What is the Expected Family Contribution (EFC)?

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Mark Kantrowitz

By Mark Kantrowitz

December 17, 2021

After you file the Free Application for Federal Student Aid (FAFSA), you’ll receive a Student Aid Report (SAR) that includes the expected family contribution (EFC) on the top right. The EFC is an index of the family’s ability to pay for college.

What Does My EFC Number Mean?

The EFC is a mysterious six-digit number, that may include leading zeros.

It is a dollar amount that represents a measure of the family’s financial strength. Meaning, the federal government believes that the family can afford to contribute that amount of money toward college costs.

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 EFC is subtracted from the college’s cost of attendance to calculate financial need and determine the student‘s eligibility for need based aid. Examples of federal need-based financial aid include:

  • Subsidized federal student loans
  • Unsubsidized federal student loans
  • Grants
  • Work-study

A lower EFC will yield more federal financial aid. The less financial aid
you get, the more you will have to cover with savings or student loans.

Eligibility for the Federal Pell Grant depends only on the EFC. 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
, 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?

The 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 an independent student, financial information for the
student’s spouse will substitute for the financial information of the student’s parents.

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 the FAFSA, you can 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.

Questions 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. Use our financial aid EFC calculator to estimate of 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 college cost.

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Upcoming Changes to the EFC

FAFSA simplification is scheduled to begin for the 2021-22 award year and continue in phases through 2024-25. One notable change is that the new form will use the term “Student Aid Index” instead of expected family contribution. Other significant changes will include:

  • The new formula will not divide the parent contribution by the number of children in college.
  • The parent and student income allowances will be higher.
  • 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.
  • The parents who claims 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.

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