1. Calculating the EFC Mandy Peterson March 8, 2007

2. Need Analysis Overview

3. Need Analysis Overview/Financial Need  Need analysis.  Overall process of determining a student’s financial need and eligibility for certain programs.  Generate the EFC.  EFC is a measurement of a family’s ability to contribute toward education cost.

4. Need Analysis Overview/Financial Need  Need Equation: Cost of Attendance -- Expected Family Contribution Financial Need

5. Need Analysis Overview/Financial Need  General elements of need analysis.  Information reported by the family.  Income.  Number of dependents.  Number of family members attending college.  Assets.  Marital status of the student.  Age of older parent of a dependent student.

6. Need Analysis Overview/Financial Need  General elements of need analysis.  Items considered by federal methodology prior to EFC calculation.  Additional expenses incurred.  Income and asset protection allowance.

7. Need Analysis Overview/Financial Need  General Elements of need analysis.  Dependency status.  Independent-student definition.  Age 24 or older as Dec. 31 of the award year.  Orphan or ward of the court.  Veteran.  Graduate or professional student.  Married student.  Student with legal dependents.  Person with unusual circumstances.  Active-duty members of the armed forces.

8. Need Analysis Overview/Financial Need  General elements of need analysis.  Dependency status.  Dependent-student definition.  All other students not referenced in the previous slide.  Must use parental information in determining EFC.

9. Need Analysis Overview/Financial Need  Federal methodology.  Only methodology for determining EFC.  Three models under FM.  Three formula options exists under FM.

10. Need Analysis Overview/Financial Need  Components of federal methodology.  Regular formula.  Income.  Allowance against income.  Assets.  Education savings and asset protection allowance.

11. Need Analysis Overview/Financial Need  Components of federal methodology.  Simplified-needs test.  Assets not considered.  Eligibility for simple formula.  Benefits from a federal means-tested program.  AGI less than $50,000.

12. Need Analysis Overview/Financial Need  Zero expected contribution.  AGI below $20,000.  Parents of dependents must be eligible to file 1040A or 1040EZ or not be required to file a federal tax form.

13. Need Analysis Overview/Financial Need  Guidelines for divorced or separated parents.  Rule 1.  Rule 2.  Rule 3.  Guidelines for remarried parents.

14. Need Analysis Overview/Financial Need  Definitions in Need Analysis (pages 5 – 7)

15. Race to Calculate the EFC

16. EFC Calculation  What is an EFC?  Why do you need to understand the EFC formulas?

17. EFC Calculation  Which EFC worksheet should be used?  What is Mario’s EFC?

18. 0 40,550 0 0 0 41,500 40,550 17,500 24,000

19. 3,394 406 1,339 1,836 18,680 6,125 3,200 28,855

20. 40,550 28,855 11,695

22. 2,573 1 11,695

23. 5,000 0 0 0 0

24. 0 0 383 0 3,383

25. 5,000 3,383 1,617 809

27. 2,573 809 3,382

28. Calculating the EFC Mandy Peterson March 8, 2007