Understanding the EFC

The Expected Family Contribution Can Determine Financial Aid Eligibility

Coins holding up one side of a cup pyramid
•••

Andy Roberts/Getty Images 

Families that have already submitted the Free Application for Federal Student Aid (FAFSA) may already be receiving their Student Aid Report, which includes the Expected Family Contribution (EFC). At first glance, many parents’ reactions might be, “What! We have to pay how much?” Before reacting, however, it's important for families to take the time to understand the facts about the Expected Family Contribution.

EFC Overview

The EFC is an assessment of a family's financial strength, and it determines a student's eligibility for certain types of financial aid. It's not necessarily the amount a family will have to pay for college.

Your EFC is calculated using a formula set by Congress using the financial information you give on your FASFA application. That includes income, assets, benefits, family size, and the number of family members in college. ​

To help determine your financial need, colleges subtract your EFC from their estimated Cost of Attendance (COA), or the dollar figure they believe it costs students to attend their college.

Need-Based Aid vs. Non-Need-Based Aid

You can receive need-based financial aid if your family meets certain eligibility criteria, but that amount cannot exceed your financial need. This relates to your eligibility for federal student aid programs such as Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), subsidized loans through the William D. Ford Federal Direct Loan Program, Federal Perkins Loans, and the Federal Work-Study (FWS) program.

Non-need-based financial aid is not based on your EFC. This relates to your eligibility for federal student aid programs such as Federal Direct Unsubsidized Student Loans, Federal PLUS Loans, and the Teacher Education Assistance for College and Higher Education (TEACH) Grant.

Colleges may also be able to grant merit-based financial aid or athletic scholarships for students based on their high school accomplishments. You can also be able to search for private scholarships on your own.

How COA Affects Financial Aid

If the Cost of Attendance for a selected college is low and your EFC is high, you might not be eligible for any need-based financial aid. On the other hand, if the COA at a particular college is high and your EFC is low you might be eligible for substantial financial aid. Some families have an EFC of zero, which may qualify them for the maximum amount of assistance, but even some higher-income families find that they qualify for some forms of financial aid, depending on the specific university.

Can Your EFC Change From Year to Year?

Yes. Your family will be required to complete a FAFSA every year your student is in college and requesting financial assistance. Perhaps you reduced your savings accounts to cover college costs for the student’s freshman year. This might, in turn, reduce your EFC for the sophomore year.

Financially Independent Students

The EFC calculation for an independent student doesn't take take into account parental financial information like the EFC calculation for a dependent student does. Because of that, a student's dependency status must be determined before the EFC is calculated.

A student must meet one or more of several qualifying requirements for independent status laid out by the federal government. They include, but are not limited to, these criteria:

  • Being born before a certain date (which usually makes you 24 or older)
  • Being married or separated but not divorced
  • Working on a graduate program at the beginning of the school year
  • Serving on active duty in or being a veteran of the U.S. Armed Forces
  • Having emancipated minor status

EFCs for independent students will be based their own assets and financial information.