For those of you who are not familiar with Federal Aid, EFC stands for Estimated Family Contribution. This is the magic number that the Free Application For Federal Student Aid(FAFSA) generates in response to the numbers that you plug in. It asks for things like your parents’ salaries, whether they own land or if they have filed for bankruptcy in the previous year.
The FAFSA is what determines whether the government will be helping you pay for college. Some people qualify for grants (free money). Most of the time, students are automatically qualified for federal loans. Some of these loans accrue interest during your time at college(unsubsidized loans), while others do not (subsidized loans). Both of which you are required to pay back after leaving college.
EFC calculation is a problem that many middle-class college students face. Middle-class families are constantly on the cusp of the Federal Aid mountain. The household income for middle-class families usually exceeds the magic number that qualifies students for federal aid. The government sees them as not needing extra help, but how much can they actually contribute to their children’s college fund?
Let’s base our example on the typical “American dream” family in 2013. The Gomez family has a household income of $80 thousand per year. They are comfortably within the middle class boundary. The Gomez’ have two children who are two years apart. Both students work a part-time job ($10,000). The older one plans on attending an in-state public college, then transferring to an in-state university for the last two years of college ($21,000/year for the university). The younger child decides to go straight into the workforce.
The cost for an older student to attend college may be around $17,000. This does include both parent and student contribution. However, the FAFSA does not take the water bill, electric bill, mortgage or car payment into consideration. The FAFSA does not look at your grocery bills. It does not look at expenditures that affect the family’s life. Is it realistic that this family would be able to shell out $17,000 a year for their child to attend college?
Who has to foot the bill? Typically, the college student, who is learning to survive, is also stuck with mounds of debt. This debt is typically in the form of a ten-year repayment plan. If the loan is around $25,000, the payment of $280 a month will end just in time for the student to have children and start the cycle over again. If the student is hard-working and lucky enough to land a decent job, he/she just might avoid drowning in the vicious cycle.
I think that a reform of student aid should be looked into. The middle-class student is suffering. If most careers (excluding manual labor) require a bachelor’s degree, it should be made easier for the student to acquire one without landing a small house worth of debt.