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Where To Find Money For College

Parent’s Scholarship Guide 102: The Expected Family Contribution (EFC)

Category: College Money Strategy, Financial Aid Process
3 comments EFC Expected Family Contribution

EFC vs The Reality


The very first step in the financial aid process and the College Money Strategy™ is finding out how much you, the parent, is expected to pay towards your student’s college costs. You are likely going to be expected to pay something ….. whether you think you can afford to or not! This expectation is known in the financial aid world as your Expected Family Contribution or EFC. Your “official” EFC is calculated as a result of filing your Free Application For Federal Student Aid or FAFSA. When a FAFSA is filed it generates a Student Aid Report or SAR and it is on this SAR that you will find the EFC. With me so far? It’s a complex calculation that uses income and asset numbers for the student and the parents. Income is counted more heavily than assets and student income and assets more than parents’. Straight forward right?

I say this is the first step because getting an idea of your EFC before you file the FAFSA will let you know where you stand when it comes to financial aid. You want to do this early when your student is a junior, maybe even a sophomore in high school and calculate it at least annually right up until you file the FAFSA. So how do you do that? There are many EFC calculators out there but I like the free EFC calculator provided by the Dept. of Education. You can find that link on my Resources page.

EFC and the College Money Strategy™

So the EFC is just a calculation of a families finances to determine how much of the college costs the family should pay…. is that all? Not really, as part of your financial aid maximization strategy it’s also important to understand how the EFC is derived so you can determine whether you need to make adjustments to your finances? Here are the steps you must take:

1. Go and calculate your EFC using the link in my Resources page. Please use this free calculator. It will be more accurate. You will also be able to plug in the cost of a college. Not only will it tell you if you have a financial need but it will also estimate what Federal Aid you may qualify for.

  • First thing to notice is that when you put your financial info in the calculator it will automatically include parent and student assets in a gray box. These are called protection allowances. This means that your EFC will not be affected if your assets are the same or less. If they are greater then you have to check the box and input the true asset numbers and your EFC will adjust higher based on your asset levels.
  • There is also a link called asset net worth. Please click the link so you know what to include and what not to include. People make more money losing mistakes here because they put in assets they shouldn’t.
  • Once you hit the submit button you will need to scroll down to see the EFC. It’s not easy to find and it’s in tiny letters and says….. “your estimated EFC is $xx,xxx.”


2014 EFC Table

EFC Color Code


2. You can also find where your EFC falls on the chart above using your AGI and the number of dependent children you have. This is a very rough estimate because it does not include your assets. It also doesn’t include any student income or assets. If you used the chart:

  • You now know your EFC, so let’s do some basic analysis. Look at the color brackets to help you get a rough idea as to whether you will qualify for need based aid or not. The bold numbers in the blue area are the EFC numbers that qualify for the Pell grant.
  •  Subtract the EFC from the cost of attendance at a specific college your student is thinking about applying to (You can find the cost of attendance on the college website) This will tell you if you have a financial need
  • If you have more than 1 student in college then divide the EFC by the number of students in college and repeat step 3 for each student. (note: You divide the EFC by the number of students because your EFC is what you are expected to pay for ALL students in your family going to college at the same time)


3. Now that you know your EFC let’s do some advanced analysis. You have to now determine whether you can lower your EFC.

  • Go back to the EFC calculator
  • Run a calculation and only include parents’ income, If you changed the asset numbers because yours are higher then uncheck the asset box and let the calculator use the protected allowance asset numbers. If you included student income then remove the income number and recalculate your EFC. If the result gives you a lower EFC then you know that one, if not all, of the three factors you left out are raising your EFC.
  • Run other calculations using various combinations but always include parents’ income. This will help you determine what’s driving the increase in your EFC. Try some of these combos:
    • parents’ income and assets
    • parents’ income and student’s income and assets
    • parents’ income and student’s income
    • parents’ income and student’s assets
  • Once you’ve narrowed down what’s driving the increase you will need to determine if it’s possible to not include the parent asset, student income or asset when you file your FAFSA. Here are some ideas:
    • Student can work less in the year prior to attending college and throughout the college years
    • Before filing the FAFSA you can use the student assets to buy things needed for college, ie: computer, car, clothing, supplies, etc.
    • Before filing the FAFSA you can use parent assets to do some of the above. Student assets are counted heavier so consider using theirs first
    • Before filing the FAFSA you can use parent assets to pay off debt, ie: credit cards, primary home mortgage or equity lines, etc.
    • Just keep in mind you may need some or all of your assets to fund your out of pocket costs
    • If you use parent and student assets to pay the out of pocket costs for the first year of college, assuming all else is the same, you may qualify for more need based aid in year two

If your EFC is too high to qualify for need based aid then your College Money Strategy™ will need to include merit aid maximization techniques which is and will be a major focus of this website. You will still need to file a FAFSA because many merit aid opportunities require it. You may also qualify for attractive low interest Federal aid loan opportunities.

Your Next Move

Now that you have your EFC I recommend that you calculate it every year until you have to file the FAFSA. If you are one of those kind of people that love the details then you will find all the current EFC details published by the Dept. of Education on their information for financial aid professionals website (IFAP). You can find that link on my resources page as well!

Your next move is to find out what the Federal Gov’t is offering as well as your individual state. Below is a blog post on the Federal student aid. You can also find your state’s student aid on the home page, click the links below:

Federal Student Aid: Everything You Need To Know Is Right Here

State Student Aid – Financial aid offered by your state  – Scroll down until you see the US map and click on your state!

Your questions or comments are welcome below and if you found this blog post helpful then please share it!

Leave a Comment

3 comments… add one
  • Todd Weaver

    This is helpful information for those applying to “FAFSA only” schools. However, most people don’t realize there are two (2) formulas that most colleges use… the Federal Methodology and the Institutional Methodology. You could have a family run through the steps above only to see it go for naught if the student applies to a “Profile” or “Institutional Methodology” school.

    Also, for item number 3, be VERY careful about the tax ramifications for burning down assets and manipulating income. That could be a family’s downfall, if they’re not careful.

    • Jonathan Pagano

      Great points Todd!. Income is the hardest to make adjustments to and in my experience asset shifting doesn’t help many. Most have EFC’s that are either too high or too low to justify the strategy. But it’s always worth knowing the options that are available!

  • Michael King

    Actually Todd, that’s not entirely correct. There are those schools that use the Institutional Method or Profile for determining how to distribute school funds, but there are only about 300 schools that use this methodology, most of which are private schools. ALL schools use the FAFSA for determining how to award federal funds.