Paying for College

EFC: The Expected Family Contribution

"How much will college cost this family?"

That may be the most asked, or at least pondered, question for any parents doing some serious thinking about their high schooler's higher education. Enter the Estimated Family Contribution (EFC) and the EFC Calculator.

What is the EFC? Here's defines it:

The Expected Family Contribution (EFC) is a measure of your family's financial strength and is calculated according to a formula established by law. Your family's taxed and untaxed income, assets, and benefits (such as unemployment or Social Security) are all considered in the formula. Also considered are your family size and the number of family members who will attend college or career school during the year.

The information you report on your Free Application for Federal Student Aid (FAFSA) is used to calculate your EFC. Schools use the EFC to determine your federal student aid eligibility and financial aid award.

Note: Your EFC is not the amount of money your family will have to pay for college nor is it the amount of federal student aid you will receive. It is a number used by your school to calculate the amount of federal student aid you are eligible to receive.

Now that you know what the EFC is, how do you calculate it?

Well, there are a number of EFC calculators out there, some stand alone and some reside on college Web sites. Perhaps one of the best is the College Board's. They explain:

Students and their families are expected to contribute to the cost of college to the extent that they're able. Use this Expected Family Contribution (EFC) Calculator to:

  • Estimate how much your family will be expected to contribute. After all, you can't make a realistic plan to cover your share if you don't have an idea what your share could be.
  • Gain insight into your financial aid eligibility. If you're unable to contribute the entire cost of college, financial aid is available to bridge the gap. That's how the financial aid system works. The difference between the total cost and your EFC is considered your "financial need" and the amount of aid you're eligible to receive.

What follows is a multi-part questionnaire that asks about these areas of your family's situation:

* Student Status

* Pick a Formula

* Family Size

* Family Information

* Finances

* Results

For example, here are the questions from the Student Status section:

Was the student born BEFORE January 1, 1986?

Is the student an orphan or a ward of the court, or is the student an emancipated minor?

When the student was 13 or older, were both of the student's parents deceased, was the student in foster care, or was the student a dependent/ward of the court?

At any time on or after July 1, 2008 did the student receive an official determination that the student is an unaccompanied youth who is homeless or at risk of being homeless?

Is the student a veteran of the US. Armed Forces, or will be a veteran as of June 30, 2010, or is the student currently serving on active duty?

Is the student currently married?

Will the student be working on a degree beyond a bachelor's degree in school year 2009-2010?

Does the student have dependents (other than his or her spouse) that he or she supports?

. . . and so on through the other sections. What you get after completing the process is an estimate of what your family will be expected to pay as your "fair share" of college costs.

A quick and dirty exercise might be to get some ballpark idea of what certain schools would cost your family, assuming that your son or daughter can get in. Let's say that the total student budget for a school (tuition, room and board, and perhaps other sundries) is $50,000 per year (ouch!).

Now, taking your EFC result--let's say that it's $15,000--and subtracting that from the $50K school cost gives you a result of $35,000. That (roughly) is going to be what your family will be responsible for, and which will come from savings, loans, grandma, etc.

Don't pass out yet, though. There are mitigating factors, such as merit aid, scholarships, and (sometimes) negotiable need-based aid. Those topics are fodder for another blog entry, though.

The point of this post is to alert you to the EFC, if you didn't already know about it, and to give you a tool with which to make some estimates. The Web is bursting with great information about the complex world of financial aid. I encourage you to explore it. Also, as I often do, I suggest that you check out what parents and students have to say about the real world of financial aid on the College Confidential discussion forum. You'll be glad you did.


Don't forget to check out all my admissions-related articles and book reviews at College Confidential.