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Did You File Your FAFSA? Four Things You Should Know about Your EFC

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After filing your FAFSA (your Free Application for Federal Student Aid), you will receive a very important number in your Student Aid Report—your EFC. The EFC, or your Expected Family Contribution number, is critically important to determining the cost of your college options.   But many families don’t understand what this number actually means and how colleges use it.

So what is the EFC? Look to these four commonly asked questions to fully understand your EFC and how it will affect your college costs.

What is the EFC?

By definition, the EFC is the number that is calculated by the federal government after you submit your FAFSA. Colleges use this number to determine your eligibility for certain need-based financial aid programs.

Your EFC is not the amount your family will pay for college. The amount your family pays is your net price. To determine net price, you must subtract the total amount you receive in grants and scholarships from the sticker price of the college. Many families also include campus employment and student Direct Loans when calculating their net price.

How does my EFC determine the amount of financial aid I will receive?

As a rule of thumb: the lower the EFC, the more opportunity there is for you to receive need-based grants in your award letters. Similarly, if your EFC is higher, it is less likely that you will receive need-based grants.

If your EFC number is lower than 6000, you could be eligible for a Pell Grant. The EFC number that determines your eligibility for state grants varies from state to state, but in most cases the number has to be quite low.

How is the EFC calculated?

Four variables are used to establish an EFC: parents’ income, parents’ assets, students’ income, and students’ assets. The parents’ income includes adjusted gross income and untaxed income, like voluntary contributions to a retirement program at work. When calculating parents’ assets, the EFC includes all savings and investments except home equity and retirement plans. College savings accounts in the student’s name are also considered to be a parental asset.

Do my financial circumstances directly affect my EFC?

Actually, families with very different financial circumstances can have the same EFC number. Debts are not included when calculating the EFC, and not all assets are considered. Therefore, families could have the same EFC number yet have very different net worths.


Download the Right College, Right Price eBook in the College Countdown Bookstore for helpful tips and techniques at every stage of the paying-for-college process. 

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Tagged in: EFC FAFSA Financial Aid

Frank Palmasani is a Chicago area high school guidance counselor and former college director of admissions, and creator of Financial Fit. In 1985, Palmasani began delivering seminars on the college financial aid and planning process, and estimates that he has reached more than 200,000 people through his talks. He is a member of NACAC, IACAC, and the College Board. Palmasani has been featured in the Boston Herald, the Chicago Tribune, Yahoo! Finance, WGN-TV, WTTW-TV, CBS’s Monsters and Money in the Morning, and is the author of the forthcoming book Right College, Right Price (Sourcebooks, January 2013).

Palmasani is the founder of Financial Fit, which you can find in the College Countdown bookstore.