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What’s the FAFSA® Expected Family Contribution (EFC) formula?


    When you submit your Free Application for Federal Student Aid (FAFSA®), your Expected Family Contribution (EFC) plays a significant role in determining your eligibility for financial aid.

    In this article, we’re going to lay out the three formulas used to calculate EFC.

    Of note, the EFC is transitioning to the Student Aid Index (SAI), a new methodology for calculating students’ eligibility for federal student aid, beginning with the 2024-25 FAFSA®. This change is the result of the FAFSA® Simplification Act, which has been passed into law and amended. The U.S. Department of Education has announced it’ll provide guidelines on the SAI at a later date. For now, students and their families should still familiarize themselves with EFC.

    What’s the Expected Family Contribution (EFC)?

    EFC is a measure of your family’s ability to contribute financially to your college education and is determined by using a formula established by law. Your family’s taxed and untaxed income, assets, and benefits are all considered in the formula. It also considers your family size and the number of family members who’ll be attending college during the year.

    EFC is a number that helps the colleges you get accepted to determine your financial need. The schools you include on your FAFSA® will use your EFC to determine your federal student aid eligibility and financial aid award.

    Remember that your EFC isn’t the amount of money your family will have to pay for college. It’s also doesn’t guarantee a certain amount of aid. Instead, it’s a number used by schools to calculate the amount of federal student aid, if any, you’re eligible to receive.

    Entering your family’s income on the FAFSA® may be one of the most complicated steps in the process. Several variables will need to be provided, all of which help determine your EFC. Three different formulas are used for the FAFSA®, each with a simplified version available to those who qualify.

    Formula A

    Formula A is used for dependent students. This means that you don’t qualify as an independent student, and you may be the dependent of parents or guardians who declare you as such on their tax forms. For the 2023-24 school year, several things can automatically bump you out of Formula A status, making you an independent student, including:

    • You were born before 2000
    • You’re married or separated but not divorced
    • You’re a U.S. Armed Forces veteran or on active duty
    • You’re entering grad school or a doctorate program
    • You have children
    • You’re an emancipated minor
    • You’ve been determined to be homeless or self-supporting and at risk of homelessness

    If you have dependent student status, the Formula A worksheet will be used, and you’ll be required to enter information such as your parent’s gross income, untaxed income, benefits (such as disability or social security), and other financial resources. If applicable, the form will then ask you to provide for tax allowances against this income and expense allowances based on one or two-parent families and how many of your parents are employed.

    If your parents’ combined income is $29,000 or less when you file the FAFSA® for the 2023-24 academic year, you may qualify for a zero EFC. Along with that income requirement being the case, your parent must be a dislocated worker, anyone included in your parents’ household size (as defined on the FAFSA® form) must’ve received benefits during 2021 or 2022 from any of the designated federal benefit programs, or have filed certain tax forms or weren’t required to file any income tax returns (the specifics of which are documented by the FSA).

    If not, the regular formula may be used where your and your parents’ assets, such as cash, savings, checking accounts, and investments, will be considered in your EFC calculation. If your parents have other college-age dependents, that also gets included.

    Formula B

    Formula B is for independent students without dependents (and a spouse doesn’t count). If this describes you, some of the information used to calculate your EFC for the 2023-24 year includes the income you and your spouse (if you have one) earned in 2021. This includes taxed and untaxed income. If your spouse is also enrolled in college at least half-time, this’ll also be considered.

    As with Formula A, your liquid assets such as cash, savings, and checking accounts, as well as business interests and investments will be part of your EFC calculation when the regular Formula B is used.

    If the combined income of you and your spouse is under $49,999, the simplified Formula B worksheet will be used where your assets and investments, as well as some other information, will be a part of the calculation. Those using the Formula B worksheet can’t qualify for zero EFC.

    Formula C

    This worksheet is similar to Formula B but is intended for independent students with dependents of their own. One significant difference in this version is the ability to qualify for a zero EFC if the combined income of you and your spouse is $29,000 or less, plus the qualifications listed previously.

    Other information to consider

    The criteria used to determine “independent status,” such as those involving homelessness, aren’t set in stone. If you have unusual circumstances that are documented and can be shown to a financial aid administrator, your status may be overridden from dependent to independent. This may help you get additional financial aid.

    Final thoughts

    Filling out the FAFSA® can be tedious, made more so by understanding your EFC. However, the FAFSA® is a critical step to accessing federal student aid, and in most cases, it simply can’t be skipped.