What is the Expected Family Contribution (EFC)?

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Mark Kantrowitz

By Mark Kantrowitz

March 20, 2024

Note: Beginning with the 2024-2025 school year FAFSA, which opened in December 2023, the Student Aid Index (SAI) will replace the expected family contribution (EFC). The SAI will be listed on your FAFSA Submission Summary, replacing the Student Aid Report (SAR).

This article focuses on the Expected Family Contribution (EFC) for the 2023-24 FAFSA. EFC will no longer be used after the 2023-24 FAFSA deadline passes on June 30, 2024.

For the 2023-24 FAFSA, after you file the Free Application for Federal Student Aid (FAFSA), you’ll receive a SAR that includes the EFC on the top right. The EFC is an index of the family’s ability to pay for college and will help determine how much financial aid you are eligible for.

What is an EFC?

The EFC, or Expected Family Contribution, is a figure determined through your FAFSA financial aid application, CSS profile, or other financial aid applications. Colleges use it to work out how much financial aid you’re eligible for. It’s the amount you’re expected to pay to cover your college costs, including tuition, books, supplies, accommodation, transport, and other study expenses.

This dollar figure represents a measurement of your family’s financial strength. In simple terms, your EFC is how much the federal government believes that your family can afford to contribute towards college costs.

However, it’s important to note that your EFC is not the exact amount that you’ll need to pay for college. It’s a baseline that can be used to work out your financial need, but you may end up paying significantly more (or less) than this figure.

What Does My EFC Number Mean?

The EFC is a mysterious six-digit number that may include leading zeros. Technically speaking, this figure can be anything from zero upwards, as there is no maximum EFC. You may also wonder why your EFC is 6 digits.

This number is, in fact, a dollar figure: for example, if your estimated Expected Family Contribution (EFC) is 000040, this means your family is expected to pay $40 for the coming year for all the expenses associated with your college education.

A higher EFC means that your family has more substantial income and assets, and therefore can afford to pay more for college. On the other hand, a lower EFC represents that your family cannot afford to pay as much, and therefore you have a greater need for financial aid.

Parents are often shocked at how high the EFC is. But, despite the name, most families will pay more for college than the expected family contribution because of gapping, minimum student contributions, and student loans.

The overall average EFC is about $10,000, with an average of about $6,000 for students at community colleges and $14,000 at 4-year colleges. Slightly more than half of students have an EFC of $2,500 or less. Slightly more than 10% have an EFC greater than $25,000.

How Is the Expected Family Contribution Used?

The key purpose of the FAFSA and EFC is for colleges to determine your eligibility for financial aid. Your financial need will be calculated using the cost of attendance (COA) of that particular college less your EFC: that is, how much college will cost you, less what your family can afford to pay. The difference between the two represents your financial need, and therefore your eligibility for need-based aid.

Although you won’t necessarily receive the exact amount of financial aid that matches the figure representing your financial need, colleges use your estimated expected family contribution as a starting point to work out your financial aid package.

In simple terms, a lower EFC will mean you receive more federal financial aid. The less financial aid you get, the more you will have to cover from your savings or through student loans.

Examples of federal need-based financial aid include:

The EFC is also the single factor that determines whether you’re eligible for the Federal Pell Grant. Applicants whose EFC is less than 90% of the maximum Federal Pell Grant will receive a Federal Pell Grant. Applicants with a zero EFC will receive the maximum Federal Pell Grant. The average EFC among Federal Pell Grant recipients is about $700.

Eligibility for other types of financial aid depends on financial need, which is the difference between the college’s cost of attendance and the EFC.

Financial need increases with decreases in the EFC and increases in the cost of attendance.

How Is the Expected Family Contribution Calculated?

Your EFC is calculated based on information reported on the Free Application for Federal Student Aid (FAFSA). About 200 colleges use a supplemental form, the CSS Profile, to calculate a different EFC for awarding their own financial aid funds. Colleges may also use their own institutional EFC methodology when determining a financial aid award. Contact the college’s financial aid office for more information.

Students must report the following on the FAFSA:

  • Income and assets of the student
  • Income and assets of the student’s parents
  • Household size
  • Number of children in college
  • Age of the older parent

If the student is classified as independent, their assessment will be based on their spouse’s financial status, rather than their parents’ financial information.

The EFC formula considers the following assets that you, your parents and/or your spouse own:

  • Taxable income, including not only salaries, but also interest, capital gains and dividends, from two years ago
  • Benefits, such as unemployment and Social Security
  • Balances of all bank accounts
  • Balances of 529 plans and Coverdell Education Savings Accounts (ESAs)
  • Non-retirement account value, including UTMA and UGMA accounts
  • Tax allowances
  • Contributions to retirement accounts
  • Contributions to Flexible Spending Accounts and Health Savings Accounts
  • Trust fund values
  • Amount of equity in investment real estate and businesses (in some cases)
  • Number of children in the family who will attend college in the upcoming school year

These assets will be ignored by the EFC formula:

  • Retirement savings, including 401(k) and 403(b) plans, IRAs and Roth IRAs, profit-sharing plans, and pensions
  • Real estate equity in your primary residence
  • Value of personal possessions such as vehicles, art, jewelry, and electronics
  • Value of the family business if it has fewer than 100 full-time employees
  • Qualified withdrawals from the student’s own Coverdell ESA or 529 plan, or such a plan owned by a dependent of the student’s parents
  • Life insurance policies
  • Any existing debt

Certain assets are weighted differently. Generally speaking, income has the most influence on your FAFSA expected family contribution.

How assets are weighted can also depend on whether you’re considered a dependent or independent student. For example, 529 plans owned by independent students are considered student assets and evaluated at a higher rate than those held by a dependent student or their parents. You may also qualify for the simplified EFC formula, which overlooks financial assets entirely.

There are several important differences between the FAFSA and CSS Profile. The CSS Profile generally yields a higher EFC than the FAFSA, meaning less financial aid may be available from the college.

After you file your FAFSA, you’ll find your EFC on the Student Aid Report (SAR).

FAFSA Questions and EFC

The financial aid formulas behind the student’s EFC are complicated and are updated annually. This table summarizes the impact of the primary financial and demographic questions on the EFC.

Impact on the EFC
Parent Income
Allowances for taxes and basic living expenses are subtracted from total parent income to yield available income. The allowance for living expenses is based on household size and the number of children in college. Available income is assessed on a bracketed scale that runs from 22% to 47% of available income.
Student Income
Allowances for taxes and a student income protection allowance are subtracted from total student income, yielding the student’s available income. The student income protection allowance is about $7,000. The EFC will include 50% of the student’s available income.
Parent Assets
A portion of parent assets are sheltered, based on the age of the older parent. Assets may also be sheltered by the Simplified Needs Test. The FAFSA excludes certain assets, such as retirement plans, net home equity of the family home and small businesses owned and controlled by the family. The remaining assets are assessed on a bracketed scale which ranges up to 5.64% on the FAFSA and 5% on the CSS Profile.
Student Assets
Student assets are assessed at a flat rate of 20% on the FAFSA and 25% on the CSS Profile, with no asset protection allowance.
Number in College
The parent contribution on the FAFSA is divided by the number of children in college. Increasing the number of children in college from one to two is almost like dividing the parent income in half. The CSS Profile is less generous, reducing the parent contribution by 40% instead of 50% for two children in college, 55% instead of 67% for three children in college and 65% instead of 75% for four children in college.

How to Calculate Your EFC

You may want to estimate your EFC before you complete the FAFSA. Knowing your estimated expected family contribution and how much you will need to pay out of pocket will help you decide if you need to take out a student loan.

You can use our financial aid EFC calculator to estimate your EFC and financial need. You can also use a college’s net price calculator to get a personalized estimate of how much you’ll have to pay after the college’s cost of attendance is discounted by grants and scholarships. This will help determine the overall cost of your college education for the coming year.

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Upcoming Changes to the EFC

Congress passed the Free Application for Federal Student Aid Simplification Act on December 27, 2020, to make the system fairer and easier to navigate. The first reforms will take effect on July 1, 2023, as part of a phased implementation that will see all of the changes implemented by the 2024-2025 school year.

One notable change is that the term EFC will be replaced by “Student Aid Index.” Other significant changes will include:

  • The FAFSA will be reduced from 108 questions to a maximum of 36.
  • The new formula will not divide the parent contribution by the number of children in college.
  • The parent and student income allowances will increase.
  • Students will not have to report certain types of untaxed income, including cash from grandparents, on the FAFSA.
  • More students will be eligible to receive the federal Pell Grant.
  • Parents who claim a student on their tax return should file the FAFSA (regardless of who the child lives with).
  • It may be easier for some families to appeal federal financial aid.

Under the new legislation, the EFC will essentially be replaced by the Student Aid Index (SAI). The Student Aid Index is a formula for calculating student financial need that is virtually the same as the EFC. The one major distinction is that, while the EFC can only go to zero, the SAI can be as low as -$1500, allowing needy students to receive more financial aid.

The main reason for the change from EFC and SAI is to make the EFC number’s meaning more clear. The term “expected financial contribution” and EFC meaning can be misleading, as students and families may think this is the amount they’re liable to pay to cover their studies. Beyond this, the SAI is designed to make it easier for students with high financial need to pay for their studies.

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