This is the second post out of the series of posts discussing the FAFSA and your EFC as a family. We introduced each term in the previous post. That post included defining each and explaining how they tie together . We also explained the financial aid equation and the ultra important role it plays. We will now focus more on the EFC and how it is calculated with the EFC Calculator.
Once again, your Expected Family Contribution (EFC) relates to your family and what the federal government and ultimately the schools feel is the MINIMUM amount you can pay out of your own pocket as a family towards tuition. Some people get confused when they hear “paying out of your own pocket”. They think you literally have to have that amount available in either an investment fund or your checking account etc. This is not the case, if you have the funds available to pay your EFC by withdrawing money from a savings account or 529 plan etc then that’s great but if you don’t then you’re going to have to borrow the money.
Simplistically your EFC is basically the amount of money that you need to come up with as a family to pay for one year of school. How you do so is totally at your discretion as a family. But the money will not be coming from Uncle Sam, the State or your School.
So now you know what EFC means, how it fits into the conversation of paying for college and why it is such an important variable of the financial aid equation. The next step is to understand how the number is calculated. This is where the EFC Calculator comes into play.
The below video gives a great explanation of exactly how the federal government calculates your EFC as a family.