+1 to this. We had a similar experience with DD who just started last week and with DS who is in the application phase now.
If you have substantial assets (and most all here who are RE do), it's a near total waste of time.
Maybe a waste of time, but it really doesn't take too much time to figure out if you're in the ballpark or not.
If the kid has assets, 25% of those go to the EFC, so any smooth-move to shift income to your kids' lower tax rate kills you on the FAFSA. Your kids income....I think half of that goes to the EFC or something. My kids didn't make much, so it wasn't a big factor.
To get the EFC for the parents, you calculate "total available" from both income and assets. So their formula decides how much of your assets and income is available to spend on your kid.
You get
total available income by starting with your income less federal taxes paid, less SS paid, less state-specific tax offset (smallish number based on how much tax they think you paid to your state), less "income protection allowance" (which is only $25K IIRC). So that's the first total. Hang on to that as your first total.
Then you get
total available from assets by taking 12% of your assets (cash, savings, investments, rental property
, but not your current home equity in FAFSA), less "asset protection allowance" (which is only $50K or $60K IIRC). BTW, the available from assets calculation does not include retirement assets (IRA, 401k, retirement annuities, cash value of life insurance, etc). Hang on to that second total.
You add the two totals:
available from income and
total available from assets to get total available (TA). They expect you to spend 27% of that total below a cut-off, and 47% of the amount exceeding the cutoff. The cut-off was $29K a few years back. So for instance 0.27*29K + 0.47*(TA-29K).
Those are old percentages/values I pulled from a spreadsheet of mine. I don't imagine they've changed too much, but it will certainly show you, in like 5 minutes, roughly what they'd expect you to spend for college, per year.
I imagine there are people who are not earning much (FIREd), they have a goodly fraction of their assets in IRA's, 401k's, VA's, or other retirement assets that are ignored by the formulas, and didn't UGMA their kids. Well, I'm not sure how many fit that bill, but I know it's not zero.