The Massachusetts Educational Financing Authority (MEFA) provides resources and information on financing college education through various financial aid sources, including grants, scholarships, loans, and work-study programs. Families’ financial aid eligibility is determined by the Expected Family Contribution (EFC), which accounts for income and assets, with a focus on income being the primary factor. MEFA also offers savings options such as the 529 U.Fund College Investing Plan and the U.Plan prepaid tuition program to help families save for college costs.

1. 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

2. 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

3. 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. Loans
3. Work-study

4. 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

5. The Financial Aid Formula
5
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=

6. 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)
Expected Family Contribution (EFC)
= Financial Aid Eligibility/Financial Need
The Financial Aid Formula
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-
Visit mefa.org to learn more about the financial aid
process.

7. Your EFC will be based on:
1. An analysis of your annual adjusted gross income, which counts for about 22% - 47% in the EFC
formula
2. 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 EFC
4. 20% of the student’s assets is included in the EFC.
Cost of Attendance (COA)
Expected Family Contribution (EFC)
= Financial Aid Eligibility/Financial Need
The Financial Aid Formula
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-

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$$ $ $+ + + = $
EFCParental assetsParental income
0% to 47% of
adjusted gross
income minus
all taxes and
allowances
Student income
50% over
$6,400
Student assets
20% of all
assets
3% to 5.6% of
nonretirement
assets
• 529 College
Savings Plans
• Brokerage and/or
mutual funds
• Savings and
checking accounts
• Prepaid Tuition
Programs
• UGMA/UTMA
accounts
• Other savings
Your EFC:

9. The Financial Aid Formula
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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.

10. 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

11. “Saving for college means
no financial aid.”
Prevailing myths about saving for college…

12. A family’s college savings account only
minimally impacts the student’s
eligibility for financial aid.
We want families to know the truth:

13. 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

14. “It’s not worth saving for
college if I can’t save
the entire cost.”
Prevailing myths about saving for college…

15. We want families to know the truth:
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

17. “Times are tough. I can’t
save at all.”
Prevailing myths about saving for college…

18. Watch this short video to learn how real
families are managing to put a small
amount aside for college
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We want families to know the truth:

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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

20. 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

22. 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