There’s a lot to know when applying to College and the Financial Aid Process, but one of the most important numbers to be aware of is your EFC, or Expected Family Contribution. Your EFC is meant to help you figure out how much you might have to pay for college.
Your Expected Family Contribution (EFC) is an index number that colleges use to determine how much financial aid you’re eligible to receive. Your EFC is calculated according to a formula established by law and the information from your Free Application for Federal Student Aid (FAFSA). The EFC number represents the minimum amount any given school will expect you to pay each year your student is in college.
According to Sallie Mae, “the EFC factors in your family’s taxed and untaxed income, assets, and benefits (such as unemployment or Social Security). Your family size and the number of family members who will attend college during the year are also considered.” Other factors that can have an impact on increasing or decreasing the EFC include: parent assets, student assets, student income, and possibly household projects such as construction & home improvements.
Note: Your EFC isn’t the amount of money your family will have to pay for college and it isn’t the amount of federal student aid you’ll receive.
Typically, the lower your EFC, the more financial aid you’ll be eligible to receive. Your financial need can be found by subtracting your EFC from a school’s cost of attendance (COA). The COA is typically tuition, books, supplies, transportation, room, and board.
COA – EFC = financial need
For instance, if your COA is $16,000 and your EFC is $12,000, your financial need is $4,000; so you aren’t eligible for more than $4,000 in need-based aid
Based on this formula, your school’s financial aid office will prepare a financial aid package and send you a financial aid award letter.
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