<p>When we get our EFC amount, funds are paid out of my child’s 529, right? I know this sounds really dumb, but am curious how payments work from these funds.</p>
<p>When you get your BILL, the amount that is not covered by any financial aid your child receives can be paid with money from the 529.</p>
<p>Your EFC amount is the amount that FAFSA calculates that your family can pay for college. Your college might have a different number for how much they want you to pay (higher or lower, depending on many factors). Included in these calculations is the amount you reported as 529 savings. How you actually pay is up to you; you can pay from current income, savings, gifts, loans, etc. If you want to use your 529 funds to pay for college (which would normally be the case) you would direct your 529 administrator to pay out the amount you want. The funds can often be paid directly to the college, or can be paid to you to reimburse college payments that you’ve already made.</p>
<p>
Note that “aid” in this case may include loans, along with grants, scholarships, and any other “free” money. IMO getting offered loans to get enough aid so you only have to pay your EFC isn’t really “aid”, but that’s how it works.</p>
<p>Also keep in mind that EFC does not mean “what I will pay”, it really means “the minimum I will pay”. For many if not most schools you will have to pay more than your EFC, and offered loans may not be enough to make up the difference (this is getting “gapped”).</p>
<p>When we get our EFC amount…</p>
<p>Oh and one other thing, if you have not run the numbers and seen your EFC before, brace yourself… The amount often has nothing to do with what any real family could afford… Just to let you know…</p>
<p>Thumper makes a great point.</p>
<p>Holly, …Unless your child gets accepted to one of the few “meets full need” schools or your child gets a big merit scholarship, you will probably have to pay more than your EFC.</p>
<p>Once it’s determined how much you owe (which may be more than your EFC), then…</p>
<p>*If you want to use your 529 funds to pay for college (which would normally be the case) you would direct your 529 administrator to pay out the amount you want. The funds can often be paid directly to the college, or can be paid to you to reimburse college payments that you’ve already made. *</p>