’)One of the great mysteries of applying for federal financial aid is how your Expected Family Contribution – also known as EFC – is calculated. Knowing your EFC will help you to determine which college you can feasibly afford to attend.
What is EFC?
EFC is the amount of money that your family is expected to contribute toward the cost of attending college. This includes but is not limited to tuition, fees, books, room, and board. The cost of attending college minus your EFC is considered your financial need.
Your EFC is calculated by a formula called the Federal Methodology (FM). Whenever you complete a Free Application for Financial Student Aid (FAFSA), the FM is used to calculate your estimated contribution. There are several key factors used to calculate your EFC. Here are just a few of the considerations:
• Your income
• Your family’s income
• Your parents’ cash assets
• Your cash assets
• Number of children in the household attending college
According to CollegeData, once your EFC has been calculated, you and up to four colleges will receive a Student Aid Report (SAR). (You may list up to four colleges on your FAFSA that are authorized to receive this report.) The college uses this information to determine your financial aid package.
The EFC Calculator
If you’re curious about the amount that your family is expected to pay and don’t want to wait for your SAR to arrive in the mail, you can use one of many free EFC calculators that are available on the Internet. CollegeData provides a free online EFC calculator that you can use now. (Please note that the official calculations will be sent to you once your FAFSA has been processed.)
In essence, the higher the amount of cash and assets you have, the more you are expected to contribute to the cost of attending college. Your cash and assets alone will be used to calculate your EFC if you are not claimed as a dependent on your parents’ income taxes.
How to Use the EFC Calculations
Once you receive your results, you can do some cost comparison. It’s always wise to shop around for a college. The good news is that it may be more cost-efficient to attend a more expensive college, depending on the final numbers of your Expected Family Contribution.
The reason you may be eligible to go to a more expensive college is because you’re most likely to get a bigger award to attend it. On the other hand, many students and parents are surprised at the final calculations because they often cannot afford to pay what the federal government expects them to pay. They may have to turn to alternative funding sources like student loans and scholarships to bridge the gap between their resources and financial aid award to fund their college education.
If you’re still a little confused about the process, you may want a more detailed explanation about how the EFC calculations are determined. Money-zine.com gives a simple explanation in plain language about how the process works. Knowing this information in advance will help you to choose a college that will not only meet your educational needs but will also be affordable for you and your family.
