Understanding the EFC

Will the Expected Family Contribution Affect Your Student’s College Choice?


Those families which have managed to complete the Free Application for Federal Student Aid (FAFSA) may already be receiving their Student Aid Report. This is a document which summarizes the information provided in the FAFSA and lists out the Expected Family Contribution, or EFC. At first glance, many parents’ reactions might be, “What! We have to pay how much?” For some families it can be a bit of a shock, but keep in mind that this is not necessarily the amount your family will have to pay.

Here are some important facts you need to know about the Expected Family Contribution:

  • What is the EFC? There is a formula set by Congress which is used to calculate the EFC. This formula looks at reported items such as income, assets, benefits, family size, and number of family members in college to come up with a rough estimate of how much they think your family should be able to contribute to the cost of your student’s education. This is an estimate of the maximum amount of money you might have to pay out-of-pocket but it is not necessarily the amount you will definitely have to pay. That is based on a bevy of other factors.
  • What do colleges do with EFC? The colleges first look at their estimated Cost of Attendance, or COA. This is the dollar figure they believe it costs students to attend their college. Your EFC is subtracted from that to determine your financial need.
  • What is the difference between need-based and 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 Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Direct Subsidized Student Loans, Federal Perkins Loan and the Federal Work-Study 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 Loan, and the Teacher Education Access for College and Higher Education (TEACH) Grant.
  • Are there other types of aid? Yes. Colleges may also be able to grant merit-based aid or athletic scholarships for your student based on his or her high school accomplishments. You may also be able to search for private scholarships on your own.
  • How does the COA affect our financial aid? This goes back to the relationship between Cost of Attendance and EFC. If the COA of 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 quite 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 our 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 your student’s freshman year. This might in turn reduce your EFC for the sophomore year.

Schools can be known to lean more towards need-based or merit-based admissions. Knowing your EFC might help narrow down your selection choice to those you can afford.