EFC: The Basics


In the college world, the term Expected Family Contribution would seem to have an obvious definition. Logically, one would think the Expected Family Contribution or EFC would signify what a family can actually afford to pay for school. Yet, this could not be further from the truth. The EFC itself is just a starting point.

Let’s begin by explaining first what the EFC is and where it comes from. The EFC is a number that comes from the Federal FAFSA formula and is the starting point for what a family can allegedly afford. This is a complicated formula that factors in a variety of metrics including income and some assets. If the EFC is above the total cost of college, than the family is responsible for the full cost of the university. If the EFC is below the cost of college, the family is responsible for the EFC plus any amount of the family’s need that the school does not meet.

For example, let’s pretend a college costs $20,000 per year and the family has an EFC of $10,000. If the college meets 50% of a family’s need, which is the difference between the Cost of Attendance and the EFC so $10,000 than the family is responsible for $15,000. Again, this is the original EFC of $10,000 plus the $5,000 that the school does not provide any financial aid for.

The process does not necessarily end here though as financial aid includes loans. To truly understand your bottom line amount per year, you have to take the numbers above plus any money that is offered in loans. This will give you your true picture of what a college costs for that particular year.

It is important to note though in conclusion that the EFC and the FAFSA is a year-by-year process and each year as one’s financial picture changes, so to can the EFC.

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