If money is an issue, and it usually is, it’s important that parents
obtain their Expected Family Contribution before exploring their
teenagers’ college options.
Here is a summary of what parents need to know about this important number:
1. An Expected Family Contribution is a dollar figure that represents what financial aid formulas believe a family should be able to pay for one year of a child’s college education.
2. Families with adjusted gross incomes of $24,000 or less have an automatic EFC of $0. The EFC for the average American household with an AGI of $50,000 will usually range from $5,000 to $6,000. There is no cap on EFCs so some very wealthy families will have EFCs that exceed the cost of an expensive private university.
3. It’s best to get a ballpark idea of what a family’s EFC will be as early as a child’s freshman year in high school. Obtaining a preliminary EFC will give parents a rough idea of the minimum amount that they will be expected to pay for college.
4. Families with household incomes of $60,000 to $80,000 and above typically find that they do not qualify for need-based aid at state universities, but they may qualify for need-based aid at private schools. Determining if a student would be eligible for need-based aid requires subtracting the EFC from a school’s cost of attendance.
The MAGIC FORMULA
COA-EFC=NEED
COA – Cost of Attendance
EFC – Expected Family Contribution
NEED – how much more you qualify for in Need Based Aid.
Example:
COA $30,000
EFC $ 10,000
Need $20,000
What percentage of need does the college give out? In the example the college “meets” 75% of the demonstrated need. 75% of $20,000 is $15,000. Subtract these two numbers $20,000 and $15,000 for an UNMET NEED of $5,000. Thus the college will give the student $15,000 in some form of aid. If the historical giving pattern (HGP) is 50%-50%, meaning 50% of the need met is in scholarships and grants and 50% is in work study and loans then this student would receive $7,500 in scholarships/grants and $7,500 in loans/work study.
So a more accurate cost for this student to attend this college, the cost would be
$10,000 EFC
$5,000 unmet need
$7500 loans/work study
For a total of $22,500 per year.
Online EFC Calculators
You can obtain your Expected Family Contribution by using the College Board’s EFC Calculator. The calculator will produce one EFC using the federal methodology that is linked to the Free Application for Federal Student Aid. The calculator will also produce an EFC using the institutional methodology, which is linked to the CSS/Financial Aid PROFILE. The vast majority of private and public colleges and universities only use the FAFSA while 260 mostly private, selective schools use the PROFILE and the FAFSA.
• www.collegeboard.org
FAFSA4caster is another option that will help you understand your options for paying for college.
• www.FAFSA4Caster.ed.gov
Here is a summary of what parents need to know about this important number:
1. An Expected Family Contribution is a dollar figure that represents what financial aid formulas believe a family should be able to pay for one year of a child’s college education.
2. Families with adjusted gross incomes of $24,000 or less have an automatic EFC of $0. The EFC for the average American household with an AGI of $50,000 will usually range from $5,000 to $6,000. There is no cap on EFCs so some very wealthy families will have EFCs that exceed the cost of an expensive private university.
3. It’s best to get a ballpark idea of what a family’s EFC will be as early as a child’s freshman year in high school. Obtaining a preliminary EFC will give parents a rough idea of the minimum amount that they will be expected to pay for college.
4. Families with household incomes of $60,000 to $80,000 and above typically find that they do not qualify for need-based aid at state universities, but they may qualify for need-based aid at private schools. Determining if a student would be eligible for need-based aid requires subtracting the EFC from a school’s cost of attendance.
The MAGIC FORMULA
COA-EFC=NEED
COA – Cost of Attendance
EFC – Expected Family Contribution
NEED – how much more you qualify for in Need Based Aid.
Example:
COA $30,000
EFC $ 10,000
Need $20,000
What percentage of need does the college give out? In the example the college “meets” 75% of the demonstrated need. 75% of $20,000 is $15,000. Subtract these two numbers $20,000 and $15,000 for an UNMET NEED of $5,000. Thus the college will give the student $15,000 in some form of aid. If the historical giving pattern (HGP) is 50%-50%, meaning 50% of the need met is in scholarships and grants and 50% is in work study and loans then this student would receive $7,500 in scholarships/grants and $7,500 in loans/work study.
So a more accurate cost for this student to attend this college, the cost would be
$10,000 EFC
$5,000 unmet need
$7500 loans/work study
For a total of $22,500 per year.
Online EFC Calculators
You can obtain your Expected Family Contribution by using the College Board’s EFC Calculator. The calculator will produce one EFC using the federal methodology that is linked to the Free Application for Federal Student Aid. The calculator will also produce an EFC using the institutional methodology, which is linked to the CSS/Financial Aid PROFILE. The vast majority of private and public colleges and universities only use the FAFSA while 260 mostly private, selective schools use the PROFILE and the FAFSA.
• www.collegeboard.org
FAFSA4caster is another option that will help you understand your options for paying for college.
• www.FAFSA4Caster.ed.gov