Understanding the Expected Family Contribution

The Expected Family Contribution Can Determine Financial Aid Eligibility

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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 have displeased reactions. However, before reacting, families need to take the time to understand the facts about EFC.

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, including 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).

Beginning in July 2023, FAFSA applications will phase out the EFC and replace it with a simplified Student Aid Index (SAI) that takes effect for the 2023-24 financial aid award year. The SAI uses a slightly different calculation method from the EFC, but is essentially a name change to reflect a student's eligibility, not how much a family is willing to contribute to their child's education.

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, and the Federal Work-Study (FWS) program.

Non-need-based financial aid is not based on your EFC and 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 COA 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.

Changes in Expected Family Contribution

Your family will be required to complete a FAFSA every year a student is in college and requesting financial assistance, so your EFC can change. 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. Or, you may have gotten a raise that increased your EFC.

Financially Independent Students

The EFC calculation for an independent student doesn't take into account parental financial information like the EFC calculation for a dependent student does, so 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, being born before a certain date (usually 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, or having emancipated minor status. EFCs for independent students are based on their own assets and financial information.

Article Sources

  1. U.S. Department of Education, Federal Student Aid. "Wondering How the Amount of Your Federal Aid Is Determined?" Accessed Feb. 19, 2021.

  2. National Association of Student Financial Aid Administrators (NASFAA). "Q&A on Changes to Federal Student Aid Policy Included in Consolidated Appropriations Act, 2021." Accessed Feb. 19, 2021.

  3. U.S. Department of Education, Federal Student Aid. "Wondering How the Amount of Your Federal Student Aid is Determined?" Accessed Feb. 19, 2021.

  4. U.S. Department of Education, Federal Student Aid. "For the Purposes of Applying for Federal Student Aid, What's the Difference Between a Dependent Student and Independent Student?" Accessed Feb. 19, 2021.