Archived - EFC: The Expected Family Contribution--Managing the Price of College

EFC: The Expected Family Contribution

The Expected Family Contribution (EFC) is the way a family's ability to pay for college is calculated. The formula for determining eligibility for federal aid programs is the same across all colleges. When you apply for financial aid, expect to answer questions about your family's income and savings. Most of this information is readily available from your tax returns, paycheck stubs, and bank and other financial account statements. Remember that this formula does not consider the actual price of attending a given college or university--your EFC is the same regardless of whether you attend a public college with a tuition of $5,000 or a private college that charges $22,000.

**Expected family contribution (EFC)**
Family income level	Typical EFC range
Below $20,000	$0	&	$800
$20,000-40,000	$900	&	$3,400
$40,000-60,000	$4,100	&	$7,650
$60,000-80,000	$8,950	&	$12,850
$80,000-100,000	$12,000	&	$16,850
Above $100,000	$17,800	&	$33,800

SOURCE: U.S. Department of Education, National Center for Education Statistics, National Postsecondary Student Aid Study: 1995-96

The above table provides a range of typical EFCs for students attending college full time and for the full year during the 1995-96 academic year by family income. By "typical" we mean that one-half of the college students from families with the specified income have EFCs within the indicated interval; one-quarter were expected to contribute less and one-quarter were expected to pay more. Therefore, the above table provides a general idea of what EFC prospective students can expect to face.

The EFC formula considers: family income; accumulated savings, the amount of taxes paid; family size; the number of children simultaneously enrolled in college; the age of the older parent and how close they may be to retirement; and the student's own financial resources.

The EFC table shows that families of modest economic means are expected to contribute less to their children's college education than wealthier families. Most families with incomes less than $20,000 are expected to pay less than $800, while most families with incomes greater than $100,000 are expected to contribute more than $18,000. The table shows that a family's ability to pay (EFC) varies quite a bit within many of the family income groups. This is due to the factors other than income that are considered when determining a family's ability to pay.

To figure out your own EFC, you have to fill out the Free Application For Federal Student Aid (FAFSA) form and submit it to the financial aid office of the colleges you are applying to. Or you can make the calculation yourself using computer software that will provide personalized EFC estimates for prospective college students.²¹ Does this calculation mean that this is what you will have to pay, regardless of other factors? No.

What you end up paying for college may turn out to be quite different than the EFC for a number of reasons. There are factors in addition to financial need that come into play in determining how much you will have to pay. These factors include:

non-need-based financial aid (merit scholarships);
attending colleges that are priced less than your EFC;
rejecting a portion of your financial aid awards (especially loans);
colleges being unable to meet the financial need of all their aid applicants; and,
potential financial aid recipients deciding not to apply for financial aid.

Non-need based financial aid. Financial aid is also available without regard to financial need. This aid ranges from unsubsidized loans (you pay the money back and you pay the interest on the loan while in school), to merit scholarships (you don't repay anything).

Many students do not get aid simply because they fail to apply. The table below indicates the percentage of full-time college students who applied for financial aid by family income, and the percent of those who applied who received some form of financial aid. Note that the vast majority of all aid applicants receive financial aid.

**Applying for and Receiving Financial Aid**
Family income level	Applied for aid	Applicant received aid
Below $20,000	90%	96%
$20,000-40,000	83%	93%
$40,000-60,000	72%	88%
$60,000-80,000	64%	87%
$80,000-100,000	59%	84%
Above $100,000	42%	82%

In 1995-96, approximately one-third of all financial aid received by full-time, dependent students was distributed without regard to financial need. The majority of this aid was in the form of loans where the borrower incurs interest charges while in school.