EFC Calculation: When will I ever use this? TASFAA 2019

TASFAA 2019 Jennifer Buckles Director of Financial Aid University of TN at Chattanooga 11 years experience in Financial aid “My introduction to calculating EFC’s was for an audit a month into my financial aid career. That foundational knowledge has been invaluable throughout my career.” TASFAA 2019

TASFAA 2019 What is the EFC? Formulas SNT and Auto Zero Agenda What is the EFC? Formulas SNT and Auto Zero EFC Formula Worksheets Now you try! Questions TASFAA 2019

TASFAA 2019 What is an EFC? Estimated Family Contribution An EFC is the calculated number determined based on information reported on the FAFSA® The EFC along with other data is used by the school to determine a student’s financial aid package The EFC is the result of the Needs Analysis Formula as prescribed in Part F of the Higher Education Act of 1965 (HEA) TASFAA 2019

What is an EFC? Determines eligibility for Pell and other need based awards Not “Expected” family contribution but “Estimated” Can’t be directly adjusted but elements can be adjusted through Professional Judgement TASFAA 2019

TASFAA 2019 What is an EFC? EFC assumptions Modest allowances for standard of living Postsecondary education is among the family’s first discretionary expenses Living allowances 12 months for the family (parents’ portion of EFC calculation), and 3 months for the student (remaining 9 months in COA) TASFAA 2019

TASFAA 2019 EFC Formulas Basic EFC formulas ➔ Dependent students (Formula A) ➔ Independent students without dependents (Formula B) ➔ Independent students with dependents (Formula C) TASFAA 2019

TASFAA 2019 EFC Formulas Special calculations ➔ Simplified formula (no assets) – meet simplified needs test (SNT) ➔ Automatic zero EFC – meet Auto Zero threshold ➔ Other than nine-month enrollment TASFAA 2019

Simplified Needs Test (SNT) Dependent If tax filer, parent’s adjusted gross income is $49,999 or less If non tax filer, parent’s income is $49,999 or less And at least one of the following: Anyone in parent’s household eligible for federal means-tested benefit, or Parent is a dislocated worker, or Parents filed or were eligible to file a 1040A/1040EZ, filed a 1040 but were not required to do so, or were not required to file any income tax return TASFAA 2019

Simplified Needs Test (SNT) Independent If tax filer, student’s (and spouse) adjusted gross income is $49,999 or less If non tax filer, student’s (and spouse) income is $49,999 or less And at least one of the following: Anyone in student’s household eligible for federal means-tested benefit, or Student is a dislocated worker, or Student filed or was eligible to file a 1040A/1040EZ, filed a 1040 but was not required to do so, or was not required to file any income tax return TASFAA 2019

Auto-Zero for 2018-19 Same requirements as SNT except income threshold is less than $25,000 For independent students, those without dependents other than a spouse cannot receive an Automatic Zero EFC TASFAA 2019

EFC Formula Worksheets 18-19 EFC Formula Guide: https://ifap.ed.gov/efcformulaguide/attachments/071017EFCFormulaGuide1819.pdf 18-19 Financial Aid Handbook, Application and Verification Guide, Chapter 3: https://ifap.ed.gov/fsahandbook/attachments/1819FSAHbkAVGCh3.pdf 18-19 EFC Formula Table Federal Register Notice https://ifap.ed.gov/fregisters/FR050117.html TASFAA 2019

EFC Formula Worksheets 6 worksheets- determine which formula and whether the SNT is met Formula A Formula B Formula C Regular Simplified TASFAA 2019

TASFAA 2019 Example Suzie Student 1. Dependent or Independent? 2. AGI? 3. Which formula? A, B or C? 4. Simplified or Regular? TASFAA 2019

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What’s the EFC? TASFAA 2019

What’s the EFC? 5569 TASFAA 2019

Observations & Questions TASFAA 2019