We live in a $130,000 house, earn about $100,000/year, drive $15,000 used cars. Our EFC came back at $37,000. Is it possible that our “retirement savings,” most of which are in stocks and mutual funds rather than true retirement accounts, is what caused this high EFC? I was hoping to retire in 3-5 years due to some health issues, but paying $37,000 a year will not make this a possibility. Could this EFC be wrong? And if my student is a 4.0 GPA, 31 ACT, 33 superscore with plans to get a doctorate in a competitive science field, am I ruining her future by forcing her to attend a low-ranked in-state public university that does not offer an undergraduate degree in her exact field?
Yes…this is very possible. Only balances in qualified retirement accounts are not included in the calculations.
But with $100,000 income, your EFC would have been in the $25,000 to $30,000 a year range anyway.
You are NOT ruining you kid’s chances of getting a doctorate in a competitive field of you send her to an instate public university. Or to a lesser known private university where she might garner merit aid. For science fields, it’s my understanding it’s all about what the student wants to research.
I personally know two kids who didn’t go to $70,000 a year undergrads. In fact one went to a rather bleh undergrad where he was the shining star and got a LOT of great research opportunities. BOTH of these science kids have gotten their doctorates, fully funded…and oddly in the same field…organic chemistry.
So…what are your instate public options? Any have honors colleges? Can you pay the costs for her to attend there?
What CAN you pay per year?
^^ this was us about 5 years ago! my 31 ACT & 34K EFC S15 decided he wanted to go to OOS to UCLA. sounded nice and sunny . . until we figured it all out by reading so much on this forum. Read the financial aid and scholarships threads. There’s so much to learn.
But do know: there are smart kids at every school, lower ranking schools give more merit aid to try to entice top kids, and there are options out there for your son. My S15 is now graduating in May from our state flagship, has a GOOD job offer in hand, owes nothing, and has savings as well from internships. It turned out great. 
You’ll figure it out; there are so many helpful people here too.
If you are looking at OOS public schools, it is likely that your EFC is irrelevant. You likely wouldn’t get any financial aid anyway. The number you care about is your Net Price. You need to go to each school and run the numbers on their NPC.
Only certain asset are not considered available to fund college expenses. Any stocks, bonds or mutual funds outside a qualified retirement plan would be available.
it is my understanding that the stocks and mutual funds not in a retirement account is the problem but given that and the $100,000 income one could probably not expect a EFC under 20K… sorry
@SummerMom9 I know of many many stories of young people who went to their state flagship for reasons of cost and then went on to top graduate programs, law schools, and medical schools. So, no, your child is not doomed. Especially if your in-state university has an Honors Program or College, your child will find like-ability peers and will have a good experience.
Here are some ideas if you are looking for a specific major:
If you live in a Western state, look to the WUE consortium where your child can attend out of state options in the west, for between 1-1.5x in state tuition rates: https://www.wiche.edu/wue
If you are in the mid-Atlantic, your child could attend U of Maine Orono for the same as your in-state tuition with her stats.
U of Alabama recently upped its stats for merit scholarships, so check the latest criteria on their website. Your child would probably qualify for significant merit at U Alabama-Huntsville, which is very good for tech fields.
ASU has good merit for out of state and an excellent Honors College (Barrett).
At UNM, she could qualify for the Amigo scholarship (in state tuition). Total COA is less than 20K annually.
U of South Carolina has some generous scholarships for OOS - they are competitive and I believe they require a separate application.
Some of these out of state options are first come first served for merit consideration, so apply as early as possible.
Best of luck!
In fact those qualified retirement funds are actually distinguished as QRP or a Qualified Retirement Plan. If you have a lot outside a QRP, that’s dicey. I agree with thumper that the EFC would be closer to 25-30k, not under 20k. It all depends on number of dependents, age of the older parent, and more.
You have to run the NPC. That’s the college formula, per their policies. (Eg, some don’t consider home equity.) If you’re referring to the Fafsa EFC, it’s often lower than what the college expects. Sorry.
How much is her hoped for major different than what the state publics offer? Can you mention what she wants and what they have? Even in stem, many kids, when exposed to the actual college offerings, do shift a bit, within a field.
Do you contribute at all to any tax deferred retirement accounts, in addition to your mutual funds and investment accounts? If so, the contributions to those tax deferred retirement accounts for 2017 were added back in as income when you did the 2019-2020 FAFSA form.
Why would there be so much money in such funds as to make your EFC that high? You have no tax savvy savings? Or are they maxed out and your brokerage assets are over and above those? Divorced? Self employed? Second home?
I don’t think its suprising that someone has significant funds outside of qualified retirement accounts which she has earmarked for retirment. The max you can contribute to these qualified plans is often far less then the amount a family might want to save. Unfotunately, all of that money is “unprotected” as far as college tuition goes. When that happens, families make the choice of what they want to do. Personally, I think the best bet is to find one of the excellent, affordable colleges that will give merit aid to a high achieving student. If a graduate degree is the goal, research which affordable colleges send lots of students to graduate school in your daughter’s field.
For example, tiny Drew University in NJ has an excellent track record of sending kids to graduate school in the sciences.
Tell us more and we can help you.
What is your home state?
How much can you pay each year?
What is her major and career goal?
Don’t worry, with an open mind and an open app list, your daughter can still reach her goals.
Also!!! Please be aware that many/most grad programs do not require their students to be just one particular major. Usually, especially in STEM, they’ll accept students with bio, chem, physics, math, eng’g majors…they’ll have a whole list of majors that they’ll accept.
If the numbers are correct calculating the assets at the parent rate for an income of 100K, I would wonder, with a house that is worth 130K maybe the family has squirreled away brokerage money by not needing a mortgage for many years? Or the family lives in a very low COL area. Maxing out retirement funds for normal professional salaries is still a chunk out of a 100K salary (“we” so two salaries?) . to get a 37K coa unprotected assets look to be over 300K? If the 401 /pensions/iras are indeed maxed out, it would seem that saving for college would have been part of that strategy of financial frugality based on being on an income of 100K in the late 40’s or higher age group?
Sounds like they live in a low cost of living area. Can’t imagine a $130k home being in a pricey area. So, my guess is that either their mortgage is very low or their home is paid off…and they’ve been saving big time.
Their EFC does not seem crazy if they have a good bit in savings.
And she said $100k in earnings. We don’t know how much in dividends, etc, their investments are also bringing in.
@summermom9 My ds who is currently a grad student had a budget that was a fraction of our EFC.We could not afford any highly ranked school. He ended up selecting one of his full scholarship options, definitely not a physics powerhouse U. He is now a grad student at one of the very top theoretical cosmology programs in the country.
So, no, you will not be destroying your child’s future by not destroying your own future by undermining your financial stability for retirement. There are many paths forward. Fwiw, my ds is surrounded by students who graduated from tippy top UG programs AND other students like him who went to much lower ranked schools. Definitely not a case of only elite to elite.
Without knowing your state of residency and the desired major, there is no way anyone can give an answer to this question.
In any case, FAFSA EFC is not necessarily the EFC that any given college will expect you to contribute. Each college may have its own calculation. Many will be significantly higher than the FAFSA EFC for you. Estimates can be gotten from each college’s net price calculator on its web site.
Normally families with expectations that their kid will go to college OOS, set aside some college savings to make up any merit / financial aid shortfall.
I think many families have no idea about the true cost of college until their first kid is getting ready to apply.
I’m a bit baffled by a family that is able to save to this extent for retirement and yet has not saved for college. You’d have to be living in a bubble not to know just how expensive college is. That being said, many set budgets lower than their EFC and many kids go to affordable schools and do just fine. With an ACT of 31 there are some good merit opportunities out there.
^^ nePatsGirl - we were that family. We live in the midwest and it’s not college-centric here. We saved my income for a few year early on before the 4 kids; but it wasn’t in 529 plans; just in some investments. Then kids happened and 15 years later when we started finding out about college costs, and how OOS doesn’t reciprocate much around here - it was a shock! thanks to this forum i do get it now.
@NEPatsGirl We are that family as well. I have significant savings outside of retirement accounts since I save much more than the 401k max each year. We always intended on chasing merit and I could afford to cash flow our in state schools if the merit option didn’t work out. I had no reason to save for college.