Top Banner
Federal Methodology: Hand Calculation of EFC 1 Federal Methodology © 2014 NASFAA Training Track The following is a presentation prepared for: SASFAA Conference Jacksonville, FL February 16 – 19, 2014 2013–14 2 Amanda Sharp – NASFAA Training Specialist Division of Training & Regulatory Assistance Brad Barnett – Assistant Director of Financial Aid James Madison University © 2014 NASFAA 3 Today’s Agenda and Goals Describe the different Federal Methodology (FM) Models and when each should be used Explain each of the three expected family contribution (EFC) formulas Complete an EFC hand calculation
52

Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

May 15, 2018

Download

Documents

dinhkhuong
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

1 Federal Methodology© 2014 NASFAA

Training Track

The following is a presentation prepared for: SASFAA Conference

Jacksonville, FLFebruary 16 – 19, 2014

2013–14

2

Amanda Sharp – NASFAA Training SpecialistDivision of Training & Regulatory Assistance

Brad Barnett – Assistant Director of Financial AidJames Madison University

© 2014 NASFAA 3

Today’s Agenda and Goals

• Describe the different Federal Methodology (FM) Models and when each should be used

• Explain each of the three expected family contribution (EFC) formulas

• Complete an EFC hand calculation

Page 2: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

Federal Methodology 2 © 2014 NASFAA

© 2014 NASFAA 4

What is Need Analysis?

A system used to allocate limited financial aid resources, consisting of two components:

• A measure of the amount it will cost a student to attend a given school for a year, or the cost of attendance (COA)

• A measure of the family’s ability to contribute to those costs for a given year, or the expected family contribution (EFC)

© 2014 NASFAA 5

Federal Methodology

• Method for assessing ability to pay consists of two steps:

– Measuring the family’s financial strength

– Assessing a of family’s ability to contribute toward educational costs

• This assessment is made by placing the student into one of three classifications or models.

© 2014 NASFAA 6

Federal Methodology Models

Model A • Dependent

Model B

• Independent• No dependents

other than spouse

Model C

• Independent• Dependents

other than spouse

FM FORMULA

Page 3: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

3 Federal Methodology© 2014 NASFAA

© 2014 NASFAA 7

Federal Methodology Models

FM Formulas

Automatic Zero EFC

• Model A• Model C

Regular

• All Models

Simplified

• All Models

© 2014 NASFAA 8

Automatic Zero EFC

Who Qualifies for Automatic Zero EFC?

Model A –

EFC automaticallyset to zero if parents meet certain federal tax filing and income

criteria

Model B –

Automatic Zero EFC is not applicable

Model C –

EFC automatically set to zero if student (and

spouse, if married) meets certain federal tax filing and income

criteria

© 2014 NASFAA 9

Automatic Zero EFC: Model A - First Criterion

Parents

• Filed or were eligible to file 2013 Form 1040A or 1040EZ;

• Filed 2013 Form 1040 but were not required to do so;

• Were not required to file any tax return; or• Filed income tax return required by tax

code for Puerto Rico, Guam, American Samoa, the U. S. Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau

Page 4: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

Federal Methodology 4 © 2014 NASFAA

© 2014 NASFAA 10

Automatic Zero EFC: Model A - First Criterion

OR

Received benefits during 2012 or 2013 under:• Supplemental Security Income (SSI);• Free and Reduced Price School Lunch;• Temporary Assistance for Needy Families (TANF);• Supplemental Nutrition Assistance Program (SNAP);

or• Special Supplemental Nutrition Program for Women,

Infants, and Children (WIC)

Anyone in Parents’Household

Parent Either parent is a dislocated worker

© 2014 NASFAA 11

Automatic Zero EFC: Model A - Second Criterion

Parents’

• 2013 Adjusted Gross Income (AGI) Income (AGI) ≤ $24,000 if tax filers; or

• 2013 total earned income ≤ $24,000 if nonfilers

© 2014 NASFAA 12

Automatic Zero EFC: Model C - First Criterion

Student (and Spouse)

• Filed or were eligible to file 2013 Form 1040A or 1040EZ;

• Filed 2013 Form 1040 but were not required to do so;

• Were not required to file any tax return; or• Filed income tax return required by tax

code for Puerto Rico, Guam, American Samoa, the U. S. Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau

OR

Page 5: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

5 Federal Methodology© 2014 NASFAA

© 2014 NASFAA 13

Automatic Zero EFC: Model C - First Criterion

OR

Received benefits during 2012 or 2013 under:• Supplemental Security Income (SSI);• Free and Reduced Price School Lunch;• Temporary Assistance for Needy Families;• Supplemental Nutrition Assistance Program (SNAP);

or• Special Supplemental Nutrition Program for Women,

Infants, and Children (WIC)

Anyone in Student’sHousehold

Student (or spouse)

Is a dislocated worker

© 2014 NASFAA 14

Automatic Zero EFC: Model C - Second Criterion

Student (and spouse)

• 2013 Adjusted Gross Income (AGI) Income (AGI) ≤ $24,000 if tax filers; or

• 2013 total earned income ≤ $24,000 if nonfilers

© 2014 NASFAA 15

Regular Formula

• Full Data Element Formula

• Specified-year income is used (i.e. 2013 for 2014–15)

• Allowances protect portions of income and assets

• Equal distribution of available resources among those attending postsecondary school at last half-time (except parents of dependent students)

Page 6: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

Federal Methodology 6 © 2014 NASFAA

© 2014 NASFAA 16

Regular Formula: Model A

Parent’s contribution

+ Student contribution from available income

+ Student contribution from assets

= Expected Family Contribution (9 month)

© 2014 NASFAA 17

Income Allowances Used When Calculating EFC

U.S. income taxes paid

State andother taxes

Social Security tax

Income protection allowance

Employment expense

allowance

© 2014 NASFAA 18

FM FORMULA

Income Protection Allowance

30.00%

22.00%9.00%

16.00%

11.00%

12.00% Food

Housing

Transportation

Clothing & Personal Care

Medical Care

Other family consumption

Page 7: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

7 Federal Methodology© 2014 NASFAA

© 2014 NASFAA 19

FM FORMULA

Regular Formula: Model B

+ Student’s contribution from available income (AI)

+ Student’s contribution from assets

= Contribution from AI and assets

Contribution from AI and assets

Number in college = EFC (9 month)

© 2014 NASFAA 20

Regular Formula: Model C

Calculation of the EFC of an independent student with dependent(s) other than a spouse is identical to calculation of the parents’ contribution for a dependent student, except for:

• Table values used to calculate state and local tax allowance and income protection allowance

• Asset conversion rate

© 2014 NASFAA 21

FM FORMULA

Simplified Formula

Excludes assets from EFC calculation

Two qualifying criteria

If assets reported on FAFSA,two EFC calculations:

Primary EFC from simplified formula

Secondary EFC from regular formula

Page 8: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

Federal Methodology 8 © 2014 NASFAA

© 2014 NASFAA 22

FM FORMULA

Simplified Formula: Model A - First Criterion

Parents

• Filed or were eligible to file 2013 Form 1040A or 1040EZ;

• Filed 2013 Form 1040 but were not required to do so;

• Were not required to file any tax return; or• Filed income tax return required by tax

code for Puerto Rico, Guam, American Samoa, the U. S. Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau

OR

© 2014 NASFAA 23

Simplified Formula: Model A - First Criterion

OR

Received benefits during 2012 or 2013 under:• Supplemental Security Income (SSI);• Free and Reduced Price School Lunch;• Temporary Assistance for Needy Families;• Supplemental Nutrition Assistance Program (SNAP);

or• Special Supplemental Nutrition Program for Women,

Infants, and Children (WIC)

Anyone in Parents’Household

Parent Either parent is a dislocated worker

© 2014 NASFAA 24

Simplified Formula: Model A –Second Criterion

Parents’• 2013 Adjusted Gross Income (AGI) Income

(AGI) ≤ $49,999 if tax filers; or• 2013 total earned income ≤ $49,999 if

nonfilers

Page 9: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

9 Federal Methodology© 2014 NASFAA

© 2014 NASFAA 25

Simplified Formula: Models B & C –First Criterion

Student

(and Spouse)

• Filed or were eligible to file 2013 Form 1040A or 1040EZ;

• Filed 2013 Form 1040 but were not required to do so;

• Were not required to file any tax return; or• Filed income tax return required by tax

code for Puerto Rico, Guam, American Samoa, the U. S. Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau

OR

© 2014 NASFAA 26

OR

Received benefits during 2012 or 2013 under:• Supplemental Security Income (SSI);• Free and Reduced Price School Lunch;• Temporary Assistance for Needy Families;• Supplemental Nutrition Assistance Program (SNAP);

or• Special Supplemental Nutrition Program for Women,

Infants, and Children (WIC)

Anyone in Student’sHousehold

Student (or Spouse)

Is a dislocated worker

Simplified Formula: Models B & C –First Criterion

© 2014 NASFAA 27

Simplified Formula: Models B & C –Second Criterion

Student

(and Spouse)

• 2013 Adjusted Gross Income (AGI) Income (AGI) ≤ $49,999 if tax filers; or

• 2013 total earned income ≤ $49,999 if nonfilers

Page 10: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

Federal Methodology 10 © 2014 NASFAA

© 2014 NASFAA 28

© 2014 NASFAA 29

EFC Calculation Case Study

To complete the case study you will use the following pieces of the handout:

• The case study description

• The blank 2014–15 EFC Formula A, Regular Worksheet

• Tables A1 through A6

© 2014 NASFAA 30

EFC Recalculation for Other than Nine Months

• EFC must be adjusted for enrollment period other than nine months for all Title IV programs other than Federal Pell Grant and Iraq and Afghanistan Service Grant (IASG) programs

• An enrollment period between 8 ½ months and 9 ½ months considered a 9-month enrollment period

Page 11: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology:Hand Calculation of EFC

11 Federal Methodology© 2014 NASFAA

© 2014 NASFAA 31

Federal Methodology Information Resources

• The Higher Education Act of 1965, as amended, Part F – Need Analysis

• 2013–14 FSA Handbook, Application and Verification Guide (AVG), Chapters 2 and 3

• EFC Formula Guide, 2014–15

• The ISIR Guide, 2014–15

• 2014–15 Free Application for Federal Student Aid

© 2014 NASFAA 32

Please send your questions to: [email protected]

Page 12: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology 12 © 2014 NASFAA

This page intentionally left blank.

Page 13: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Overview of 2014–15 Federal Methodology Formulas

DEPENDENT INDEPENDENT WITHOUT DEPENDENTS

OTHER THAN A SPOUSE INDEPENDENT WITH DEPENDENTS

OTHER THAN A SPOUSE

Model A – Automatic Zero EFC Model B – Automatic Zero EFC Model C – Automatic Zero EFC

Expected Family Contribution (EFC) automatically set to zero if student’s parents meet certain income and federal tax filing criteria.

Automatic Zero EFC is not applicable. EFC automatically set to zero if student (and spouse, if married) meets certain income and federal tax filing criteria.

Model A – Simplified Formula Model B – Simplified Formula Model C – Simplified Formula

EFC calculation excludes student’s and parents’ assets.

EFC calculation excludes student’s and, if married, spouse’s assets.

EFC calculation excludes student’s and, if married, spouse’s assets.

Model A – Regular Formula Model B – Regular Formula Model C – Regular Formula

EFC calculated using student’s and parents’ income and asset information.

EFC calculated using student’s and, if married, spouse’s income and asset information.

EFC calculated using student’s and, if married, spouse’s income and asset information.

Expected Family Contribution (EFC) Parents’ contribution + Student’s contribution from available

income + Student’s contribution from assets

Expected Family Contribution (EFC) (Contribution from available income + Contribution from assets) Number in college

Expected Family Contribution (EFC) (Total contribution from adjusted available income) Number in college

Student’s Contribution from Available Income (Total income – Total allowances) x .50

Contribution from Available Income (Total income – Total allowances) x .50

Total Contribution from Adjusted Available Income

Application of Table C6 to (Available income + Contribution from assets)

Adjusted Available Income (Total income – Total allowances) + Contribution from Assets

Total Income (Student) Taxable income + Untaxed income and benefits – Total additional financial information (excluded income)

Total Income Taxable income + Untaxed income and benefits – Total additional financial information (excluded income)

Total Income Taxable income + Untaxed income and benefits – Total additional financial information (excluded income)

© 2014 N

AS

FA

A

13 F

ederal Methodology

Page 14: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

DEPENDENT INDEPENDENT WITHOUT DEPENDENTS

OTHER THAN A SPOUSE INDEPENDENT WITH DEPENDENTS

OTHER THAN A SPOUSE

Model A – Regular Formula Model B – Regular Formula Model C – Regular Formula

Total Allowances (Student) U.S. income tax paid + State and other tax allowance + Social Security tax allowance + Income protection allowance + Allowance for parents’ negative adjusted available income

Total Allowances U.S. income tax paid + State and other tax allowance + Student’s Social Security tax + Spouse’s Social Security tax + Income protection allowance + Employment expense allowance

Total Allowances U.S. income tax paid + State and other tax allowance + Student’s Social Security tax + Spouse’s Social Security tax + Income protection allowance + Employment expense allowance

Student’s Contribution from Assets Net worth x .20

Contribution from Assets Discretionary net worth x .20

Contribution from Assets Discretionary net worth x .07

Net Worth (Student) Cash, savings, and checking + Net worth of investments + Net worth of business and/or farm

Discretionary Net Worth Cash, savings, and checking + Net worth of investments + Adjusted net worth of business and/or

farm – Asset protection allowance

Discretionary Net Worth Cash, savings, and checking + Net worth of investments + Adjusted net worth of business and/or

farm – Asset protection allowance

Parents’ Contribution Total parents’ contribution from adjusted available income Number in college

Parents’ Contribution—Not applicable Parents’ Contribution—Not applicable

Available Income (Parents) Total income – Total allowances

Adjusted Available Income (Parents) Available income + Contribution from assets

Total Contribution from Adjusted Available Income (Parents) Application of Table A6 to (Available income + Contribution from assets)

Federal M

ethodology 14

© 2014 N

AS

FA

A

Page 15: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

DEPENDENT INDEPENDENT WITHOUT DEPENDENTS

OTHER THAN A SPOUSE INDEPENDENT WITH DEPENDENTS

OTHER THAN A SPOUSE

Model A – Regular Formula Model B – Regular Formula Model C – Regular Formula

Total Income (Parents) Taxable income + Untaxed income and benefits – Total additional financial information (excluded income)

Total Allowances (Parents) U.S. income tax paid + State and other tax allowance + Father’s Social Security tax allowance + Mother’s Social Security tax allowance + Income protection allowance + Employment expense allowance

Contribution From Assets (Parents) Discretionary net worth x .12

Discretionary Net Worth (Parents) Cash, savings, and checking + Net worth of investments + Adjusted net worth of business and/or

farm – Education savings and asset protection allowance

© 2014 N

AS

FA

A

15 F

ederal Methodology

Page 16: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology 16 © 2014 NASFAA

This page intentionally left blank.

Page 17: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

© 2014 NASFAA 17 Federal Methodology

Definitions The following definitions are used to determine whether a student meets the criteria for use of the Automatic Zero EFC or Simplified Formula. Dislocated worker: A person who:

Meets all of the following:

Was terminated or laid off from employment or received a notice of termination or layoff;

Is eligible for or has exhausted his or her unemployment compensation, or he or she is not eligible because, even though he or she has been employed long enough to demonstrate attachment to the workforce, he or she had insufficient earnings or performed services for an employer that were not covered under a state’s unemployment compensation law; and

Is unlikely to return to a previous occupation;

Was terminated or laid off from employment or received a notice of termination or layoff as a result of any permanent closure of, or any substantial layoff at, a plant, facility, or enterprise;

Is employed at a facility at which the employer made a general announcement that it will close within 180 days;

Was self-employed but is now unemployed due to economic conditions or natural disaster; or

Is a displaced homemaker. Displaced homemaker: A person who:

Previously provided unpaid services to the family (e.g., a stay-at-home parent);

Is no longer supported by another family member’s income; and

Is unemployed or underemployed, and is having trouble finding or upgrading employment. Underemployed: A person is underemployed if he or she is working:

Part time, but wants to work full time; or

Below the demonstrated level of his or her education or job skills. The following definitions apply to the terms used in regular and simplified formulas to calculate the EFC. Untaxed income: Amounts and types of untaxed income and benefits collected on the 2014–15 FAFSA in question 45 for the student and in question 94 for the dependent student’s parent(s). Additional financial information: Types of funds or tax credits collected on the 2014–15 FAFSA in question 44 for the student and in question 93 for the dependent student’s parent(s) that are excluded from income when calculating the student’s EFC include:

Education credits;

Child support paid;

Taxable earnings from need-based employment programs (e.g., Federal Work-Study and need-based employment portions of fellowships and assistantships);

Taxable student grant and scholarship aid (including AmeriCorps awards, living allowances, and interest

accrual payments) reported to the Internal Revenue Service (IRS) in the filer’s adjusted gross income;

Taxable portion of combat or special combat pay; and

Earnings from a cooperative education program.

Page 18: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology 18 © 2014 NASFAA

Income protection allowance (IPA): An annually updated allowance [based on family size and number in college (excluding parents if a dependent student)] for basic living expenses necessary to maintain the family, including food, housing, transportation, clothing, personal care, and medical care; a benchmark based on an income level below which the household is assumed to have no discretionary income. Employment allowance: An allowance that recognizes extra expenses (e.g., housekeeping services, meals away from home, clothing and upkeep, and transportation) a family incurs when:

Both parents of a dependent student are employed;

The single parent of a dependent student is employed; or

An independent student and his or her spouse are employed. Education savings and asset protection allowance: For the parents of a dependent student, an allowance that protects a portion of the parents’ assets for retirement and emergencies, and to encourage saving for postsecondary education. Asset protection allowance: For an independent student, an allowance that protects a portion of the student’s (and spouse’s) assets for retirement and emergencies.

Page 19: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

WORKSHEETS AND TABLES

Dependent Students FormulaAWorksheet...........................................................................pages21–24 SimplifiedFormulaAWorksheet........................................................pages25–28 TablesA1throughA7...........................................................................pages29–32Independent Students Without Dependents Other than a Spouse FormulaBWorksheet...........................................................................pages33–34 SimplifiedFormulaBWorksheet.........................................................pages35–36 TablesB1throughB4...........................................................................pages37–39Independent Students With Dependents Other than a Spouse FormulaCWorksheet...........................................................................pages41–42 SimplifiedFormulaCWorksheet.........................................................pages43–44 TablesC1throughC6...........................................................................pages45–47

Note: Do not complete the shaded areas in the simplified worksheets; asset information is not required in the simplified formulas.

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 19 Federal Methodology
Dakotadtp
Text Box
This handout contains pages excerpted from The EFC Formula, 2014-15, a U.S. Department of Education publication. You may access the publication in its entirety at the Information for Financial Aid Professionals (IFAP) website at http://ifap.ed.gov/ifap/index.jsp.
Page 20: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

This page left blank intentionally.

Dakotadtp
Text Box
Federal Methodology 20 Reprinted from The EFC Formula, 2014-15
Page 21: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

continued on the next page

2014–2015 EFC FORMULA A : DEPENDENT STUDENT

16. Cash,savings&checking(FAFSA/SAR#90)

17. Networthofinvestments** (FAFSA/SAR#91)Ifnegative,enterzero.

18. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#92) Ifnegative,enterzero.

19. Adjustednetworthofbusiness/farm (CalculateusingTableA4.) +

20. Net worth (sumoflines16,17,and19) = 21. Educationsavingsandasset protectionallowance(TableA5) − 22. Discretionarynetworth (line20minusline21) =

23. Assetconversionrate × .12 24. CONTRIBUTION FROM ASSETS Ifnegative,enterzero. =

**Donotincludethefamily’shome.

***Tocalculatetheparents’contributionforotherthannine-monthenrollment,seepage11.

PARENTS’ CONTRIBUTION FROM ASSETS

PARENTS’ CONTRIBUTION

AVAILABLE INCOME (AI) (fromline15)

CONTRIBUTION FROM ASSETS (fromline24) +

25. Adjusted Available Income (AAI) Maybeanegativenumber. =

26. Total parents’ contribution from AAI (CalculateusingTableA6.)Ifnegative,enterzero.

27. Number in college in 2014–2015 (Excludeparents)(FAFSA/SAR#74) ÷ 28. PARENTS’ CONTRIBUTION (standard contributionfornine-monthenrollment)*** Ifnegative,enterzero. =

AVAILABLE INCOME

Total income (from line7) Total allowances (from line14) −

15. AVAILABLE INCOME (AI) Maybe a negativenumber. =

REGULAR WORKSHEETPage 1

*STOPHEREifthefollowingaretrue:Line3is$24,000orlessand

• Theparentsareeligibletofilea2013IRSForm1040Aor1040EZ(theyarenotrequiredtofilea2013Form1040)ortheyarenotrequiredtofileanyincometaxreturnor•Anyoneincludedintheparents’householdsize(asdefinedontheFAFSA)receivedbenefitsduring2012or2013fromanyofthedesignatedmeans-testedfederalbenefitprogramsor•Eitheroftheparentsisadislocatedworker.

Ifthesecircumstancesaretrue,theExpectedFamilyContributionisautomaticallyzero.

8. 2013U.S. income taxpaid (FAFSA/SAR#86)(taxfilers only) If negative, enter zero.

9. State andother tax allowance (TableA1) If negative, enter zero. +

10. Parent 1 (father/mother/stepparent)Social Security tax allowance (TableA2) +

11. Parent 2 (father/mother/stepparent)Social Security tax allowance (TableA2) +

12. Incomeprotection allowance (TableA3) +13. Employment expense allowance: • Twoworkingparents (Parents’MaritalStatus is “married”or “unmarried andbothparents living together”): 35%of the lesser of the earned incomes, or $4,000,whichever is less

• One-parent families: 35%of earned income, or $4,000,whichever is less • Two-parent families, oneworking parent: enter zero +

14. TOTAL ALLOWANCES =

ALLOWANCES AGAINST PARENTS’ INCOME

PARENTS’ INCOME IN 20131. Parents’AdjustedGrossIncome(FAFSA/SAR#85) Ifnegative,enterzero.2. a. Parent1(father/mother/stepparent)income earnedfromwork(FAFSA/SAR#88)__________

2. b. Parent2(father/mother/stepparent)income earnedfromwork(FAFSA/SAR#89) + __________

Totalparents’incomeearnedfromwork =

3. Parents’TaxableIncome(Iftaxfilers,entertheamountfromline1above. Ifnon-taxfilers,entertheamountfromline2.)*

4. Totaluntaxedincomeandbenefits:(TotalofFAFSA/SAR#94a.through94i.) +

5. Taxableanduntaxedincome (sumofline3andline4) =

6. Totaladditionalfinancialinformation(TotalofFAFSA/SAR#93a.through93f.)− 7. TOTAL INCOME (line5minusline6)Maybeanegativenumber. =

A

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 21 Federal Methodology
Page 22: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

AREGULAR WORKSHEET Page 2

STUDENT’S CONTRIBUTION FROM ASSETSSTUDENT’S INCOME IN 2013

29. AdjustedGrossIncome(FAFSA/SAR#36) Ifnegative,enterzero.

30. Incomeearnedfromwork(FAFSA/SAR#39)

31. TaxableIncome (Iftaxfiler,entertheamountfromline29above. Ifnon-taxfiler,entertheamountfromline30.)

32. Totaluntaxedincomeandbenefits (TotalofFAFSA/SAR#45a.through45j.)+33. Taxableanduntaxedincome (sumofline31andline32) =

34. Totaladditionalfinancialinformation (TotalofFAFSA/SAR#44a.through44f.)−

35. TOTAL INCOME (line33minusline34) = Maybeanegativenumber.

Total income (from line35) Total allowances (from line41) −

42. Available income (AI) =

43. Assessment of AI × .50

44. STUDENT’S CONTRIBUTION FROM AI = Ifnegative,enterzero.

STUDENT’S CONTRIBUTION FROM INCOME

EXPECTED FAMILY CONTRIBUTION

*Donot includethestudent’shome.

**TocalculatetheEFCforotherthannine-monthenrollment,seethenextpage.

PARENTS’ CONTRIBUTION(fromline28)

STUDENT’S CONTRIBUTION FROM AI(fromline44) +

STUDENT’S CONTRIBUTION FROM ASSETS (fromline50) +

51. EXPECTED FAMILY CONTRIBUTION (standardcontributionfornine-monthenrollment)**Ifnegative,enterzero. =

ALLOWANCES AGAINST STUDENT INCOME

36. 2013U.S. income taxpaid (FAFSA/SAR#37) (taxfilers only) If negative, enter zero.

37. State andother tax allowance (TableA7) If negative, enter zero. +

38. SocialSecurity tax allowance (TableA2) +

39. Incomeprotection allowance + 6,260

40. Allowance for parents’ negativeAdjusted Available Income (If line25 is negative, enter line25 as a positivenumber in line40. If line25 is zeroor positive, enter zero in line40.) +

41. TOTAL ALLOWANCES =

45. Cash,savings&checking(FAFSA/SAR#41)

46. Networthofinvestments* (FAFSA/SAR#42)Ifnegative,enterzero.

47. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#43) Ifnegative,enterzero. +

48. Net worth (sumoflines45through47) = 49.Assessmentrate × .20 50. STUDENT’S CONTRIBUTION FROM ASSETS =

Dakotadtp
Text Box
Federal Methodology 22 Reprinted from The EFC Formula, 2014-15
Page 23: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Calculation of Student’s Contribution from Available Income (AI) for a Student Enrolled LESS than Nine Months*

Calculation of Parents’ Contribution for a Student Enrolled LESS than Nine Months

REGULARWORKSHEET Page 3 A

Calculation of Parents’ Contribution for a Student Enrolled MORE than Nine Months

B1.Parents’AdjustedAvailableIncome(AAI)(fromline25—maybeanegativenumber)

B2.Differencebetweentheincomeprotectionallowancefora familyoffourandafamilyoffive,withoneincollege + 4,820

B3.Alternateparents’AAIformorethannine-monthenrollment(lineB1+lineB2) =

B4.Totalparents’contributionfromalternateAAI(calculateusingTableA6)

B5.Numberincollege(FAFSA/SAR#74) ÷

B6.Alternateparents’contributionforstudent(lineB4dividedbylineB5) =

B7.Standardparents’contributionforthestudentfornine-monthenrollment(fromline28) −

B8.Difference(lineB6minuslineB7) =

B9.DividelineB8by12months ÷ 12

B10.Parents’contributionpermonth =

B11.Numberofmonthsstudentwillbeenrolledthatexceed9 ×

B12.Adjustmenttoparents’contributionformonthsthatexceednine(multiplylineB10bylineB11) =

B13.Standardparents’contributionfornine-monthenrollment(fromline28) +

B14. Parents’ contribution for MORE than nine-month enrollment =

Note: Use this additional page to prorate the EFC only if the student will be enrolled for other than nine months and only to determine the student’s need for Campus-Based aid, or a Federal Direct Subsidized Loan. Do not use this page to prorate the EFC for a Federal Pell Grant or TEACH Grant. The EFC for the Federal Pell Grant Program is the nine-month EFC used in conjunction with the cost of attendance to determine a Federal Pell Grant award from the Payment or Disbursement Schedule.

Use next page to calculate total EFC for enrollment periods other than nine months*Forstudentsenrolledmorethanninemonths,thestandardcontributionfromAIisused(theamountfromline44).

A1.Parents’contribution(standardcontributionfornine-monthenrollment,fromline28)

A2.Divideby9 ÷ 9

A3.Parents’contributionpermonth =

A4.Multiplybynumberofmonthsofenrollment ×

A5. Parents’ contribution for LESS than nine-month enrollment =

C1.Student’scontributionfromAI(standardcontributionfornine-monthenrollment,fromline44)

C2.Divideby9 ÷ 9

C3.Student’scontributionfromAIpermonth =

C4.Multiplybynumberofmonthsofenrollment ×

C5. Student’s contribution from AI for LESS than nine-month enrollment =

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 23 Federal Methodology
Page 24: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Calculation of Total Expected Family Contribution for Periods of Enrollment Other than Nine Months

AREGULAR WORKSHEETPage 4

Parents’ Contribution—use ONE appropriate amount from previous page: •EnteramountfromlineA5forenrollmentperiodslessthanninemonthsOR•EnteramountfromlineB14forenrollmentperiodsgreaterthanninemonths

Student’s Contribution from Available Income—use ONE appropriate amount from previous page:•EnteramountfromlineC5forenrollmentperiodslessthanninemonthsOR +•Enteramountfromline44forenrollmentperiodsgreaterthanninemonths Student’s Contribution from Assets•Enteramountfromline50 +

Expected Family Contribution for periods of enrollment other than nine months =

Dakotadtp
Text Box
Federal Methodology 24 Reprinted from The EFC Formula, 2014-15
Page 25: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

continued on the next page

Note: Do not complete the shaded areas; asset information is not required in the simplified formula.

2014–2015 EFC FORMULA A : DEPENDENT STUDENT

**Donotincludethefamily’shome.

***Tocalculatetheparents’contributionforotherthannine-monthenrollment,seepage15.

AVAILABLE INCOME (AI) (fromline15)

CONTRIBUTION FROM ASSETS (fromline24) +

25. Adjusted Available Income (AAI) Maybeanegativenumber. =

26. Total parents’ contribution from AAI (CalculateusingTableA6.)Ifnegative,enterzero.

27. Number in college in 2014–2015 (Excludeparents)(FAFSA/SAR#74) ÷ 28. PARENTS’ CONTRIBUTION (standard contributionfornine-monthenrollment)***Ifnegative,enterzero. =

PARENTS’ CONTRIBUTION

PARENTS’ INCOME IN 20131. Parents’AdjustedGrossIncome(FAFSA/SAR#85) Ifnegative,enterzero.2. a. Parent1(father/mother/stepparent)income earnedfromwork(FAFSA/SAR#88)__________

2. b. Parent2(father/mother/stepparent)income earnedfromwork(FAFSA/SAR#89) + __________

Totalparents’incomeearnedfromwork =

3. Parents’TaxableIncome(Iftaxfilers,entertheamountfromline1above. Ifnon-taxfilers,entertheamountfromline2.)*

4. Totaluntaxedincomeandbenefits(sumtotalofFAFSA/SAR#94a.through94i.) +

5. Taxableanduntaxedincome (sumofline3andline4) =

6. Totaladditionalfinancialinformation(sumtotalofFAFSA/SAR#93a.through93f.) −

7. TOTAL INCOME (line5minusline6)Maybeanegativenumber. =

*STOPHEREifthefollowingaretrue:Line3is$24,000orlessand• Theparentsareeligibletofilea2013IRSForm1040Aor1040EZ(theyarenotrequiredtofilea2013Form1040)ortheyarenotrequiredtofileanyincometaxreturnor•Anyoneincludedintheparents’householdsize(asdefinedontheFAFSA)receivedbenefitsduring2012or2013fromanyofthedesignatedmeans-testedfederalbenefitprogramsor•Eitheroftheparentsisadislocatedworker.

Ifthesecircumstancesaretrue,theExpectedFamilyContributionisautomaticallyzero.

1 16. Cash,savings&checking(FAFSA/SAR#90)

17. Networthofinvestments** (FAFSA/SAR#91)Ifnegative,enterzero.

18. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#92) Ifnegative,enterzero.

19. Adjustednetworthofbusiness/farm (CalculateusingTableA4.) + 20. Net worth (sumoflines16,17,and19) = 21. Educationsavingsandasset protectionallowance(TableA5) − 22. Discretionarynetworth (line20minusline21) =

23. Assetconversionrate × .12 24. CONTRIBUTION FROM ASSETS Ifnegative,enterzero. =

PARENTS’ CONTRIBUTION FROM ASSETS

8. 2013U.S. income taxpaid (FAFSA/SAR#86)(taxfilers only) If negative, enter zero.

9. State andother tax allowance (TableA1) If negative, enter zero. +

10. Parent 1 (father/mother/stepparent)Social Security tax allowance (TableA2) +

11. Parent 2 (father/mother/stepparent)Social Security tax allowance (TableA2) +

12. Incomeprotection allowance (TableA3) +13. Employment expense allowance: • Twoworkingparents (Parents’MaritalStatus is “married”or “unmarried andbothparents living together”): 35%of the lesser of the earned incomes, or $4,000,whichever is less • One-parent families: 35%of earned income, or $4,000,whichever is less • Two-parent families, oneworking parent: enter zero +

14. TOTAL ALLOWANCES =

ALLOWANCES AGAINST PARENTS’ INCOME

TOTAL INCOME (from line7) TOTAL ALLOWANCES (from line14) −

15. AVAILABLE INCOME (AI) Maybe a negativenumber. =

AVAILABLE INCOME

ASIMPLIFIEDWORKSHEET Page 1

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 25 Federal Methodology
Page 26: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Note: Do not complete the shaded areas; asset information is not required in the simplified formula.

EXPECTED FAMILY CONTRIBUTION

*Donot includethestudent’shome.

**TocalculatetheEFCforotherthannine-monthenrollment,seethenextpage.

PARENTS’ CONTRIBUTION(fromline28)

STUDENT’S CONTRIBUTION FROM AI(fromline44) +

STUDENT’S CONTRIBUTION FROM ASSETS (fromline50) +

51. EXPECTED FAMILY CONTRIBUTION standardcontributionforninemonthenrollment.Ifnegative,enterzero.** =

STUDENT’S CONTRIBUTION FROM ASSETS 45. Cash,savings&checking(FAFSA/SAR#41) +

46. Networthofinvestments*(FAFSA/SAR#42)

Ifnegative,enterzero.

47. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#43)Ifnegative,enterzero. +

48. Net worth (sumoflines45through47) =

49.Assessmentrate × .20 50. STUDENT’S CONTRIBUTION FROM ASSETS =

Total income (from line35) Total allowances (from line41) −

42. Available income (AI) =

43. Assessment of AI × .50

44. STUDENT’S CONTRIBUTION FROM AI Ifnegative,enterzero. =

STUDENT’S CONTRIBUTION FROM INCOME

ALLOWANCES AGAINST STUDENT INCOME

36. 2013U.S. income taxpaid (FAFSA/SAR#37) (taxfilers only) If negative, enter zero.

37. State andother tax allowance (TableA7) If negative, enter zero. +

38. SocialSecurity tax allowance (TableA2) +

39. Incomeprotection allowance + 6,260

40. Allowance for parents’ negativeAdjusted Available Income (If line25 is negative, enter line25 as a positivenumber in line40. If line25 is zeroor positive, enter zero in line40.) +

41. TOTAL ALLOWANCES =

ASIMPLIFIED WORKSHEETPage 2

STUDENT’S INCOME IN 2013

29. AdjustedGrossIncome(FAFSA/SAR#36) Ifnegative,enterzero.

30. Incomeearnedfromwork(FAFSA/SAR#39)

31. TaxableIncome (Iftaxfiler,entertheamountfromline29above. Ifnon-taxfiler,entertheamountfromline30.)

32. Totaluntaxedincomeandbenefits (TotalofFAFSA/SAR#45a.through45j.)+33. Taxableanduntaxedincome (sumofline31andline32) =

34. Totaladditionalfinancialinformation (TotalofFAFSA/SAR#44a.through44f.) −35. TOTAL INCOME (line33minusline34) Maybeanegativenumber.=

Dakotadtp
Text Box
Federal Methodology 26 Reprinted from The EFC Formula, 2014-15
Page 27: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Note: Use this additional page to prorate the EFC only if the student will be enrolled for other than nine months and only to determine the student’s need for Campus-Based aid, or a Federal Direct Subsidized Loan. Do not use this page to prorate the EFC for a Federal Pell Grant or TEACH Grant. The EFC for the Federal Pell Grant Program is the nine-month EFC used in conjunction with the cost of attendance to determine a Federal Pell Grant award from the Payment or Disbursement Schedule.

ASIMPLIFIEDWORKSHEETPage 3

Calculation of Student’s Contribution from Available Income (AI) for a Student Enrolled LESS than Nine Months*

Calculation of Parents’ Contribution for a Student Enrolled MORE than Nine Months

Use next page to calculate total EFC for enrollment periods other than nine months*Forstudentsenrolledmorethanninemonths,thestandardcontributionfromAIisused(theamountfromline44).

Calculation of Parents’ Contribution for a Student Enrolled LESS than Nine Months

A1.Parents’contribution(standardcontributionfornine-monthenrollment,fromline28)

A2.Divideby9 ÷ 9

A3.Parents’contributionpermonth =

A4.Multiplybynumberofmonthsofenrollment ×

A5. Parents’ contribution for LESS than nine-month enrollment =

B1.Parents’AdjustedAvailableIncome(AAI)(fromline25—maybeanegativenumber)

B2.Differencebetweentheincomeprotectionallowancefora familyoffourandafamilyoffive,withoneincollege + 4,820

B3.Alternateparents’AAIformorethannine-monthenrollment(lineB1+lineB2) =

B4.Totalparents’contributionfromalternateAAI(calculateusingTableA6)B5.Numberincollege(FAFSA/SAR#74) ÷

B6.Alternateparents’contributionforstudent(lineB4dividedbylineB5) =

B7.Standardparents’contributionforthestudentfornine-monthenrollment(fromline28) −

B8.Difference(lineB6minuslineB7) =

B9.DividelineB8by12months ÷ 12

B10.Parents’contributionpermonth =

B11.Numberofmonthsstudentwillbeenrolledthatexceed9 ×

B12.Adjustmenttoparents’contributionformonthsthatexceednine(multiplylineB10bylineB11) =

B13.Standardparents’contributionfornine-monthenrollment(fromline28) +

B14. Parents’ contribution for MORE than nine-month enrollment =

C1.Student’scontributionfromAI(standardcontributionfornine-monthenrollment,fromline44)

C2.Divideby9 ÷ 9

C3.Student’scontributionfromAIpermonth =

C4.Multiplybynumberofmonthsofenrollment ×

C5. Student’s contribution from AI for LESS than nine-month enrollment =

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 27 Federal Methodology
Page 28: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Parents’ Contribution—use ONE appropriate amount from previous page: •EnteramountfromlineA5forenrollmentperiodslessthanninemonthsOR•EnteramountfromlineB14forenrollmentperiodsgreatherthanninemonths

Student’s Contribution from Available Income—use ONE appropriate amount from previous page:•EnteramountfromlineC5forenrollmentperiodslessthanninemonthsOR +•Enteramountfromline44forenrollmentperiodsgreaterthanninemonths

Expected Family Contribution for periods of enrollment other than nine months =

Calculation of Total Expected Family Contribution for Periods of Enrollment Other than Nine Months

SIMPLIFIEDWORKSHEETPage 4 A

Dakotadtp
Text Box
Federal Methodology 28 Reprinted from The EFC Formula, 2014-15
Page 29: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Table A1: State and Other Tax Allowancefor EFC Formula A Worksheet (parents only)

STATE PERCENTOFTOTALINCOME $0–$14,999$15,000 ormore

STATE PERCENTOFTOTALINCOME $0–$14,999$15,000 ormore

MultiplyParents’TotalIncome(EFCFormulaAWorksheet,line7)bytheappropriateratefromthetableabovetogetthe“StateandOtherTaxAllowance”(EFCFormulaAWorksheet,line9).Usetheparents’StateofLegalResidence (FAFSA/SAR#70).Ifthisitemisblankorinvalid,usethestudent’sStateofLegalResidence (FAFSA/SAR#18).Ifbothitemsareblankorinvalid,usetheStateintheStudent’sMailingAddress(FAFSA/SAR#6).Ifallthreeitemsareblankorinvalid,usetherateforablankorinvalidstateabove.

Alabama........................ 3%.................... 2%Alaska........................... 2%.................... 1%AmericanSamoa........... 2%.................... 1%Arizona......................... 4%.................... 3%Arkansas....................... 4%.................... 3%California...................... 8%.................... 7%CanadaandCanadianProvinces................. 2%.................... 1%Colorado....................... 4%.................... 3%Connecticut................... 8%.................... 7%Delaware....................... 5%.................... 4%DistrictofColumbia..... 7%.................... 6%FederatedStates ofMicronesia........... 2%.................... 1%Florida........................... 3%.................... 2%Georgia.......................... 5%.................... 4%Guam............................. 2%.................... 1%Hawaii........................... 4%.................... 3%Idaho............................. 5%.................... 4%Illinois........................... 5%.................... 4%Indiana.......................... 4%.................... 3%Iowa.............................. 5%.................... 4%Kansas........................... 5%.................... 4%Kentucky....................... 5%.................... 4%Louisiana....................... 3%.................... 2%Maine............................ 6%.................... 5%MarshallIslands............ 2%.................... 1%Maryland....................... 8%.................... 7%Massachusetts............... 7%.................... 6%Mexico.......................... 2%.................... 1%Michigan....................... 5%.................... 4%Minnesota..................... 6%.................... 5%Mississippi.................... 3%.................... 2%

Missouri........................ 5%.................... 4%Montana........................ 5%.................... 4%Nebraska....................... 5%.................... 4%Nevada.......................... 3%.................... 2%NewHampshire............ 5%.................... 4%NewJersey.................... 9%.................... 8%NewMexico.................. 3%.................... 2%NewYork...................... 9%.................... 8%NorthCarolina.............. 6%.................... 5%NorthDakota................ 2%.................... 1%NorthernMariana Islands...................... 2%.................... 1%Ohio.............................. 5%.................... 4%Oklahoma...................... 3%.................... 2%Oregon.......................... 7%.................... 6%Palau............................. 2%.................... 1%Pennsylvania................. 5%.................... 4%PuertoRico................... 2%.................... 1%RhodeIsland................. 7%.................... 6%SouthCarolina.............. 5%.................... 4%SouthDakota................ 2%.................... 1%Tennessee...................... 2%.................... 1%Texas............................. 3%.................... 2%Utah............................... 5%.................... 4%Vermont......................... 6%.................... 5%VirginIslands................ 2%.................... 1%Virginia......................... 6%.................... 5%Washington................... 4%.................... 3%WestVirginia................ 3%.................... 2%Wisconsin...................... 7%.................... 6%Wyoming....................... 2%.................. ..1%BlankorInvalid State......................... 2%.................... 1%OTHER......................... 2%.................... 1%

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 29 Federal Methodology
Page 30: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Table A2: Social Security TaxCalculateseparatelytheSocialSecuritytaxoffather,mother,andstudent.

Table A4: Business/Farm Net Worth Adjustmentfor EFC Formula A Worksheet (parents only)

Table A3: Income Protection AllowanceNumberinparents’household,including

student(FAFSA/SAR#73)

Numberofcollegestudentsinhousehold(FAFSA/SAR#74)

Note:Foreachadditionalfamilymember,add$4,180.Foreachadditionalcollegestudent(exceptparents),subtract$2,970.

If the net worth of a Then the adjusted business or farm is— net worth is—

Lessthan$1 $0

$1to$125,000 40%ofnetworthofbusiness/farm

$125,001to$375,000 $50,000 + 50% ofnetworthover$125,000

$375,001to$620,000 $175,000 + 60% ofnetworthover$375,000

$620,001ormore $322,000 + 100% ofnetworthover$620,000

Income Earned from Work* Social Security Tax

$0–$113,700 7.65%ofincome

$113,701orgreater $8,698.05+1.45%ofamountover$113,700

*Parent1(father/mother/stepparent)2013incomeearnedfromworkisFAFSA/SAR#88. Parent2(father/mother/stepparent)2013incomeearnedfromworkisFAFSA/SAR#89. Student’s2013incomeearnedfromwork isFAFSA/SAR#39. SocialSecuritytaxwillneverbelessthanzero.

1 2 3 42.......... $17,440$14,460 ——— ——— ——— 3.......... 21,72018,750 $15,770 ——— ———

4.......... 26,83023,840 20,870$17,890 ——— 5.......... 31,65028,670 25,70022,710 $19,7506.......... 37,02034,040 31,07028,09025,120

5

Dakotadtp
Text Box
Federal Methodology 30 Reprinted from The EFC Formula, 2014-15
Page 31: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Table A6: Parents’ Contribution from AAI

If parents’ AAI is— The parents’ contribution from AAI is—

Lessthan-$3,409 -$750

-$3,409 to $15,600 22%ofAAI

$15,601 to $19,600 $3,432 + 25%ofAAIover $15,600

$19,601 to $23,500 $4,432 + 29%ofAAIover $19,600$23,501 to $27,500 $5,563 + 34%ofAAIover $23,500

$27,501 to $31,500 $6,923 + 40%ofAAIover $27,500

$31,501ormore $8,523 + 47%ofAAIover $31,500

25orless $0$026............... 1,800 40027............... 3,600 80028............... 5,500 1,30029............... 7,300 1,70030............... 9,100 2,10031............... 10,900 2,50032............... 12,700 2,90033............... 14,600 3,40034............... 16,400 3,80035............... 18,200 4,20036............... 20,000 4,60037............... 21,800 5,00038............... 23,700 5,50039............... 25,500 5,90040............... 27,300 6,30041............... 27,900 6,50042............... 28,500 6,60043............... 29,200 6,80044............... 30,000 6,900

Age of older parent as of 12/31/2014*

Allowanceifthereare

twoparents**

Allowanceifthereisonlyoneparent

Age of older parent as of 12/31/2014*

Allowanceiftherearetwoparents**

Allowanceifthereisonlyoneparent

Table A5: Parents’ Education Savings and Asset Protection Allowance

for EFC Formula A Worksheet (parents only)

*DeterminetheageoftheolderparentlistedinFAFSA/SAR#64and#68asof12/31/2014.Ifnoparentdateofbirthisprovided,useage45.

**UsethetwoparentallowancewhentheParents’MaritalStatuslistedinFAFSA/SAR#59is“marriedorremarried”or“unmarriedandbothparentslivingtogether.”

45............... $30,700 $7,10046............... 31,500 7,20047............... 32,200 7,40048............... 33,000 7,60049............... 33,800 7,80050............... 34,600 8,00051............... 35,700 8,10052............... 36,500 8,30053............... 37,600 8,50054............... 38,500 8,70055............... 39,700 9,00056............... 40,600 9,20057............... 41,800 9,40058............... 43,000 9,70059............... 44,200 9,90060............... 45,500 10,20061............... 46,800 10,40062............... 48,100 10,70063............... 49,500 11,00064............... 50,900 11,30065orover.. 52,600 11,600

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 31 Federal Methodology
Page 32: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Multiplythestudent’stotalincome(EFCFormulaAWorksheet,line35)bytheappropriateratefromthetableabovetogetthe“stateandothertaxallowance”(EFCFormulaAWorksheet,line37).Usethestudent’s stateoflegalresidence(FAFSA/SAR#18).Ifthisitemisblankorinvalid,usethestateinthestudent’smailingaddress(FAFSA/SAR#6).Ifbothitemsareblankorin-valid,usetheparents’stateoflegalresidence(FAFSA/SAR#70).Ifallthreeitemsare blankorinvalid,usetherateforablankorinvalidstateabove.

Table A7: State and Other Tax Allowancefor EFC Formula A Worksheet (student only)

Alabama............................................ 2%Alaska............................................... 0%AmericanSamoa............................... 2%Arizona............................................. 2%Arkansas........................................... 3%California.......................................... 5%CanadaandCanadianProvinces..................................... 2%Colorado........................................... 3%Connecticut....................................... 5%Delaware........................................... 3%DistrictofColumbia......................... 5%FederatedStates ofMicronesia............................... 2%Florida............................................... 1%Georgia.............................................. 3%Guam................................................. 2%Hawaii............................................... 3%Idaho................................................. 3%Illinois............................................... 2%Indiana.............................................. 3%Iowa.................................................. 3%Kansas............................................... 3%Kentucky........................................... 4%Louisiana........................................... 2%Maine................................................ 4%MarshallIslands................................ 2%Maryland........................................... 5%Massachusetts................................... 4%Mexico.............................................. 2%Michigan........................................... 3%Minnesota......................................... 4%Mississippi........................................ 2%

Missouri............................................ 3%Montana............................................ 3%Nebraska........................................... 3%Nevada.............................................. 1%NewHampshire................................ 1%NewJersey........................................ 4%NewMexico...................................... 2%NewYork.......................................... 6%NorthCarolina.................................. 4%NorthDakota.................................... 1%NorthernMarianaIslands................. 2%Ohio.................................................. 3%Oklahoma.......................................... 2%Oregon.............................................. 5%Palau................................................. 2%Pennsylvania..................................... 3%PuertoRico....................................... 2%RhodeIsland..................................... 4%SouthCarolina.................................. 3%SouthDakota.................................... 1%Tennessee.......................................... 1%Texas................................................. 1%Utah................................................... 3%Vermont............................................. 3%VirginIslands.................................... 2%Virginia............................................. 4%Washington....................................... 1%WestVirginia.................................... 3%Wisconsin.......................................... 4%Wyoming........................................... 1%BlankorInvalidState....................... 2%OTHER............................................. 2%

Dakotadtp
Text Box
Federal Methodology 32 Reprinted from The EFC Formula, 2014-15
Page 33: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

TOTAL INCOME (from line7) TOTAL ALLOWANCES (from line14) −

15. AVAILABLE INCOME (AI) =

16. Assessment rate × .50

17. CONTRIBUTION FROM AI = Maybe a negativenumber.

BREGULAR WORKSHEETPage 1

CONTRIBUTION FROM AVAILABLE INCOME

2014–2015 EFC FORMULA B : INDEPENDENT STUDENT Without Dependent(s) Other than a Spouse

*Donotincludethestudent’shome.

**TocalculatetheEFCforlessthannine-monthenrollment,seethenextpage.Ifthestudentisenrolledformorethanninemonths,usethenine-monthEFC(line29above).

EXPECTED FAMILY CONTRIBUTIONCONTRIBUTION FROM AI (fromline17)Maybeanegativenumber.

CONTRIBUTION FROM ASSETS (fromline26) +

27. Contribution from AI and assets =

28. Number in college in 2014–2015 (FAFSA/SAR#96) ÷

29. EXPECTED FAMILY CONTRIBUTIONforninemonthenrollment.Ifnegative,enterzero.** =

18. Cash,savings&checking(FAFSA/SAR#41)

19. Networthofinvestments* (FAFSA/SAR#42)Ifnegative,enterzero.

20. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#43) Ifnegative,enterzero.

21. Adjustednetworthofbusiness/farm (CalculateusingTableB3.) + 22. Net worth (sumoflines18,19,and21) =

23. Assetprotectionallowance(TableB4) −

24. Discretionarynetworth(line22minusline23) =

25. Assetconversionrate × .20

26. CONTRIBUTION FROM ASSETS Ifnegative,enterzero.

STUDENT’S/SPOUSE’S CONTRIBUTION FROM ASSETS

8. 2013U.S. income taxpaid (FAFSA/SAR#37)(taxfilers only) If negative, enter zero.

9. State andother tax allowance (TableB1) If negative, enter zero. + 10. Student’sSocialSecurity tax (TableB2) +

11. Spouse’sSocialSecurity tax (TableB2) +

12. Incomeprotection allowance: • $9,730forsingle, separatedor

divorced/widowed student;

• $9,730for marriedstudent if spouse is enrolledat least1/2 time; • $15,600formarriedstudent if spouse isnot enrolledat least1/2 time. + 13. Employment expense allowance: • If student isnotmarriedor is separated, theallowance is zero. • If student ismarriedbutonlyoneperson is working (the studentor spouse), the allowance is zero. • If student ismarriedandboth student and spouseareworking, theallowance is 35%of the lesserof theearned incomes, or$4,000,whichever is less. +

14. TOTAL ALLOWANCES =

ALLOWANCES AGAINST STUDENT/SPOUSE INCOME

STUDENT/SPOUSE INCOME IN 2013

1. Student’sandspouse’sAdjustedGrossIncome(FAFSA/SAR#36)Ifnegative,enterzero.

2. a. Student’sincomeearnedfromwork (FAFSA/SAR#39) __________

2. b. Spouse’sincomeearnedfromwork (FAFSA/SAR#40) + __________

Totalstudent/spouseincomeearnedfromwork =

3. Student/spouseTaxableIncome(Iftaxfilers,entertheamountfromline1above. Ifnon-taxfilers,entertheamountfromline2.)

4. Totaluntaxedincomeandbenefits(sumtotalofFAFSA/SAR#45a.through45j.) +

5. Taxableanduntaxedincome(sumofline3andline4) =6. Totaladditionalfinancialinformation (sumtotalofFAFSA/SAR#44a.through44f.) − 7. TOTAL INCOME (line5minusline6)Maybeanegativenumber.=

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 33 Federal Methodology
Page 34: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Note: Use this additional page to prorate the EFC only if the student will be enrolled for other than nine months and only to determine the student’s need for Campus-Based aid, or a Federal Direct Subsidized Loan. Do not use this page to prorate the EFC for a Federal Pell Grant or TEACH Grant. The EFC for the Federal Pell Grant Program is the nine-month EFC used in conjunction with the cost of attendance to determine a Federal Pell Grant award from the Payment or Disbursement Schedule.

*Substitutethestudent’sEFCforlessthannine-monthenrollmentinplaceoftheEFCforthestandardnine-monthenrollment(EFCFormulaBWorksheet,line29).

ExpectedFamilyContribution(standardcontributionfornine-monthenrollment,fromline29)

Divideby9 ÷ 9

ExpectedFamilyContributionpermonth =

Multiplybynumberofmonthsofenrollment ×

Expected Family Contribution for less than nine-month enrollment* =

Calculation of Expected Family Contribution for a Student Enrolled for Less than Nine Months

REGULAR WORKSHEETPage 2 B

Dakotadtp
Text Box
Federal Methodology 34 Reprinted from The EFC Formula, 2014-15
Page 35: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

2014–2015 EFC FORMULA B : INDEPENDENT STUDENT Without Dependent(s) Other than a Spouse

TOTAL INCOME (from line7) TOTAL ALLOWANCES (from line14) −

15. AVAILABLE INCOME (AI) =

16. Assessment rate × .50

17. CONTRIBUTION FROM AI = Maybe a negativenumber.

BSIMPLIFIED WORKSHEETPage 1

CONTRIBUTION FROM AVAILABLE INCOME

18. Cash,savings&checking(FAFSA/SAR#41)

19. Networthofinvestments* (FAFSA/SAR#42)Ifnegative,enterzero.

20. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#43) Ifnegative,enterzero.

21. Adjustednetworthofbusiness/farm (CalculateusingTableB3.) + 22. Net worth (sumoflines18,19,and21) = 23. Assetprotectionallowance(TableB4) −

24. Discretionarynetworth(line22minusline23) =

25. Assetconversionrate × .20 26. CONTRIBUTION FROM ASSETS Ifnegative,enterzero.

STUDENT’S/SPOUSE’S CONTRIBUTION FROM ASSETS

Note: Do not complete the shaded areas; asset information is not required in the simplified formula.

EXPECTED FAMILY CONTRIBUTION

*Donotincludethestudent’shome.**TocalculatetheEFCforlessthannine-monthenrollment,seethenextpage.Ifthestudentisenrolledformorethanninemonths,usethenine-monthEFC(line29above).

CONTRIBUTION FROM AI (fromline17)Maybeanegativenumber. CONTRIBUTION FROM ASSETS (fromline26) + 27. Contribution from AI and assets = 28. Number in college in 2014–2015 (FAFSA/SAR#96) ÷ 29. EXPECTED FAMILY CONTRIBUTION fornine-monthenrollment.Ifnegative,enterzero.**=

ALLOWANCES AGAINST STUDENT/SPOUSE INCOME 8. 2013U.S. income taxpaid (FAFSA/SAR#37) (taxfilers only) If negative, enter zero. 9. State andother tax allowance (TableB1) If negative, enter zero. + 10. Student’sSocialSecurity tax (TableB2) +

11. Spouse’sSocialSecurity tax (TableB2) +

12. Incomeprotection allowance: • $9,730 for single, separatedor

divorced/widowed student;

• $9,730 for married student if spouse is enrolled at least 1/2 time; • $15,600 formarried student if only the student is enrolled at least 1/2 time. + 13. Employment expense allowance: • If student isnotmarriedor is separated, theallowance iszero. • If student ismarriedbutonlyoneperson is working (thestudentor spouse), the allowance iszero. • If student ismarriedandbothstudentand spouseareworking, theallowance is35% of the lesserof theearned incomes,or $4,000,whichever is less. +

14. TOTAL ALLOWANCES =

STUDENT/SPOUSE INCOME IN 2013

1. Student’sandspouse’sAdjustedGrossIncome(FAFSA/SAR#36)Ifnegative,enterzero.

2. a. Student’sincomeearnedfromwork (FAFSA/SAR#39) __________

2. b. Spouse’sincomeearnedfromwork (FAFSA/SAR#40) + __________

Totalstudent/spouseincomeearnedfromwork=

3. Student/spouseTaxableIncome(Iftaxfilers,entertheamountfromline1above. Ifnon-taxfilers,entertheamountfromline2.)

4. Totaluntaxedincomeandbenefits(sumtotalofFAFSA/SAR#45a.through45j.) +

5. Taxableanduntaxedincome(sumofline3andline4) =6. Totaladditionalfinancialinformation (sumtotalofFAFSA/SAR#44a.through44f.) − 7. TOTAL INCOME (line5minusline6)Maybeanegativenumber.=

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 35 Federal Methodology
Page 36: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Note: Use this additional page to prorate the EFC only if the student will be enrolled for other than nine months and only to determine the student’s need for Campus-Based aid, or a Federal Direct Subsidized Loan. Do not use this page to prorate the EFC for a Federal Pell Grant or TEACH Grant. The EFC for the Federal Pell Grant Program is the nine-month EFC used in conjunction with the cost of attendance to determine a Federal Pell Grant award from the Payment or Disbursement Schedule.

SIMPLIFIEDWORKSHEETPage 2

Calculation of Expected Family Contribution for a Student Enrolled for Less than Nine Months

*Substitutethestudent’sEFCforlessthannine-monthenrollmentinplaceoftheEFCforthestandardnine-monthenrollment(EFCFormulaBWorksheet,line29.)

ExpectedFamilyContribution(standardcontributionfornine-monthenrollment,fromline29)

Divideby9 ÷ 9

ExpectedFamilyContributionpermonth =

Multiplybynumberofmonthsofenrollment ×

Expected Family Contribution for less than nine-month enrollment* =

B

Dakotadtp
Text Box
Federal Methodology 36 Reprinted from The EFC Formula, 2014-15
Page 37: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Table B1: State and Other Tax Allowance

Multiplythetotalincomeofstudentandspouse(EFCFormulaBWorksheet,line7)bytheappropriateratefromthetableabovetogetthe“stateandothertaxallowance”(EFCFormulaBWorksheet,line9).Usethestudent’sStateofLegalResidence(FAFSA/SAR#18)reportedontheFAFSA.Ifthisitemisblankorinvalid,usetheStateintheStudent’sMailingAddress(FAFSA/SAR#6).Ifbothitemsareblankorinvalid,userateforblankorinvalidstateabove.

Alabama............................................ 2%Alaska............................................... 0%AmericanSamoa............................... 2%Arizona............................................. 2%Arkansas........................................... 3%California.......................................... 5%CanadaandCanadianProvinces..................................... 2%Colorado........................................... 3%Connecticut....................................... 5%Delaware........................................... 3%DistrictofColumbia......................... 5%FederatedStates ofMicronesia............................... 2%Florida............................................... 1%Georgia.............................................. 3%Guam................................................. 2%Hawaii............................................... 3%Idaho................................................. 3%Illinois............................................... 2%Indiana.............................................. 3%Iowa.................................................. 3%Kansas............................................... 3%Kentucky........................................... 4%Louisiana........................................... 2%Maine................................................ 4%MarshallIslands................................ 2%Maryland........................................... 5%Massachusetts................................... 4%Mexico.............................................. 2%Michigan........................................... 3%Minnesota......................................... 4%Mississippi........................................ 2%

Missouri............................................ 3%Montana............................................ 3%Nebraska........................................... 3%Nevada.............................................. 1%NewHampshire................................ 1%NewJersey........................................ 4%NewMexico...................................... 2%NewYork.......................................... 6%NorthCarolina.................................. 4%NorthDakota.................................... 1%NorthernMarianaIslands................. 2%Ohio.................................................. 3%Oklahoma.......................................... 2%Oregon.............................................. 5%Palau................................................. 2%Pennsylvania..................................... 3%PuertoRico....................................... 2%RhodeIsland..................................... 4%SouthCarolina.................................. 3%SouthDakota.................................... 1%Tennessee.......................................... 1%Texas................................................. 1%Utah................................................... 3%Vermont............................................. 3%VirginIslands.................................... 2%Virginia............................................. 4%Washington....................................... 1%WestVirginia.................................... 3%Wisconsin.......................................... 4%Wyoming........................................... 1%BlankorInvalidState....................... 2%OTHER............................................. 2%

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 37 Federal Methodology
Page 38: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

*Student’s2013incomeearnedfromworkisFAFSA/SAR#39. Spouse’s2013incomeearnedfromworkisFAFSA/SAR#40. SocialSecuritytaxwillneverbelessthanzero.

Table B2: Social Security TaxCalculateseparatelytheSocialSecuritytaxofstudentandspouse.

Table B3: Business/Farm Net Worth Adjustment

Income Earned from Work* Social Security Tax

$0–$113,700 7.65%ofincome

$113,701orgreater $8,698.05+1.45%ofamountover$113,700

If the net worth of a Then the adjusted business or farm is— net worth is—

Lessthan$1 $0

$1to$125,000 40%ofnetworthofbusiness/farm

$125,001to$375,000 $50,000 + 50% ofnetworthover$125,000

$375,001to$620,000 $175,000 + 60% ofnetworthover$375,000

$620,001ormore $322,000 + 100% ofnetworthover$620,000

Dakotadtp
Text Box
Federal Methodology 38 Reprinted from The EFC Formula, 2014-15
Page 39: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

*Determinestudent’sageasof12/31/2014fromstudent’sdateofbirth(FAFSA/SAR#9)

Table B4: Asset Protection Allowance

Age of studentas of 12/31/2014* Married

StudentUnmarriedStudent

Allowancefor— Age of studentas of 12/31/2014* Married

StudentUnmarriedStudent

Allowancefor—

25orless $0$026............... 1,800 40027............... 3,600 80028............... 5,500 1,30029............... 7,300 1,70030............... 9,100 2,10031............... 10,900 2,50032............... 12,700 2,90033............... 14,600 3,40034............... 16,400 3,80035............... 18,200 4,20036............... 20,000 4,60037............... 21,800 5,00038............... 23,700 5,50039............... 25,500 5,90040............... 27,300 6,30041............... 27,900 6,50042............... 28,500 6,60043............... 29,200 6,80044............... 30,000 6,900

45............... $30,700 $7,10046............... 31,500 7,20047............... 32,200 7,40048............... 33,000 7,60049............... 33,800 7,80050............... 34,600 8,00051............... 35,700 8,10052............... 36,500 8,30053............... 37,600 8,50054............... 38,500 8,70055............... 39,700 9,00056............... 40,600 9,20057............... 41,800 9,40058............... 43,000 9,70059............... 44,200 9,90060............... 45,500 10,20061............... 46,800 10,40062............... 48,100 10,70063............... 49,500 11,00064............... 50,900 11,30065 orover.. 52,600 11,600

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 39 Federal Methodology
Page 40: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

This page left blank intentionally.

Dakotadtp
Text Box
Federal Methodology 40 Reprinted from The EFC Formula, 2014-15
Page 41: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

2014–2015 EFC FORMULA C : INDEPENDENT STUDENT With Dependent(s) Other than a Spouse

TOTAL INCOME (from line7) TOTAL ALLOWANCES (from line14) −

15. AVAILABLE INCOME (AI) Maybe a negativenumber. =

AVAILABLE INCOME

16. Cash,savings&checking(FAFSA/SAR#41)

17. Networthofinvestments** (FAFSA/SAR#42)Ifnegative,enterzero.

18. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#43) Ifnegative,enterzero.

19. Adjustednetworthofbusiness/farm (CalculateusingTableC4.) + 20. Net worth (sumoflines16,17,and19) = 21. Assetprotectionallowance(TableC5) −

22. Discretionarynetworth(line20minusline21) =

23. Assetconversionrate × .07 24. CONTRIBUTION FROM ASSETS Ifnegative,enterzero.

STUDENT’S/SPOUSE’S CONTRIBUTION FROM ASSETS

REGULAR WORKSHEETPage 1 C

**Donotincludethestudent’shome.***TocalculatetheEFCforlessthannine-monthenrollment,seethe

nextpage.Ifthestudentisenrolledformorethanninemonths,usethenine-monthEFC(line28above).

EXPECTED FAMILY CONTRIBUTION

AVAILABLE INCOME (AI) (fromline15)

CONTRIBUTION FROM ASSETS (fromline24)+

25. Adjusted Available Income (AAI) Maybeanegativenumber.=

26. Total contribution from AAI (CalculateusingTableC6.)Ifnegative,enterzero.

27. Number in college in 2014–2015 (FAFSA/SAR#96) ÷ 28. EXPECTED FAMILY CONTRIBUTION for ninemonthenrollment.Ifnegative,enterzero.***

A8. 2013U.S. income taxpaid (FAFSA/SAR#37)

(taxfilers only) If negative, enter zero.

9. State andother tax allowance (TableC1) If negative, enter zero. +

10. Student’sSocialSecurity tax (TableC2) +

11. Spouse’sSocialSecurity tax (TableC2) +

12. Incomeprotection allowance (TableC3) +13. Employment expense allowance: • Student and spousebothworking: 35%of the lesser of the earned incomes, or $4,000, whichever is less

• One-parent families: 35%of earned income, or $4,000,whichever is less • Student or spouseworking (not both): zero +

14. TOTAL ALLOWANCES =

*STOPHEREifthefollowingaretrue:

Line3is$24,000orlessand

• Thestudent(andthestudent’sspouse,ifany)areeligibletofilea2013IRSForm1040Aor1040EZ(theyarenotrequiredtofilea2013Form1040)ortheyarenotrequiredtofileanyincometaxreturnor•Anyoneincludedinthestudent’shouseholdsize(asdefinedontheFAFSA)receivedbenefitsduring2012or2013fromanyofthedesignatedmeans-testedfederalbenefitprogramsor•Thestudent(orthestudent’sspouse,ifany)isadislocatedworker.

Ifthesecircumstancesaretrue,theExpectedFamilyContributionisautomaticallyzero.

ALLOWANCES AGAINST STUDENT/SPOUSE INCOME

STUDENT/SPOUSE INCOME IN 2013

1. Student’sandspouse’sAdjustedGrossIncome(FAFSA/SAR#36)Ifnegative,enterzero.

2. a. Student’sincomeearnedfromwork (FAFSA/SAR#39) __________

2. b. Spouse’sincomeearnedfromwork (FAFSA/SAR#40) + __________

Totalstudent/spouseincomeearnedfromwork =

3. Student/spouseTaxableIncome(Iftaxfilers,entertheamountfromline1above. Ifnon-taxfilers,entertheamountfromline2.)

4. Totaluntaxedincomeandbenefits(sumtotalofFAFSA/SAR#45a.through45j.) +

5. Taxableanduntaxedincome(sumofline3andline4) =6. Totaladditionalfinancialinformation (sumtotalofFAFSA/SAR#44a.through44f.) − 7. TOTAL INCOME (line5minusline6)Maybeanegativenumber.=

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 41 Federal Methodology
Page 42: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

ExpectedFamilyContribution(standardcontributionfornine-monthenrollment,fromline28)

Divideby9 ÷ 9

ExpectedFamilyContributionpermonth =

Multiplybynumberofmonthsofenrollment ×

Expected Family Contribution for less than nine-month enrollment* =

Note: Use this additional page to prorate the EFC only if the student will be enrolled for other than nine months and only to determine the student’s need for Campus-Based aid, or a Federal Direct Subsidized Loan. Do not use this page to prorate the EFC for a Federal Pell Grant or TEACH Grant. The EFC for the Federal Pell Grant Program is the nine-month EFC used in conjunction with the cost of attendance to determine a Federal Pell Grant award from the Payment or Disbursement Schedule.

*Substitutethestudent’sEFCforlessthannine-monthenrollmentinplaceoftheEFCforthestandardnine-monthenrollment(EFCFormulaCWorksheet,line28).

CREGULAR WORKSHEETPage 2

Calculation of Expected Family Contribution for a Student Enrolled for Less than Nine Months

Dakotadtp
Text Box
Federal Methodology 42 Reprinted from The EFC Formula, 2014-15
Page 43: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

8. 2013U.S. income taxpaid (FAFSA/SAR#37)(taxfilers only) If negative, enter zero.

9. State andother tax allowance (TableC1) If negative, enter zero. +

10. Student’sSocialSecurity tax (TableC2) +

11. Spouse’sSocialSecurity tax (TableC2) +

12. Incomeprotection allowance (TableC3) +13. Employment expense allowance: • Studentandspousebothworking:35%of the lesser of the earned incomes, or $4,000, whichever is less

• One-parent families: 35%of earned income, or $4,000,whichever is less • Student or spouseworking (not both): zero +

14. TOTAL ALLOWANCES =

2014–2015 EFC FORMULA C : INDEPENDENT STUDENT With Dependent(s) Other than a Spouse

STUDENT’S/SPOUSE’S CONTRIBUTION FROM ASSETS

*STOPHEREifthefollowingaretrue:

Line3is$24,000orlessand

• Thestudent(andthestudent’sspouse,ifany)areeligibletofilea2013IRSForm1040Aor1040EZ(theyarenotrequiredtofilea2013Form1040)ortheyarenotrequiredtofileanyincometaxreturnor•Anyoneincludedinthestudent’shouseholdsize(asdefinedontheFAFSA)receivedbenefitsduring2012or2013fromanyofthedesignatedmeans-testedfederalbenefitprogramsor•Thestudent(orthestudent’sspouse,ifany)isadislocatedworker.

Ifthesecircumstancesaretrue,theExpectedFamilyContributionisautomaticallyzero.

ALLOWANCES AGAINST STUDENT/SPOUSE INCOME

Note: Do not complete the shaded areas; asset information is not required in the simplified formula.

**Do not includethestudent’shome.***TocalculatetheEFCforlessthannine-monthenrollment,seethenext

page.Ifthestudentisenrolledformorethanninemonths,usethenine-monthEFC(line28above).

EXPECTED FAMILY CONTRIBUTION

AVAILABLE INCOME (AI) (fromline15)

CONTRIBUTIONS FROM ASSETS (fromline24) +

25. Adjusted available income (AAI) Maybeanegativenumber. =

26. Total contribution from AAI (CalculateusingTableC6.)Ifnegative,enterzero.

27. Number in college in 2014–2015 (FAFSA/SAR#96) ÷ 28. EXPECTED FAMILY CONTRIBUTION for ninemonthenrollment.Ifnegative,enterzero.***

TOTAL INCOME (from line7) TOTAL ALLOWANCES (from line14) −

15. AVAILABLE INCOME (AI) Maybe a negativenumber. =

CSIMPLIFIEDWORKSHEETPage 1

AVAILABLE INCOME

16. Cash,savings&checking(FAFSA/SAR#41)

17. Networthofinvestments** (FAFSA/SAR#42)Ifnegative,enterzero.

18. Networthofbusinessand/orinvestmentfarm (FAFSA/SAR#43) Ifnegative,enterzero.

19. Adjustednetworthofbusiness/farm (CalculateusingTableC4.) + 20. Net worth (sumoflines16,17,and19) = 21. Assetprotectionallowance(TableC5) −

22. Discretionarynetworth(line20minusline21) =

23. Assetconversionrate × .07 24. CONTRIBUTION FROM ASSETS Ifnegative,enterzero.

STUDENT/SPOUSE INCOME IN 2013

1. Student’sandspouse’sAdjustedGrossIncome(FAFSA/SAR#36)Ifnegative,enterzero.

2. a. Student’sincomeearnedfromwork (FAFSA/SAR#39) __________

2. b. Spouse’sincomeearnedfromwork (FAFSA/SAR#40) + __________

Totalstudent/spouseincomeearnedfromwork =

3. Student/spouseTaxableIncome(Iftaxfilers,entertheamountfromline1above. Ifnon-taxfilers,entertheamountfromline2.)

4. Totaluntaxedincomeandbenefits(sumtotalofFAFSA/SAR#45a.through45j.) +

5. Taxableanduntaxedincome(sumofline3andline4) =6. Totaladditionalfinancialinformation (sumtotalofFAFSA/SAR#44a.through44f.) ε.− 7. TOTAL INCOME (line5minusline6)Maybeanegativenumber.=

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 43 Federal Methodology
Page 44: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Note: Use this additional page to prorate the EFC only if the student will be enrolled for other than nine months and only to determine the student’s need for Campus-Based aid, or a Federal Direct Subsidized Loan. Do not use this page to prorate the EFC for a Federal Pell Grant or TEACH Grant. The EFC for the Federal Pell Grant Program is the nine-month EFC used in conjunction with the cost of attendance to determine a Federal Pell Grant award from the Payment or Disbursement Schedule.

*Substitutethestudent’sEFCforlessthannine-monthenrollmentinplaceoftheEFCforthestandardnine-monthenrollment(EFCFormulaCWorksheet,line28).

CSIMPLIFIED WORKSHEETPage 2

Calculation of Expected Family Contribution for a Student Enrolled for Less than Nine MonthsExpectedFamilyContribution(standardcontributionfornine-monthenrollment,fromline28)

Divideby9 ÷ 9

ExpectedFamilyContributionpermonth =

Multiplybynumberofmonthsenrollment ×

Expected Family Contribution for less than nine-month enrollment* =

Dakotadtp
Text Box
Federal Methodology 44 Reprinted from The EFC Formula, 2014-15
Page 45: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

STATE PERCENTOFTOTALINCOME $0–$14,999$15,000 ormore

STATE PERCENTOFTOTALINCOME $0–$14,999$15,000 ormore

Table C1: State and Other Tax Allowance

Multiplythetotalincomeofstudentandspouse(EFCFormulaCWorksheet,line7)bytheappropriateratefromthetableabovetogetthe“stateandothertaxallowance”(EFCFormulaCWorksheet,line9).Usethestudent’sStateofLegalResidence(FAFSA/SAR#18)reportedontheFAFSA.Ifthisitemisblankorinvalid,usetheStateintheStudent’sMailingAddress(FAFSA/SAR#6).Ifbothitemsareblankorinvalid,usetherateforblankorinvalidstateabove.

Alabama........................ 3%.................... 2%Alaska........................... 2%.................... 1%AmericanSamoa........... 2%.................... 1%Arizona......................... 4%.................... 3%Arkansas....................... 4%.................... 3%California...................... 8%.................... 7%CanadaandCanadianProvinces................. 2%.................... 1%Colorado....................... 4%.................... 3%Connecticut................... 8%.................... 7%Delaware....................... 5%.................... 4%DistrictofColumbia..... 7%.................... 6%FederatedStates ofMicronesia........... 2%.................... 1%Florida........................... 3%.................... 2%Georgia.......................... 5%.................... 4%Guam............................. 2%.................... 1%Hawaii........................... 4%.................... 3%Idaho............................. 5%.................... 4%Illinois........................... 5%.................... 4%Indiana.......................... 4%.................... 3%Iowa.............................. 5%.................... 4%Kansas........................... 5%.................... 4%Kentucky....................... 5%.................... 4%Louisiana....................... 3%.................... 2%Maine............................ 6%.................... 5%MarshallIslands............ 2%.................... 1%Maryland....................... 8%.................... 7%Massachusetts............... 7%.................... 6%Mexico.......................... 2%.................... 1%Michigan....................... 5%.................... 4%Minnesota..................... 6%.................... 5%Mississippi.................... 3%.................... 2%

Missouri........................ 5%.................... 4%Montana........................ 5%.................... 4%Nebraska....................... 5%.................... 4%Nevada.......................... 3%.................... 2%NewHampshire............ 5%.................... 4%NewJersey.................... 9%.................... 8%NewMexico.................. 3%.................... 2%NewYork...................... 9%.................... 8%NorthCarolina.............. 6%.................... 5%NorthDakota................ 2%.................... 1%NorthernMariana Islands...................... 2%.................... 1%Ohio.............................. 5%.................... 4%Oklahoma...................... 3%.................... 2%Oregon.......................... 7%.................... 6%Palau............................. 2%.................... 1%Pennsylvania................. 5%.................... 4%PuertoRico................... 2%.................... 1%RhodeIsland................. 7%.................... 6%SouthCarolina.............. 5%.................... 4%SouthDakota................ 2%.................... 1%Tennessee...................... 2%.................... 1%Texas............................. 3%.................... 2%Utah............................... 5%.................... 4%Vermont......................... 6%.................... 5%VirginIslands................ 2%.................... 1%Virginia......................... 6%.................... 5%Washington................... 4%.................... 3%WestVirginia................ 3%.................... 2%Wisconsin...................... 7%.................... 6%Wyoming....................... 2%.................. ..1%BlankorInvalid State......................... 2%.................... 1%OTHER......................... 2%.................... 1%

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 45 Federal Methodology
Page 46: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Table C2: Social Security TaxCalculateseparatelytheSocialSecuritytaxofstudentandspouse.

Income Earned from Work* Social Security Tax

$0– $113,700 7.65%ofincome

$113,701orgreater $8,698.05+1.45%ofamountover$113,700

*Student’s2013incomeearnedfromworkisFAFSA/SAR#39.Spouse’s2013incomeearnedfromworkisFAFSA/SAR#40.SocialSecuritytaxwillneverbelessthanzero.

Table C3: Income Protection AllowanceNumberinstudent’shousehold,including

student(FAFSA/SAR#95)

Numberofcollegestudentsinhousehold(FAFSA/SAR#96)

Note: Foreachadditionalfamilymember,add$5,900. Foreachadditionalcollegestudent,subtract$4,190.

Table C4: Business/Farm Net Worth Adjustment

5 1 2 3 42.......... $24,650$20,430 ——— ——— ——— 3.......... 30,69026,490 $22,280 ——— ———

4.......... 37,89033,690 29,500$25,270 ——— 5.......... 44,71040,490 36,30032,090 $27,9006.......... 52,29048,080 43,90039,67035,480

If the net worth of a Then the adjusted business or farm is— net worth is—

Lessthan$1 $0

$1to$125,000 40%ofnetworthofbusiness/farm

$125,001to$375,000 $50,000 + 50% ofnetworthover$125,000

$375,001to$620,000 $175,000 + 60% ofnetworthover$375,000

$620,001ormore $322,000 + 100% ofnetworthover$620,000

Dakotadtp
Text Box
Federal Methodology 46 Reprinted from The EFC Formula, 2014-15
Page 47: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Table C6: Student’s Contribution from AAI

If student’s AAI is— The student’s contribution from AAI is—

Lessthan-$3,409 -$750

-$3,409to $15,600 22%ofAAI

$15,601 to $19,600 $3,432 + 25%ofAAIover $15,600

$19,601 to $23,500 $4,432 + 29%ofAAIover $19,600$23,501 to $27,500 $5,563 + 34%ofAAIover $23,500

$27,501 to $31,500 $6,923 + 40%ofAAIover $27,500

$31,501ormore $8,523 + 47%ofAAIover $31,500

Age of student as of

12/31/2014*

AllowanceforMarriedStudent

AllowanceforUnmarriedStudent

Table C5: Asset Protection Allowance

*Determinethestudent’sageasof12/31/2014fromthestudent’sdateofbirth(FAFSA/SAR#9)

Age of student as of

12/31/2014*

AllowanceforMarriedStudent

AllowanceforUnmarriedStudent

25orless $0$026............... 1,800 40027............... 3,600 80028............... 5,500 1,30029............... 7,300 1,70030............... 9,100 2,10031............... 10,900 2,50032............... 12,700 2,90033............... 14,600 3,40034............... 16,400 3,80035............... 18,200 4,20036............... 20,000 4,60037............... 21,800 5,00038............... 23,700 5,50039............... 25,500 5,90040............... 27,300 6,30041............... 27,900 6,50042............... 28,500 6,60043............... 29,200 6,80044............... 30,000 6,900

45............... $30,700 $7,10046............... 31,500 7,20047............... 32,200 7,40048............... 33,000 7,60049............... 33,800 7,80050............... 34,600 8,00051............... 35,700 8,10052............... 36,500 8,30053............... 37,600 8,50054............... 38,500 8,70055............... 39,700 9,00056............... 40,600 9,20057............... 41,800 9,40058............... 43,000 9,70059............... 44,200 9,90060............... 45,500 10,20061............... 46,800 10,40062............... 48,100 10,70063............... 49,500 11,00064............... 50,900 11,30065orover.. 52,600 11,600

Dakotadtp
Text Box
Reprinted from The EFC Formula, 2014-15 47 Federal Methodology
Page 48: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

This page left blank intentionally.

Dakotadtp
Text Box
Federal Methodology 48 Reprinted from The EFC Formula, 2014-15
Page 49: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

© 2014 NASFAA 49 Federal Methodology

Exercise 1: Janet Simpson (Dependent) Janet will be a second-year, undergraduate student Fall 2014. Her date of birth is June 25, 1995. She lives in Syracuse, New York with her mother, stepfather, and younger stepbrother, Michael, who is a high school junior. Janet’s mother, Ann, and stepfather, David, have been married 10 years. David is an Air Force reservist who was called for active duty November 2013. Ann’s date of birth is June 3, 1968. David’s date of birth is August 1, 1967. Janet’s mother and stepfather filed an IRS Form 1040 for the 2013 tax year. Ann owns and operates a small coffee shop with five full-time employees. In 2013, she earned $23,500 in business income (as reported on Schedule C of the 1040). David works as an electrician and earned $53,000 in 2013. They reported an adjusted gross income (AGI) of $74,386, a $2,500 American Opportunity tax credit, an $800 taxable Combat Pay, and a tax liability of $6,829. Ann and David claimed Janet and her stepbrother as exemptions. David contributed $2,500 to an IRA tax-deferred pension plan. No one in the family received benefits from a means tested federal program in 2012 or 2013. On Janet’s FAFSA, Ann reported the value of her coffee shop as $500,000 with debt of $436,000, $12,848 in a joint savings account, $1,563 in her checking account, and $2,367 in David’s checking account. Janet’s parents divorced in 1997. Per the terms of the divorce, Janet’s father paid Ann $600 a month in child support for Janet until she turned 18. Ann received six months’ worth on child support in 2013, in the amount of $3,600. Janet earned $2,340 in 2013 working part time over the summer. She will not file a tax return for 2013. She used the money in her savings account to pay her tuition for the 2013–14 academic year and has no assets.

Page 50: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology 50 © 2014 NASFAA

This page intentionally left blank.

Page 51: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

© 2014 NASFAA 51 Federal Methodology

Additional Approaches to Calculate the Expected Family Contribution for

Summer Periods of Enrollment To avoid double counting the student contribution when summer is packaged separately from the regular academic year, there are two other approaches schools may use as standard packaging policies for both dependent and independent students. First Approach: If summer is not considered part of the upcoming award year, the school calculates the EFC for the

summer enrollment by subtracting the 9-month EFC from the alternate EFC that corresponds to the total number of months the student will be enrolled during the award year.

If summer is considered part of the upcoming award year, the school uses the appropriate alternate

EFC to package the summer. Later, when packaging the student for the regular academic year, the school calculates the EFC for that enrollment period by subtracting the alternate EFC used for the summer from the alternate EFC that corresponds to the total number of months the student will be enrolled during the award year.

Example: Student attends 9-month regular academic year and plans to enroll in 2-month summer term.

If summer is considered part of prior award year, the school subtracts the 9-month EFC from the alternate 11-month EFC, and uses the resulting 2-month EFC to package the student with summer campus-based and Direct Loan awards.

If summer is considered part of the upcoming award year, the school uses 2-month alternate EFC

to package for summer. Later, the school calculates the student’s EFC for the regular academic year by subtracting the 2-month EFC used for the summer from the alternate EFC that corresponds to the total number of months the student will be enrolled during the award year.

Second Approach: If the school knows the student’s summer enrollment plans before packaging the student for the regular academic year (regardless of whether summer is the first or the last term of the award year): 1. Calculate a monthly share of the EFC by dividing the alternate EFC corresponding to the total

number of months the student will be enrolled during the award year by the number of months of enrollment; and

2. Multiply the monthly share by the number of months in the summer to obtain the summer EFC, and

by the number of months in the regular academic year to calculate the academic year EFC.

Page 52: Federal Methodology: Hand Calculation of EFC Training … · Federal Methodology: Hand Calculation of EFC © 2014 NASFAA 1 Federal Methodology Training Track ... Regular Formula EFC

Federal Methodology 52 © 2014 NASFAA

This page intentionally left blank.