Expected Family Contribution (EFC)
What is EFC?
EFC refers to Expected Family Contribution, a monetary value used by universities to award financial aid to students. In simple terms, an EFC figure is the amount of money that a student’s family is expected to contribute towards his or her education. To evaluate a student’s financial need, a fixed formula is used: the EFC is subtracted from the Cost of Attendance (COA). The COA is an estimate of the student’s total necessary college expenses while enrolled in a certain program.
EFC for Student Loans
In order to apply for financial aid, students need to fill out the Free Application for Federal Student Aid, the FAFSA, which can be done online at fafsa.ed.gov. Once a student’s FAFSA has been processed, they will be issued an official EFC figure. The EFC is then sent to the college the student plans to attend. A student’s Financial Aid EFC may vary depending on which college he or she is applying to, but is generally calculated using the federal or institutional EFC methodology. The federal EFC method is based upon a fixed formula established by the government, which determines eligibility for federally sponsored aid options such as federal Stafford and Perkins loans, Pell grants and work-study. The Institutional EFC method may vary from college to college and is used instead of, or in addition to, the federal EFC to determine a student’s eligibility for private or institutional aid options. Once a student’s EFC and financial need are calculated, an appropriate aid package will be awarded.
Alternative Financing Options
If federal or institutional awards do not sufficiently cover all of your expenses and if you require further monetary assistance, then you can always apply for private student loans. These loans are a viable alternative to other financing options and have less stringent eligibility requirements, as well as flexible borrowing limits. With several private student loans on the market, it is integral that you do your research before settling on a particular private student loan. You can use the Student Loan Comparison Tool on our website to view key features of different alternative loans and select the one that best suits your needs.
EFC plays an important role in a student’s financial aid application, as it stands for “estimated family contribution.” Essentially, EFC determines how much money the student’s family can put towards the cost of attendance. Notably, the federal government takes the difference between EFC and COA under consideration when awarding aid.
When it comes to financial aid, why is EFC so important?
EFC stands for estimated family contribution, and it plays an important role when applying for federal financial aid. As federal aid is based on the student’s demonstrated need, it calculates the estimated family contribution and awards aid accordingly. Students are awarded on the basis of their EFC and COA (Cost of Attendance). Notably, it is important for students to include their parent’s tax return information and W2 forms with the FAFSA application. And of course, in order to take full advantage of federal aid, students should apply before the deadline date.
Can you tell me about expected family contribution?
Expected family contribution (EFC) is the amount that the educational institution expects a student to afford. EFC is based on factors such as family income, investments and assets, and other family members in college, which in all, determines the student’s eligibility for aid.