<p>Last year I had two children in two different colleges. One graduated in May. When I recieved the financial aid award letter for my other child (who will be a junior in the fall) I found that her financial aid had been reduced substantially. On a annual basis it dropped by approximately $12K. I was told that it was because of our other daughter’s graduation. We have budgeted our college savings funds and based our college choices on what we had saved. Now we are getting socked for an extra $12K per year. We have filed a request for reconsideration with the college. </p>
<p>Has anyone else experienced this? Any ideas about what to do? My child is doing very well in school and is active in extracurriculars. This seems like a terrible way to treat people who are your customers.</p>
<p>Yeah-- if you look at the way the financial aid formula calculates the EFC, the parent’s contribution to the Expected Family Contribution (which is usually the bulk of the EFC) gets split between the two college students. With only one in college, the single student gets the full parental component of the EFC.</p>
<p>So lets say that the parental contribution to the EFC (from assets and income) is 20K, and the two college kids each have a contribution from their small savings account of 2K each. In theory, when both are in college, the 20K parental contribution get split between each, so each has an EFC of 10K + 2K = 12K.</p>
<p>Now when student A graduates, assuming the parent’s income and assets remain about the same, student B gets the full parental contribution to the EFC (since the parents no longer have to worry 'bout providing financial support to student A’s college education). So student B’s EFC jumps to 20K + 2K = 22K. </p>
<p>Look at your EFC for your remaining college student-- you’ll see that it increased, and that’s the reason for most of the reduction in aid.</p>
<p>You might also use the FinAid calculator to see what portion of the EFC is coming from your student. If he/she has some cash in savings, it can be raising the EFC and lowering the aid. You might be able to legallly shelter this through a 529 account, or by using those assets to pre-pay some loans, or converting those reportable assets to non-reportable assets. Student assets are the hardest hit in the formula, and the easiest to manage in order to maximize aid.</p>
<p>they are going to reduce teh percentage of student assets meant to be used for college from 35% to 20%.
However- if your family was committing to say $20,000 a year- $10,000 for each student, and one graduates, it is just going to be assumed that you can still pay $20,000 a year, unless you can show that your income has changed.</p>
<p>EK-- true, but remember that the old EFC may have included a contribution from the student who graduated. So while the new EFC will include the full parental contribution, it may not be the same as the sum of the two old EFC’s, even if income and assets remain static.</p>
<p>I never really understood the difference between family EFC and student EFC
I know that each college computes EFC differently
One may use the PROFILE as well as their own financial info, another might just FAFSA.
One college might assume students are going to contribute $3,000 from summer earnings directly to tuition, another might assume less or more.
I wasn’t trying to break it down into exaclty what the college would expect in terms of numbers, merely to illustrate that if the family no longer has the expense of the 1st college, teh 2nd college is going to assume that money is now freed up.</p>