<p>My father has no retirment plan, so he has always been very good at saving - he now has around $950k in savings, and making abour $120k/year.
Im a junior in HS right now, but I have two brothers in college right now. The EFC for each one is about $70k/year for each of them…which is just insane, thats more than my dad’s income. They each go to schools which are about $40k/year, with no financial aid. What should I expect the EFC to change to once I begin college?
Also, would it make any difference if my dad were to invest his savings into land? He was considering this, but I thought the fafsa forms took land assets into account?</p>
<p>$950 is a lot. Are you sure it is all in non-IRA accounts? IRA accounts are not counted as assets for FA. Your home equity isn’t counted either (for FAFSA; it is for CSS/Profile), but investment land is…The 70K sounds right if he has liquid assets of 950K.</p>
<p>I guess I don’t get it. Your father saved $950,000. What is it saved for? He doesn’t want to use it for his kids? Why should others pay for you to go to college when your father is so well off?</p>
<p>The majority of his money ($900k+) is in stocks, not an actual account. I use the term savings not in reference to a savings accounts…sorry, I should have specified.</p>
<p>He’s only 45…with no retirment plan, he HAS to save a lot for health insurance (both him and my mom), living expenses etc… for the next 40-50 years. Blowing $480,000($40k each, times 4 years) on his kids’ education (undergrad only) is a huge hit to that. Most people have a retirment plan, which is why his situation is somewhat unique. And if he’s working towards retirement, he obviously needs to save, not spend his entire annual salary on our education, not including the taxes on his income or living expenses.
I’m not saying he should pay for it. I don’t expect him to push his retirment back 4 or 5 years for each of us.</p>
<p>A lot of people put $ into IRA’s if they don’t have a retirement plan through work. That’s why it’s not common to have $950,000 in cash. Many families applying for financial aid might have $500,000 in home equity and $450,000 in IRA accounts; so they would also have $950,000 in assets, but assets that aren’t all counted for financial aid purposes. It might not be fair, but that’s how the financial aid system works in general.</p>
<p>If the EFC for your brothers is $70K I think that it will be unchanged for you.
However- to try and explain the way I understand it-- if the schools they attend met 100% of need and EFC was $70k ( and if it was split evenly which it is not generally) then if the schools were each $40k, then the college would give each brother probably unsubsidized loans of about $5,000.</p>
<p>If the savings are not in a dedicated retirement plan- it has to be added as assets- so that may be why it is so high- we found our EFC to be about 1/4 of before tax income.</p>
<p>If he has stocks in an IRA account that would also not be counted. </p>
<p>Cash and stocks not in an IRA account would be counted as available assets.</p>