So did the FAFSA and I guess I thought it would be more labor intensive. .I mean there were no questions about debts or mortgage payments which I thought there would be. It was just kind of how much we made and this is how much taxes were taken out--kind of blah and really doesn't allow for much tinkering.
So what does the EFC number really mean--is that total payment expected from us for the total cost of education for a 4 year school or is it per year? Or is this amount that we could get in aid? It also showed an amount for Stafford loans at a small amount--is that per year or total as well? And is this amount in addition to what the school could give her?
Will that differ by school--I mean if that number is all I will owe total for 4 years is what the EFC number shows for my daughter to go to a school that costs 67k a year, yeah I am down with that vs. 280k.
The FAFSA is a pretty blunt instrument - it just measures your overall household income and then determines whether or not your kid meets the federal guidelines for a subsidized (i.e., government-backed) student loan.
The EFC is what you are expected to contribute every year - not the total for all 4 years. The Stafford Loan is the amount of the annual subsidized loan she qualifies for. The CSS is the really detailed form that colleges actually use to make their aid determinations. It asks about all kinds of stuff - home equity, credit cards, tuition you're already paying, cars, etc. And then each school has its own formula that converts your CSS entries into an award. Some schools allow more for savings, for home equity, etc. I've heard that you get hit really hard if you have equity in non-primary residences, or if you own your own business, in which case much of the revenue is regarded as income, regardless of deductions.
Using your 67K example, here's how a typical financial aid package might break down.
Cost of Attendance = 67k (tuition = 56k, room & Board = 8k, books and expenses = 3k)
EFC (the part you pay each year) = 30K
Subsidized loan (which your kid will have to pay back) = 5k
Kid's summer earnings = 2500
Kid's work study at school = 2500
Tuition Grant from school (doesn't have to be paid back) = 27k
You won't get billed the 3k for books and expenses, that's just stuff you pay for as you go. The expectation is that the kid's work study earnings will pay for those things.
This example above is for a school that claims to "meet full demonstrated need." Whether you can actually afford the EFC or not is up to you to decide, but the EFC represents the college's calculation of what you can pay. Schools that meet the full demonstrated need will - in the example above - give you the $27k every year. But there are plenty of schools that don't meet full demonstrated need, and will "gap" you. They're saying, in effect, that you qualify for $27k per year, but we can only give you (for example) $15K a year, so if you want to come here, you need to fill that gap with another $12k you come up with.
This is where people end up getting in way over their head, as they take out huge loans for an undergraduate degree, and then don't find jobs that enable them to pay back the loans. Or parents decide they'll do anything to send their kid to college and take out these loans themselves.