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After giving hundreds of college funding workshops in schools around the country and online, one of the most frequent questions that parents ask is some version of the following: “In basic terms, can you explain all this EFC stuff?”

It’s a simple question that should have a simple answer.

Per the FAFSA website, the EFC (Expected Family Contribution) is a determination of your family’s financial strength and is calculated according to a formula established by law. It considers your income, assets, benefits, and family size among other factors. Unfortunately, the formula does NOT take the family’s debt and liabilities into account.

Your Expected Family Contribution is NOT the amount you will pay for college. 

How Do You Interpret This Number?

As the FAFSA website states, “Your EFC is not the amount of money your family will have to pay for college nor is it the amount of federal student aid you will receive. It is a number used by your school to calculate the amount of federal student aid you are eligible to receive.”

When mom and dad (or in some cases the student) fill out the FAFSA form, they’ll receive something called a SAR, which stands for Student Aid Report.  This SAR report will disclose the EFC number for that student. In some cases, the federal government or a specific school will ask that you go through a verification process first.

The EFC is only the first step in calculating the true cost of college for your child. The Cost of Attendance (COA) minus the student’s EFC equals the student’s financial aid eligibility.

For example, if the EFC for the student is $20,000, and the COA for the college is $45,000, then the math is

$45,000 (COA) – $20,000 (EFC) = $25,000 of financial aid eligibility.

It is crucial to understand that this $25,000 is not necessarily what the student will receive in aid. Instead, it represents the number for which the student is eligible. Just because you’re eligible for something doesn’t mean you’re going to get it.

Two important things to note here:

  1. Some schools will meet more of your need than others. This is where you need to do your research.
  2. Even if your EFC is on the higher side, private colleges with higher sticker prices may give you institutional aid.

All of this may seem nonsensical, but if you have the patience to piece it together you can save thousands of dollars.

Adding More Mumbo to the Jumbo – Why Your EFC Can Be Misleading

Remember, different schools will cover varying amounts of your financial need, and each school’s breakdown of financial aid will be different as well. Some schools will give much more Gift Aid, which is money you do NOT need to pay back, and some schools will give more Self-Help Aid, which is money in the form of loans and work-study that you have to pay back.

In the example above, the student—we’ll call him Johnny—qualifies for $25,000 of financial need from his top school. What if the school only meets 45% of Johnny’s financial need? That means the school will only give him $11,250 of the $25,000 for which he is eligible.  As a result, Johnny and his family must come up with $13,750 in addition to his EFC of $20,000 to pay for college every year.

Let’s take this a step further. The school will give Johnny $11,250 of financial aid, but what if 55% of this aid is in student loans which must be paid back?  That is $6,187 in loans (plus interest) in addition to the EFC of $20,000 (remember this is the estimate of what his family “should” be able to pay out of pocket) AND the $13,250 that the school will not cover. Add these all together, and his out-of-pocket cost will be close to $41,000 per year.

EFC As a Double-Edged Sword

Things are not all bad. If you think you will qualify for need-based aid, research colleges that meet all or most of your need.

Whether or not you think you will qualify for need-based aid, focus on schools that give generous merit aid,  apply for outside scholarships, and develop a financial gameplan with a trusted expert to save and pay for college with efficient money.

Our college funding coaches are here to help in this regard. If you’d like to explore working with a professional to help guide you through the process, consider reaching out to us for a free consultation!

Schedule a Free Consultation

Finding Your EFC as a Launching Point

Finding your EFC early on is a good starting point for your college funding journey. Though it is an estimate, it will provide you with a rough picture to work with, a path to tread down.

Once you’ve established a tentative EFC,  you can begin to target affordable schools, set a baseline number that you will contribute, and choose which financial vehicles or strategies are best suited for your situation. Whether your student is in the 1st grade or 11th grade, estimate that EFC, and then start planning accordingly.

This is probably the only thing regarding the EFC “mumbo jumbo” that truly makes sense.

Calculate Your EFC


Demetrius Doss







Related Reading:

Why Do I Have Two Different EFC Numbers?

College Planning Alphabet Soup – FAFSA, CSS, EFC, COA


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