When you’re filling out your FAFSA application, you’ll be asked about your Expected Family Contribution. This is essentially a reference to how much your family is going to contribute to paying your educational expenses.
However, the number you input here is not simply a guess, nor is it based on what your family says it’s going to pay. As with so many other things related to college, the Federal government, and finance, it’s a bit more complicated than that.
Here’s everything you need to know about the Expected Family Contribution:
1. There’s an official formula to follow.
Filling out the expected family contribution portion of the FAFSA application isn’t something you can just do based on your parents’ bank information. There’s an official formula you have to follow that calculates your EFC based on a wide range of factors. Fortunately, there are several free calculators online that will help you with this.
2. The formula changes every year.
One of the trickiest parts of the EFC is that the formula isn’t static. It changes every year, and that means that the amount of your EFC changes every year. This is one reason why you have to submit a new FAFSA application each year. It also means you should be prepared for your financial aid to change – although any change is likely to be minor.
3. It’s possible for the EFC to be an automatic zero.
If your family’s income for the previous tax year was less than $26,000, your EFC is automatically zero. This will result in the highest level of financial aid since you would have the greatest need for financial aid.
4. Your college savings matter.
If you have a college savings account, that will be factored into your expected family contribution. That’s because, presumably, you’ll be using money from that account to pay for some of your educational expenses. Basically, you already have money set aside to help pay your expenses, so your need for financial aid is lowered.
5. There’s a simplified needs test.
If your family income was between $26,000 and $50,000 last year, you’ll need to use the simplified needs test instead of the standard EFC calculation. The primary difference is that the simplified needs test only takes into account your family’s income and not their assets.
6. Your siblings affect the EFC.
For once, you may be thrilled to have a brother or sister, as they’ll lower your EFC. Whether they’re still living at home or they’re in college, the EFC is lower since your parents will have to spend money on them, too. In fact, any family members living at home – whether they’re siblings or grandparents – will lower your EFC.
7. Your income and assets matter.
The EFC doesn’t just factor in your parents’ income and assets, it looks at yours, too. Even if you have nothing more than a part-time, minimum wage job, that income counts. You’ll need to enter in your income, how much you have in your bank account, and any assets you have, such as your car.
8. Unexpected expenses can lower the EFC.
Major medical expenses, home repairs, and other large, unexpected expenses can all lower your EFC. This is only true if these expenses are not covered by insurance, however.
9. Debt isn’t considered for the EFC.
One surprising thing that doesn’t affect the EFC is debt. If your family has credit card debt, mortgage debt or car payments, these won’t be factored into the EFC. This surprises many people since debt payments like these do affect how much any family is actually able to contribute to their child’s education.
10. The EFC is not what your family will pay.
The expected family contribution is just a number that’s used to help determine your financial needs; it’s not actually what your family will pay. Each university has a certain amount of federal money that’s to be used for students in need. The EFC is the figure that is used to determine how to allocate those funds. Students with the lowest EFC get a bigger share of the available money.
11. The EFC isn’t for student loans.
While your FAFSA application is used for student loans, the EFC actually isn’t for student loans, so much as for the available grants and need-based scholarships. Federal student loans are available for anybody and are not distributed based on financial need.
12. Your parents may fill out this part of the application.
It’s common for parents to fill out this part of the FAFSA application since much of the information needed for the EFC calculation is theirs. After all, you probably don’t know much about your parents’ assets or bank accounts.
13. Some schools use the CSS profile instead.
You may notice that your school is requesting a CSS profile instead of an EFC. This is common with wealthier schools and private universities. It serves the same purpose as the EFC, but CSS profile includes the equity in the family’s primary residence as part of its calculation, while the EFC does not.
14. Your EFC can exceed the cost of attendance.
Since the EFC is based on your family’s income and assets, it’s possible that your EFC will exceed the cost of attendance. This doesn’t affect your eligibility for student loans or scholarships, but it does mean you will not receive any need-based aid.
15. EFC will be replaced.
Beginning in July 2023, the expected family contribution will be replaced with the Student Aid Index for the 2023-2024 academic year and beyond. It’s expected that this will be nothing more than a change in the term, and that information used in the calculations, as well as the method of distributing the funds, will remain unchanged.