Financial Aid for Upper-Middle Class

notrichenough
Fri, 16 Nov 2012 16:56:32 +0000

Our household take-home pay, with all taxes deducted, is probably around 40% of gross income, before we address household expenses.

Are you sure you aren’t counting 401k or other non-tax deductions in this? I’m not aware of anywhere where the income tax rates add up to 60%.

Is there a rule-of-thumb, like $100,000 household income translates into $30,000 EFC? $200,000 income translates into $60,000 EFC?

A good rule of thumb on the income-side contribution might be something like

$10,000 + half your income over $80,000

On the asset side it will be something like

5.64% of assets over $50,000

You can see the exact formulas used in the EFC Formula Guide, along with worksheets to calculate your EFC. It is worth going through: