Let’s Calculate an Expected Family Contribution Presenters: JD Gibbs Spring Conference April 9 – 11, 2018

What we’ll do Calculate an Expected Family Contribution (EFC) for a dependent student using 2018-19 EFC Formula Review our work and discuss the results Be glad that we have computer systems that do this for us!

Nanette Cooper (NC for short!) Dependent student 2 parents, married to each other and living together Both parents work outside the home 4 children 2 of the children, including Nanette, are in college The older parent is 51 Nanette and her parents are North Carolina residents Parents filed a joint federal income tax return for the calendar year of 2016. Nanette filed a 1040EZ federal income tax return for the calendar year of 2016

Parents’ Financial Information for 2016 Parents’ AGI was $60,000 Parent 1 income earned was $25,000 Parent 2 income earned was $30,000 Parents’ other taxable income was $5,000 Parents had a total of $2,000 in untaxed income that had to be reported on the FAFSA Parents’ federal income tax paid was $5,900 Parents’ cash, savings, & checking account value is $10,000. This is their only asset.

Nanette’s Financial Information for 2016 Nanette’s AGI was $6,000 Nanette earned $6,000 from work (same as her AGI) Nanette has $1,000 in untaxed income that was reported on the FAFSA Nanette paid $264 in federal income tax Nanette has $1,000 in cash, savings, and checking. This is her only asset to be reported on the FAFSA

Let’s calculate Nanette’s EFC!

Let’s review the answers 60,000 25,000 30,000 55,000 2,000

62,000

5,900 2,480 1,913 2,295 35,740 Notes – 9. Use 4% - the parents are NC residents and their income is $15,000 or more 10. And 11 – multiply each parent’s Income earned from work – not the AGI $25,000 X 0.765 $30,000 X 0.765 12. There are 6 family members and 2 are in college

4,000 52,328 62,000 9,672

10,000 22,900 -12,900 21. The older parent is 51 and there are 2 parents

9,672 2,128 2 1,064 26. Use 22% of the Available Income because it is between $-3,409 and $16,400

6,000 1,000 7,000

264 210 459 7,503

7,000 7503 -503 200 1,000 1,000

1,064 200 1,264

References The EFC Formula, 2018-2019 available at www.ifap.ed.gov

Questions?

Please visit them and let them know how much you appreciate it. NCASFAA would like to thank our Professional Affiliates for their support. Please visit them and let them know how much you appreciate it. Spring Conference April 9 – 11, 2018