The EFC (Expected Family Contribution) provides an estimate how much the student’s family is expected to contribute for the year. The EFC helps gain insight into the student’s financial aid eligibility.
The financial aid system works only to bridge the gap of what your family is unable to contribute in your college education. The Expected Family Contribution (EFC) is a measure of your family’s financial strength and is calculated according to a formula established by law.
Your family’s taxed and untaxed income, assets, and benefits (such as unemployment or Social Security) are all considered in the formula. Also considered are your family size and the number of family members who will attend college during the year.
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Your eligibility depends on your Expected Family Contribution, your year in school, your enrollment status, and the cost of attendance at the school you will be attending.
The financial aid office at your college or career school will determine how much financial aid you are eligible to receive.
- The financial aid staff starts by deciding upon your cost of attendance (COA) at that school.
- They then consider your Expected Family Contribution (EFC).
- They subtract your EFC from your COA to determine the amount of your financial need and therefore how much need-based aid you can get.
- To determine how much non-need-based aid you can get, the school takes your cost of attendance and subtracts any financial aid you’ve already been awarded.
Your EFC is not the amount of money your family will have to pay for college nor is it the amount of federal student aid you will receive. It is a number used by your school to calculate the amount of federal student aid you are eligible to receive.
The EFC is your key to the amount of financial aid you receive. Your EFC is an index number that college financial aid staff use to determine how much financial aid you would receive if you were to attend their school.
The information you report on your FAFSA is used to calculate your EFC. The EFC is calculated according to a formula established by law.
Your family’s taxed and untaxed income, assets, and benefits (such as unemployment or Social Security) all could be considered in the formula. Also considered are your family size and the number of family members who will attend college or career school during the year.
The EFC Formula guide shows exactly how an EFC is calculated. The Expected Family Contribution is a measure of your family’s financial strength and is calculated according to a formula established by law.
The information you report on your Free Application for Federal Student Aid (FAFSA) or your FAFSA4caster is used to calculate your EFC. Schools use the EFC to determine your federal student aid eligibility and financial aid award.
About the EFC
- What is the EFC? The EFC is a measure of how much you and your family will be able to contribute toward your educational expenses for one academic year.
- How is the EFC calculated? The Department of Education will calculate your EFC based on financial information you provide on the Free Application for Federal Student Aid (FAFSA).
- Why is the EFC important? Your school will use your EFC to determine your financial need, then put together a package of financial aid designed to help you meet your need.
You can use an online FAFSA EFC calculator to provide you an estimate of what you and your family is expected to contribute to your educational expenses for one academic year of your postsecondary education.
Your official EFC is calculated by the Department of Education when you complete a FAFSA.
Your college or career school first determines whether you have financial need by using this simple formula:
Calculating Your Financial Need
Cost of Attendance (COA)
– Expected Family Contribution (EFC)
= Financial Need
Need-based aid is financial aid that you can receive if you have financial need and meet other eligibility criteria. You can’t receive more need-based aid than the amount of your financial need.
For instance, if your COA is $16,000 and your EFC is 12000, your financial need is $4,000; so you aren’t eligible for more than $4,000 in need-based aid.
The following are the need-based federal student aid programs:
- Federal Pell Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Direct Subsidized Loan
- Federal Perkins Loan
- Federal Work-Study
Know more about the how aid is calculated here https://studentaid.ed.gov/sa/fafsa/next-steps/how-calculated
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