What does it mean?
EFC stands for Expected Family Contribution. When students submit their FAFSA (Free Application for Federal Student Aid) or PROFILE financial aid forms, the information is used to calculate their EFC. The EFC is the amount of money that the family is expected to be able to pay for college. Colleges use the EFC to determine how much financial aid to award students.
How does your EFC affect how much you’ll pay for college?
Theoretically, the EFC should be the maximum amount students would pay to attend any college. If a college charged more than the EFC, the student would receive financial aid to make up the difference. If the college charged less than the EFC, the student would not be eligible for any need-based aid.
There are two major areas where the reality of EFC departs from the theory. The first is generally how big the number actually is. Most families are shocked when they first see their EFC. It often seems to have little relation to the reality of their financial situation.
The second is that the vast majority of colleges do not have the funds to fully meet every student’s financial need. This means that most students’ financial aid awards will have a gap between the awarded money and the need. And it’s usually filled with loans. Therefore, the reality is that EFC should be considered a minimum amount families should expect to pay, not a maximum.
It may seem obvious how EFC affects how much you pay for college. After all, it’s the amount of money that some formula somewhere says you have to come up with. But what’s more important is the differences among colleges in how they use EFC in allocating their institutional awards.
Some colleges decide to use their money to meet need as defined by EFC. Other colleges will provide more merit-based aid that considers academic qualifications or other forms of student achievement rather than EFC. Some colleges do a combination of both.
This means that depending on your EFC, you should target colleges more likely to provide institutional aid for your situation.
Where can you learn more?
Expected Family Contribution Calculator (Calculates both federal and institutional methodologies)
Connect with other parents figuring out how to pay for college
COFFEE CUP COLLEGE PLANNING