Question:

What is an EFC and what determines Financial Need?

Answer:

Aid from most federal programs is awarded based on financial need (except for unsubsidized Stafford loans and PLUS loans). 

The Expected Family Contribution (EFC) number is used by the federal government to determine  a student’s need.  The EFC is a measure of your family’s financial strength and is calculated from the information you reported on the Free Application for Federal Student Aid (FAFSA).

A student’s EFC will appear on their Student Aid Report (SAR) submitted to the student once the federal government processes the student’s FAFSA.

The EFC is calculated according to a formula established by law.  Your family’s income (taxable and untaxed), assets and benefits (for example, unemployment or Social Security) are all considered in determining a student’s EFC.  Also considered are a student’s family size and the number of family members who will attend a college or career school. 

To be eligible for a federal Pell Grant, your EFC must be below a certain number, which can vary from year to year.  To determine your financial need for federal student aid programs (except for an Unsubsidized Stafford loan), your school will subtract from the total cost of attendance the following: the EFC, any Federal Pell Grant amount you’re eligible for, and other financial aid you’ll receive.  If anything is left over, you’re considered to have financial need for additional student aid.

Philosophy of Need-Based Aid

• Paying for College is a partnership

• First responsibility of student and family

• Aid is a supplement to family resources

• Dependency status defines partners who pay

• Need analysis measures ability to pay not willingness.

* This information is located in Funding Education Beyond High School, The Guide to Federal Student Aid 07-08, U.S. Department of Education  and information provided by Using Professional Judgment to Help Families Pay for College, CollegeBoard (2006