Author: Paul Martin

Student Borrowing Calculator | The 8% Rule

by Paul Martinin Loans and borrowing

In order to successfully manage student debt after you graduate college, you should only borrow an amount that will result, at most, in a loan payment of 8% of your monthly income or salary.

This tool allows you to explore a reasonable borrowing about given potential future salaries by either 1) major or 2) career. Here is how to use it.

To explore by major, go to www.payscale.com/college-salary-report/majors-that-pay-you-back/bachelors and search for the majors you are considering. Then enter the major in “Enter your major or career” box, and salary from the “Early Career Pay” column in “Enter future salary”.

To explore by career, go to www.payscale.com/research/US/Job and search for careers you are considering. Then enter the career in “Enter your major or career” box, and “1-4 Years salary” amount from the “What is the Pay by Experience Level” section in “Enter future salary”.

Then you can create a sample budget and see the powerful magic of compound interest for your savings.

How to report parent investments on FAFSA & CSS Profile

by Paul Martinin Need-based Financial Aid

FAFSA and CSS Profile have different rules on what needs to be reported in the investment lines of their applications. Use this calculator to get the correct total to report for each application.

NOTE: The new 2024-25 FAFSA rules for reporting 529 Plans require you to only report 529 Plan amounts for the student applicant. You should no longer include 529 Plans amounts for other members of the family.

For all amounts, report balances or values on the date of filing.

2023-24 FAFSA EFC Estimator

by Paul Martinin Need-based Financial Aid

The FAFSA EFC Estimator gives you an estimate of your Expected Family Contribution (EFC) for colleges that use the Free Application for Federal Student Aid (FAFSA) to award need-based financial aid for the 2023-24 school year. This interactive tool is for a dependent student eligible to submit the FAFSA.

I created the FAFSA EFC Estimator so that in 3 steps you can understand if you may qualify for need-based financial aid. The easy-to-use inputs also allow you to run scenarios for changes in income or assets. Importantly, it will help you see how each area of your finances – income versus assets – impacts your EFC.

For a more detailed FAFSA EFC, or to calculate the EFC as determined by the CSS Profile, you can use College Board’s EFC Calculator.

*If Parent Taxed Income or AGI is less than $50,000, the EFC Estimator assumes the student qualifies for the Simplified Needs Test, which would exclude any assets you report on the FAFSA from the EFC calculation. To qualify for the Simplified Needs Test, you must meet additional criteria beyond an income below $50,000. You can review those criteria here.