While preparing for college, one of the most important considerations is how to pay for it. All students should complete the Free Application for Federal Student Aid (FAFSA) because it is used to determine students’ potential eligibility for various financial aid programs, as well as various state and institutional-based aid programs. All of this is based on a variety of factors, including your Expected Family Contribution.
Expected Family Contribution
When completing the FAFSA, you’ll need to provide certain information. You need to detail your (and possibly your parents’) income, family size, and number of family members attending college. The FAFSA uses all of the information you provide to determine a figure known as the Expected Family Contribution (EFC). Don’t be alarmed if your calculated EFC is high. Colleges use your EFC college financial aid offices to determine the amount of financial aid you are eligible to receive.
Cost of Attendance
Each college sets a figure known as the Cost of Attendance. Direct costs such as tuition, fees, books, as well as room and board make up the Cost of Attendance. It also includes other indirect costs such as transportation and other personal expenses. Colleges and universities have varying Costs of Attendance, but your EFC remains the same, regardless of where you go.
Financial aid offices use the formula below to establish your financial need. This determines if you qualify for grants and other financial aid programs.
Cost of Attendance – Expected Family Contribution = Financial Need
The lower your EFC, the greater the likelihood that you’ll qualify for need-based financial aid.
Remember that your EFC stays the same no matter what school you attend. The name Expected Family Contribution might sound like you have to directly contribute or pay that amount. But, it’s just a part of the formula that determines your financial aid eligibility. There are other financial aid sources that can be used to fully fund your college education such as unsubsidized Direct Loans, PLUS loans, private loans, and other aid programs not based on financial need. It’s best to exhaust all sources of grants and scholarships before borrowing for college. You can use a free search at Peterson’s to find available scholarship opportunities. You can also visit the U.S. Department of Education’s Federal Student Aid website to learn more about the EFC, FAFSA, and other financial aid programs.