Make College a Reality

Your Massachusetts Educational Financing Authority. The one Authority you can trust to be on your side when it comes to paying for college.

Make College a Reality

Colleges have a range of costs

SOURCE: The College Board, Trends in College Pricing 2014

Average Estimated Full-Time Cost for Different College Types in 2014-15

There are many sources of Undergraduate Student Aid. In 2013-14, over $184 billion was distributed to students in many different forms:

SOURCE: The College Board, Trends in Student Aid 2014

3 Types of Financial Aid:1. Grants &

scholarships

2. Loans3. Work-study

Paying for College – The Basics

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• Parents and students have the primary responsibility for financing college costs

• A family’s ability to pay is evaluated on one standard financial aid formula:

Cost of Attendance (COA) _ Expected Family Contribution (EFC)

= Financial Aid Eligibility/Financial Need

The Financial Aid Formula

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Cost of Attendance (COA) is the total cost of attending college, including living expenses.

-Cost of Attendance (COA)

Expected Family Contribution (EFC)

Financial Aid Eligibility/Financial Need=

The EFC is the calculated amount of what your family has the ability to pay over time for one year of college costs.

The EFC estimates how much you can contribute, but makes no particular assumptions about how you will finance that

contribution.

The EFC is not necessarily what your family WILL pay for college costs.

Cost of Attendance (COA)




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Visit mefa.org to learn more about the financial aid process.

http://www.mefa.org/

Your EFC will be based on: 1. An analysis of your annual adjusted gross income, which counts for about 22% - 47%

in the EFC formula2. Your assets, which colleges define as savings and investments including 529 plans

and other real estate.a. Your assets figure at about 3% - 5.6% of the EFC. Note that a much higher percentage of your

income, rather than your assets, will be considered available to pay for college. Also consider that a 529 plan account is considered to be an asset of the owner (usually the parent) and not the student.

3. 50% of the student’s earned income over $6,400 is included in the EFC4. 20% of the student’s assets is included in the EFC.

Cost of Attendance (COA)




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$$ $ $+ + + = $

EFCParental assetsParental income

0% to 47% ofadjusted grossincome minusall taxes andallowances

Student income

50% over $6,400

Student assets

20% of all assets

3% to 5.6% of nonretirementassets• 529 College

Savings Plans• Brokerage and/or

mutual funds• Savings and

checking accounts• Prepaid Tuition

Programs

• UGMA/UTMAaccounts

• Other savings

Your EFC:


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Financial Need is the difference between the cost of the school and your EFC.

The more need, the more eligibility for aid. Less need means less financial aid eligibility.

Cost of Attendance (COA) Expected Family Contribution (EFC)

Financial Need/Financial Aid Eligibility-

Visit mefa.org to learn more about the financial aid process.

http://www.mefa.org/

Net Price Calculators provide a personal net price at each college

(Learn more about Net Price here)

College Navigator (Department of Education): College search tool with college-specific admissions, academic, & cost information

CollegeNavigator.gov

College Scorecard (White House)College search tool that shares a college’s average net price, loan default rates, and median loan debt

CollegeCost.ed.gov/Scorecard

FREE resources available to families

http://www.mefa.org/using-net-price-calculators/

“Saving for college means no financial

aid.”

Prevailing myths about saving for college…

A family’s college savings account only minimally impacts

the student’s eligibility for financial aid.

We want families to know the truth:

Three different families, with different asset totals

Concerned that savings will impact financial aid?

This example is an estimate only. Based on 2016-17 Federal Methodology (one child in college).

Assets have minimal impact on the EFC, as it is primarily an income-driven formula

Having saved for college or having other assets that you can use to help pay for college is a good thing. It gives you options for paying the balance due.

Family A Family B Family C

Combined Parent Income $75,000 $75,000 $75,000

Combined Parent Assets $0 $75,000 $150,000

EFC $7,819 $10,208 $14,438

Difference $2,389 $6,619

“It’s not worth saving for college if I can’t

save the entire cost.”



Any amount saved, small or large, will be a help when the time comes to pay the college bill.

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Families decide the best plan to meet the college balance due based on their own personal finances.

In this example, the cost to finance a $10,000 college cost using savings only required a $6,960 investment.

The cost to finance the $10,000 cost with borrowing (college loans) ultimately cost $13,920.

*Based on 10 years at an interest rate of 7%. This example is an estimate only and market conditions may change.

Saving vs. Borrowing

“Times are tough. I can’t save at all.”


Watch this short video to learn how real families are managing to

put a small amount aside for college

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http://www.mefa.org/videos/save-for-tomorrow-starting-today/

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Strategies for Saving• Start saving as early as

possible. Use time to your advantage

• Use automatic transfers

• Get the word out and let your family and friends know that they may contribute or open a plan up on behalf of your child

• Involve your child in the process. There are great savings tools for kids online

Time in months

MEFA’s Savings Options

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MEFA 529 U.Fund College Investing Plan

How it works:• Save for qualified higher education expenses such as

tuition, fees, room, board, books, supplies, and equipment• Savings can be used at any accredited college or university nationwide • Minimum Initial Investment - $50 lump sum or $15/ monthly automatic

investments• Combined Account Maximum - $375,000• No Annual Account Maintenance Fee• Multiple investment options (active management; indexed portfolio;

individual allocation portfolios)• FDIC-insured option

Enroll online at fidelity.com/ufund or by calling 800.544.2776

Established in 1999

http://www.fidelity.com/ufund

http://www.fidelity.com/ufund

How it works:• Allows you to prepay up to 100% of tuition & fees at

80 MA public and private colleges & universities• By purchasing Tuition Certificates now, you lock in today’s

tuition and mandatory fee rates• U.Plan Tuition Certificates:

• Represent interest in Commonwealth General Obligation Bonds• Are backed by the full faith and credit of the Commonwealth of

Massachusetts• Are not subject to market fluctuation• Require $300 minimum to get started

• Annual enrollment period: May 1st to June 30th each year

More information can be found at mefa.org/uplan

The U.Plan Prepaid Tuition Program

http://www.mefa.org/uplan

http://www.mefa.org/uplan