Financial Aid, Part 3: Expected Family Contribution

Post By: COYD Staff

Estimated Family ContributionThe Expected Family Contribution (EFC) is an estimate of how much a student and their family should be able to contribute to the cost of attending college.  The EFC comes up often when planning for college financial aid applications.  The calculation for Expected Family Contribution comes from a formula with a variety of parts, and the formula is not simple.

The basic use of the EFC is like this:  After the EFC is computed from the forms and formulas, the EFC is subtracted from the attendance cost for whatever college to which the student is applying.  The difference between the Expected Family Contribution and the cost of attending a college is the financial need of that student.  For example, if the EFC for a student and their family is $20,000 per year and the cost of attending their chosen university is $30,000 per year, then the financial need from this basic calculation will be $10,000.  The student in this example would be eligible for need-based financial assistance from both the school and the FASFA application.  However, if the EFC is greater than the cost of attending a college, then the student isn’t eligible for need-based financial aid.

Expected Family Contribution values are used by both private colleges and FAFSA, the federal financial aid program.  The federal application and aid applications for private colleges use similar, but not identical, formulas to compute the EFC.  Private college financial aid formulas may vary slightly, but the FAFSA formula is set by law.

Because the FAFSA version of EFC is set by law, you can use calculators, like the one provided by the Department of Education at FAFSA4caster, to estimate the Expected Family Contribution.

There are a number of components to the EFC formula, but some of the major items are:

  • Parents’ Assets – savings, investments, and business assets owned by the student’s parents
  • Parents’ Income – the total income of both parents (if applicable)
  • Student’s Income – the total income of the student
  • Student’s Assets – savings, investments, and business assets owned by the student
  • Taxes Paid – taxes paid by both the student and their parents’ may provide adjustments to the formula
  • “Income Protection Allowance” – the total number of people in the parents’ household and the number of students

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