What is Expected Family Contribution?- The Key to your Financial Aid

Have you ever thought how the financial aid gets calculated once you fill the FAFSA? Learn more about what is the expected family contribution? How is it calculated and more.

TCM Staff

17th October 2020

Expected Family Contribution (EFC), is the process of measuring a student's financial position calculated using a formula set by the law.

The process of calculation includes assets, social securities, taxed and untaxed income, candidate's family size, and those in the family who attend college during the particular year.

There is a misconception among the students and parents that you should keep in mind. That is, your EFC is not the amount of money that is expected of your family to pay for your college, nor is the amount of federal student aid you will be receiving. Instead, it is a number used to calculate the amount of federal student aid you are eligible to receive in your school.

Suppose you’ve filed your FAFSA (Free Application for Federal Student Aid) form by giving the correct information necessary to check your SAR (Student Aid Report). Have you ever wondered how the data consisting of a list of available financial aid comes up? Well, that’s where EFC comes into play, keep reading this article to know more about EFC.

Also, Read - A complete guide on FAFSA

How is the EFC Calculated?

Your EFC calculates from the information that you provide in your FAFSA form, which will be the first step that you’ll have to do to obtain financial aid for your education.

As aforementioned, it considers a few factors such as the household income and the family members respective of the dependency status whether the student is dependent or independent with a spouse or even independent student with dependents other than a spouse.

The formula for EFC classifies into a standard and simplified format for each applicant.

The applicants who are eligible for the simplified formula will not be required to fill in much financial information to estimate their EFC.

This simplified EFC formula is generally for families with lower incomes. It is mostly with earnings below $49,000, and also those who currently benefit from federal assistance programs, such as Medicaid, the Supplemental Security Income Program, or the Free & Reduced Price School Lunch Programs and more.

Understanding EFC

The financial aid offered to the students may include many sources such as rewards like scholarships and grants or other financial assistance such as student loans.

Other common forms of federal need-based aid are as follows - 

  • Federal Pell Grant

  • Federal Supplemental Education Opportunity Grant (FSEOG)

  • Direct Subsidized Loan

  • Federal Perkins Loan

  • Federal work-study

Ultimately, one thing that you should keep in your mind is EFC is not the amount of money you or your parents have to pay. Still, instead, it helps the federal government and your school decide how much financial aid you will receive based on the information you have provided in the FAFSA.

To give you a clear picture of what is EFC is, refer to the simple equation given below.

COA - EFC = Financial need.

It looks so simple, just subtracting it from your school’s (COA) Cost Of Attendance. Your financial need can’t exceed your cost of attendance.

For example, if your COA is $10,000 and your EFC is $5,000, then you can’t receive more than $5,000 in your financial need.

What if your EFC is zero?

If the student’s family’s financial situation couldn’t contribute anything towards the student’s college education, then that student’s EFC can be zero.

You may have a question, “what happens if my EFC is zero?” the SAR will appear as multiple zeros in a row. When the student has zero EFC, that doesn’t mean the school will be covering the entire cost of attendance.

The fact is most of the schools will only cover 50-60% of the student’s financial aid. After subtracting the amount the school has covered, the remaining amount said to be known as an unmet need. The student or his family will have to be responsible for finding other financial sources for this unmet need.

A person making less than $25,000, and if he files a 1040 or 1040EZ tax return, then EFC will automatically be zero.

Factors that Influence EFC

Not everyone gets an EFC to pay for a student’s education; many factors influence the amount of money that can be available for the family.

Income is one of the most apparent factors, diversion from the median income of $50,000 in 2010-2020 could result in an increased or decreased need for aid.

However, there are a few things that you think may not be considered in the income. Still, they do count, such as Social Security benefits, combat pay, and also contributions to retirement accounts.

In terms of obtaining an EFC like the influencing factors, few factors are not into consideration. 

  • It doesn’t consider the debate

  • Credit cards

  • Payday Loans

  • Previous Student Loans

  • Personal/Signature Loans

The primary residence is also not considered an investment as per the FAFSA Guidelines.

Why Does the EFC Matter?

According to the College Board, it said that 54% of the high school students are not considering financial aid when choosing a school. The EFC used for many purposes than just estimating the financial need.

The EFC is also used to help students in determining which school to attend. So it is recommended that the students learn their EFC in advance, so by using that number, the students might be able to choose schools based on affordability with aid.

It also keeps the students more informed with the choices about their educations and the value attached to it.

And about knowing your EFC, you can make decisions concerning their financial means and objectives. You can plan your future education plans on which college to apply for and also trying to arrange how to cover the college expenses. 


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.

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