Estimated Family Contribution (EFC)

The expected family contribution (EFC) is a concept used in financial aid methodology to figure out how to distribute financial aid resources.
• It is defined as how much money a family or individual is expected to contribute towards college education for one year.
• The lower the EFC the more financial aid becomes available.
• It is calculated using the information provided on the FAFSA including:

• Family size
• Number of family members in college
• Family savings
• 529’s and Coverdell educational expense accounts
• Current earnings

• Once you submit your FAFSA the EFC information is distributed to all of the colleges you listed as potential choices for attendance
• Each school will then use the information to determine your financial need to produce a financial aid award letter listing what funding you are eligible for. This includes Federal, State, and Institutional need based grants, Work Study, and Federal loans. Be advised that Merit Based Scholarships may be included as part of your financial aid award letter but are determined by separate criteria from the FAFSA.
• The EFC will be used to determine Financial Need
• Your EFC may vary from one institution to another based on their internal policy and procedures in conjunction with federal financial aid regulations.

Ken’s Tip – Only the lowest EFCs will qualify for the most need based funding. Unfortunately many middle class families do not qualify due to their income. However, even if you do have a modest household income putting you out of aid eligibility, make sure you file the FAFSA on time anyway. At the very least you will qualify for a federal unsubsidized Stafford loan to help pay tuition.

The best advice is “hope for the best, but prepare for the worst.” Don’t get discouraged if your EFC is too high to qualify for need based funding. Hopefully the student qualifies for some kind of merit based scholarship and it is recommended that the student completes as many outside scholarship applications as possible through websites like Fastweb or Studentscholarshipsearch

Beyond that, the only other viable option is student loans. I recommend you use all of the federal loans available such as the Stafford loan and the Parent Plus loan. If after using all available federal loan options there is still a balance due, then look into using a private loan.