Tag Archives: EFC Calculator

EFC Calculator

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.

EFC Defined

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.

FAFSA EFC Calculator

This will be the first blog post in a series of blog posts discussing the FAFSA and your EFC. Now if you just read that sentence and thought “what the heck is FAFSA and EFC” trust me you’re not alone. But don’t despair as we will be thoroughly explaining both. In this series of posts we will focus on the FAFSA EFC calculator. In this post specifically though we will explain the important connection between the FAFSA and EFC.

To start, let’s define what each acronym stands for; FAFSA stands for Free Application for Federal Student Aid. EFC is defined as Expected Family Contribution. These are extremely important terms when discussing the student debt crisis in particular when talking about college financial aid. The FAFSA is the form that every school receives no matter if it’s a public or private institution. The form determines how much federal aid a family is eligible to receive.

It’s important to understand that just because a family is eligible to receive aid does not mean that they will. It all depends on the individual school and their financial aid philosophy as far as how much need they meet. What the FAFSA will produce though is an extremely important number known as your EFC. This is where the FAFSA EFC calculator comes into play. As you will see in the below video your EFC literally pops up on the screen once you hit the submit button on the FAFSA form.

Your EFC is vitally important for two reasons. First, it represents the MINIMUM not the MAXIMUM amount of money the government expects your family can pay for college. This is a very important distinction. The EFC is based on your family structure and finances which you inputted electronically on the FAFSA. 

Financial Aid Equation

Second, it’s the most important variable of the financial aid equation. Below is the financial aid equation;


The below video goes into detail about what this equation means. As you can see the EFC is the middle variable and the one you subtract from the cost of attendance. This result will tell the federal government and ultimately the schools themselves how much money you “need” as a family. Common sense tells you that the lower the EFC the higher the need amount which is a positive for you.

In addition, out of the three variables that make up the all important financial aid equation, the EFC is the only variable that you have some control over. This is because it partially reflects your family’s financial situation as far as assets you own and income you report on federal tax returns. It is no exaggeration to say that the financial aid equation is by far the most important piece of information you need to be aware of. As well as your EFC as we have discussed.

No matter what state you live in, no matter what school you plan on attending, the entire conversation regarding college financial aid starts with this equation.

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