How the FAFSA Expected Family Contribution Affects Eligibility for Financial Aid

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Completing the Free Application for Federal Student Aid (FAFSA) is an essential first step in preparing for college and paying for your education. The FAFSA takes many factors into account, including your income and your family's income, family size, and how many siblings you have in college. From this information, the FAFSA estimates your Expected Family Contribution (EFC), which is the amount the federal government expects you and your family to pay toward your education.

What Is the Expected Family Contribution (EFC)? 

When you complete the FAFSA, the Federal Student Aid Office sends you a Student Aid Report (SAR) with basic info about your application, including your EFC. The EFC is determined by a formula designed by Congress, and is an estimate of how much you and your family are able to contribute toward your education expenses, based on information from the FAFSA. It is the maximum expected contribution, not necessarily what you actually must or will pay.

Colleges use the EFC to determine students’ need for aid. Your EFC amount is subtracted from your cost of attendance, which includes tuition, room and board, and other necessary expenses. Any costs not covered by your EFC may increase your eligibility for need-based aid.

EFC's Role in Financial Aid 

Depending on the ratio between your school's cost of attendance and your EFC, you may be eligible for federal need-based aid. Federal Pell Grants, which you do not pay back, and subsidized student loans are common types of need-based federal aid. The federal government pays the interest on subsidized student loans under certain conditions, including when you’re in school at least half-time.

Your EFC is also commonly used by state or local student aid programs, or colleges themselves, to determine eligibility for need-based aid they offer. As a result, filing a FAFSA may be a requirement to be eligible for these types of aid.

If your EFC is high, you may not qualify for need-based aid, but you still could receive other forms of loans, like unsubsidized loans.

Colleges may also grant athletic or academic scholarships that are based on your skills and accomplishments. These types of merit-based aid do not typically take your EFC or financial need into account.

While many people think they make too much money for aid, it's still important to complete the FAFSA. Many families with higher incomes may qualify for some form of financial assistance.

Changes to Family Finances 

The EFC can change drastically from year to year. For example, if your family experiences financial hardship, such as a job loss, or if a sibling enters college while you're in school, your EFC may go down. If your family's financial situation improves, your EFC may go up, too.

Your EFC is based on financial information in the tax return from two years prior to the start of the school year for which you're requesting aid. The 2020-21 FAFSA, for example, uses tax information from 2018, while the 2021-22 FAFSA uses tax information from 2019.

Because your financial situation can vary, you need to renew your FAFSA (and get a new SAR and EFC) for each year you plan to attend school.

Can You Lower Your EFC? 

Many people may think that they can change their EFC and get more need-based aid by leaving out a few extra points on the FAFSA or omitting information. However, it’s never wise (or legal) to falsify or omit information on the FAFSA—so don’t.

One way to potentially lower your EFC is to be declared an independent student, though this requires meeting certain criteria. By removing a parent’s income and assets, it could substantially decrease the EFC and qualify you for more aid.

But even if you’re a dependent, you still can have your EFC adjusted. A lot may change in your family’s financial situation between the tax year reported on the FAFSA and the time that the school year actually starts.

In some cases, financial aid administrators may have the discretion to adjust or amend your FAFSA information, and potentially your EFC. This process is called a professional judgment, and is typically reserved for unusual circumstances with proper documentation.

Your financial aid office can help you complete the student aid appeals process, or help you find other sources of student aid for which you may be eligible.

Article Sources

  1. Federal Student Aid. "How to Review Your Student Aid Report." Accessed Oct. 30, 2020.

  2. Federal Student Aid. "The U.S. Department of Education Offers Low-Interest Loans to Eligible Students to Help Cover the Cost of College or Career School." Accessed Oct. 30, 2020.

  3. Federal Student Aid. "7 Things You Need Before Filling Out the 2020-21 FAFSA Form." Accessed Oct. 30, 2020.

  4. Federal Student Aid. "What Is Professional Judgment?" Accessed Oct. 30, 2020.