the student can qualify for. Because of the new security measures implemented, the parent will not be able to see the amounts that are autofilled in the fields showing untaxed IRA or pension distribution. But you will be asked if the amount includes a rollover. If the amount includes an IRA rollover, answer yes."

    "...the online FAFSA form will generate a new field for you to report the amount of any untaxed IRA distribution or pension that was rolled over. The parent will need to manually enter this number. The FAFSA will then subtract the user-reported rollover..."

    You want to be sure this subsequent question was answered.

    But, if only 4300 moved, that doesn't seem to explain the high EFC.

    ??
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  • thumper1thumper1 74776 replies3277 threadsRegistered User Senior Member
    The $4300 rollover would increase the income by that amount. The parent would have needed to enter the amount AND check a teeny box on the FAFSA to indicate this rollover.

    Is it possible that she put $43,000 instead of 4,300?
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  • brokenclocksbrokenclocks 11 replies2 threadsRegistered User New Member
    edited October 9
    Thank you all so much for the responses! We’ve spent the last day looking over the processed form.

    Like most of you said, the issue is the Rollover. My dad switched jobs so around 85k rolled over to his new job. We used the IRS Retrieval tool. How do we fix this now so the roll over doesn’t count as income?
    edited October 9
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  • cptofthehousecptofthehouse 29420 replies58 threadsRegistered User Senior Member
    Look at @lookingforward ’s post #11 above. Then look it up on the internet and read the procedure V-E-R-Y carefully. You need to correct the FAFSA.
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  • twoinanddonetwoinanddone 22961 replies17 threadsRegistered User Senior Member
    I think you need to correct the income issue with each school, and don't think you can correct the FAFSA once it is processed.

    It's likely you need to get tax transcripts from the IRS, so you might want to be pro-active and order that now.
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  • thumper1thumper1 74776 replies3277 threadsRegistered User Senior Member
    edited October 9
    My dad switched jobs so around 85k rolled over to his new job. We used the IRS Retrieval tool. How do we fix this now so the roll over doesn’t count as income?

    You need to contact each college. You aren’t the first (and won’t be the last) who has this issue. The colleges are the ones who can make the changes. You will need to provide documentation to each school of the rollover info.

    It will get done...but start now.
    Look at @lookingforward ’s post #11 above. Then look it up on the internet and read the procedure V-E-R-Y carefully. You need to correct the FAFSA.

    @cptofthehouse unless something has changed this year, this student can not make this correction. Her colleges need to make the correction to her FAFSA.
    edited October 9
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  • lookingforwardlookingforward 34101 replies376 threadsRegistered User Senior Member
    We were able to make a Fafsa correction online, I thought. Not CSS. (That had to be a manual correction on a copy.) But it's been a while.

    But the point is, as twoinanddone and thumper say, to contact the colleges and ASK them how they want you to correct.

    I highly suspect you'll be one of many who has this error.
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  • cptofthehousecptofthehouse 29420 replies58 threadsRegistered User Senior Member
    Though there are things you can correct on FAFSA, I do not know if this is one of them. If it is not, you do have to contact each college as @thumper1 says above.

    One would think the FAFSA would allow this correction to be made, given it is an easy mistake to make. I seem to remember discussion on this some time ago. No idea if this year’s form can be corrected by filer—check it out because if it is correctable by you, it would be a heck of a lot easier than sending the info to each college, especially if you are applying to a lot of schools. But you do as you have to do. It’s a huge difference in EFC.
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  • thumper1thumper1 74776 replies3277 threadsRegistered User Senior Member
    edited October 9
    We were able to make a Fafsa correction online, I thought

    @lookingforward there are plenty of FAFSA corrections you can make yourself online. Unless something has changed, this rollover thing cannot be corrected online. It has to be done by the college.

    I do agree...this mistake is so easy to make. It’s a little checkbox...and if you miss it...your rollover is included as income. Seems like an easy thing for FAFSA coders to fix.

    I found this...
    Tax return information you transfer via the Internal Revenue Service Data Retrieval Tool cannot be changed on your online FAFSA form

    I would suggest you contact the college(s) and ask them how to correct this rollover issue. If it can be done by you online...they will likely tell you to do it. But since it was imported from the DRT, that might not be the case...but do ask!!
    edited October 9
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  • lookingforwardlookingforward 34101 replies376 threadsRegistered User Senior Member
    Okay, that clarifies.
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