Expected Family Contribution (EFC)

A student's eligibility for most federal aid depends on a variety of factors, including their Expected Family Contribution (EFC), which essentially is the money each student and their family expect to put toward college education. Although financial aid is available, the primary responsibility for meeting college cost lies with students and their parents.

(Suggested Read: Financial Aid Guide for Students.)

Calculating EFC can indicate how much money each family can contribute toward the cost of college based on data such as income, assets, family size, and the number of family members attending college.  An EFC estimate is determined by the federal processor from the information students provide on their Free Application for Federal Student Aid or FAFSA form. Also, a variety of online tools are available for students to estimate their EFC on the Internet. 

Once the student's FAFSA is processed, they will receive a Student Aid Report (SAR) with their official EFC figure. the EFC information is also sent to the schools listed on the FAFSA for each student. The financial aid officer at the select institutions then use each student's EFC amount to determine their financial aid package.

(Read: our exclusive financial aid FAQs for more detail information.)

Determining Financial Need:

To get started, students must involve their parents to add up the total cost of attending each of their target college(s) for one year. Students can gain a clear idea of the costs by researching each school through  College search. Many colleges provide information to estimate total annual cost of attending their institution. 

Note: Add up fixed items such as: tuition, housing, food services, etc. Also, add the estimated cost of books, clothes, personal expenses, supplies, travel to and from school, and entertainment. Students should try to be realistic in setting these amounts. Now students should take the total estimated cost of one year at college and subtract that amount with their EFC amount. This will give them a general idea of what their financial aid "need" is.

Need is defined as the difference between the cost of attending college and a student's EFC:

Cost of attendance (COA) EFC = Financial need

It is financial need, which makes a student eligible for various types of aid at a particular college. Typically, a student's EFC will remain the same for each college, but their eligibility for aid will vary with the cost of each college. Based on each student's financial need, the financial aid office will then prepare a financial aid package.

Calculating Expected Family Contribution:

The EFC can be calculated using two methodologies-

  1. Federal Methodology:
    The Federal Methodology (FM) is a need analysis formula used by the federal government. It takes into account family income, assets, household size, and the number of family members attending college and other information provided by each student on the FAFSA.  The Federal Methodology is used to determine eligibility for federal / state financial aid, as well as for institutional aid at some colleges. It  also, determines  a student's eligibility for federally sponsored financial aid such as Pell Grants, Perkins and Stafford loans, and Federal Work-Study programs. (Find out ways to Self-Finance college education.)

  2. Institutional Methodology:
    The Institutional Methodology (IM) is a need analysis formula to assist colleges, universities, and private scholarship programs in determining eligibility for institutional and private financial aid funds. The Institutional Methodology  can be used instead of, or in additon to, the Federal Methodology to determine a student's eligibility to receive financial aid from college or private funds. It however, relies on information collected on the College Scholarship Service (CSS) /Financial Aid Profile Application for its calculations. The CSS Profile is used by many private colleges and universities to determine a student's eligibility for non-government financial aid, such as the institution's own grants, loans and scholarships. The CSS typically delves deeper than the FAFSA into a student's family finances. Additional factors in a family's financial situation, for example, finances of step-parents  are occasionally considered to determine a student's eligibility for institutional need-based aid. Also, considering institutional based aid is private determined by each college, the amount may vary from college to college.

NOTE: Both methods indicate the amount of money a family will be contributing toward their child's education. Circumstances such as loss of job,  parents divorce or the death of a parent may affect a candidate's eligibility for federal aid. If a sudent's family is going through special circumstances the student or parents should submit a letter of explanation to the college financial aid offices.