You plugged in all your information, dotted your i’s, crossed your t’s, and finally your Free Application for Federal Student Aid (FAFSA) is completed.
Sit tight. You’re waiting for the United States Department of Education to spit out this grand number, and that’s going to take a week or two. In the meantime, you’re going to need to know what Expected Family Contribution means. The Expected Family Contribution, better known as the EFC, is a term used in the financial aid process to determine an applicant’s eligibility for federal student aid. It is located on the Student Aid Report (SAR). Basically, it estimates how much the government thinks you (if you’re independent) or your parents (if you’re dependent) can afford to pay for college without them.
Break it down
If your number is low, don’t despair, that’s actually good news: that means you will have more aid available to you! Zero is the lowest EFC number; 99,999 is the highest. If a dependent students’ family’s income is less than $24,000 and government assistance was needed for that filing year, the EFC will automatically be zero. A zero means a family has no ability to contribute to the student’s education.
If your number is high, well… Here’s where we hear the term sticker-shock. The school and even the U.S. Department of Education doesn’t really think you’ll be able to fund the entire EFC amount, but they’ve decided you don’t need them. Don’t panic: this number isn’t necessarily what you have to pay to a college; it’s just a number they use to see if you qualify for need-based financial aid. A high number now means you need to explore something other than need-based financial aid.
EFC is calculated from answers on the FAFSA, usually income ranking heaviest. If other members of the household are projected to attend college at the same time, that will also lower a students EFC. Unusual circumstances can also lower the EFC – loss of employment, loss of child support, divorce, death, or medical expenses not covered by insurance, for example. Be sure to answer all applicable questions on your FAFSA, even if they seem insignificant; this is crucial in determining an accurate EFC.
What does it mean?
The EFC will then be subtracted from the cost of attendance (COA) of the college or university to determine your financial need. Eligibility for most federal, state, even local and institutional aid programs are based on this number. For example, in order to get a pell grant in 2014-15 the maximum EFC for a student to be eligible is $5157.
Like we said above, if you have a low number, your college will work with you to obtain the need-based finical aid offered to you. If you have a high number, you need to consider other options. Choosing an affordable college or university is your first practical option. Also look to maximize your merit aid. Some schools offer merit money to affluent families.
Paying for college isn’t easy for anyone; it’s more expensive than it’s ever been, and all but the super-wealthy are going to need some kind of financial help. Knowing your options, and knowing all of the terms thrown around, is essential to help keep yourself out of financial trouble. Educate yourself before your education, and choose an affordable, high-value college, and even a high EFC won’t be a stumbling block.