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What’s Expected Family Contribution (EFC)?

Published May 2, 2024| minute read
Hadiya Iqbal

Senior Associate, JPMorgan Chase

    Expected Family Contribution (EFC) is a term used by the Free Application for Federal Student Aid (FAFSA®), although beginning with the 2024-25 FAFSA® it will no longer be utilized. In essence, EFC is a number calculated with the information you provide on the FAFSA® to help determine your need for certain types of financial assistance. Colleges and universities use this number in their calculation to determine how much to award students in aid including grants, scholarships, work-study programs, and federal student loans through the 2023-24 academic year.

    Beginning with the 2024-25 FAFSA® (released in December, 2023), the EFC is transitioning to the Student Aid Index (SAI), a new methodology for calculating students’ eligibility for federal student aid and other types of aid. This change is the result of the FAFSA® Simplification Act.

    While the 2023-24 FAFSA® is still open, it may remain important to understand what EFC means. Likewise, take note of the remaining deadlines in relationship to the 2023-24 FAFSA®:

    • Deadline to file a 2023-24 FAFSA® is June 30, 2024
    • Deadline for 2023-24 FAFSA® corrections is September 14, 2024

    What does EFC stand for?

    When filling out your 2023-24 FAFSA®, you’ll be asked to include information about your financial status. If you’re a dependent student, you may also need to include information about your parent’s financial status and include their tax returns.

    The government will use this financial information to calculate your EFC, which allows colleges to decide how much financial aid you’re eligible to receive, if any.

    If you’re applying to multiple colleges, your aid award letters will likely vary from one college to the next. You might even receive more financial aid from one college and much less from another. That is because the factors colleges use can vary when determining the amount of financial aid to award, such as the college’s cost of attendance.

    How is EFC calculated?

    Your EFC is calculated according to a formula established by law and considers your family’s taxed and untaxed income, assets, and benefits (such as unemployment).

    There are three EFC formulas: one for dependent students, one for independent students without dependents other than a spouse, and one for independent students with dependents other than a spouse.

    There’s also a variant for each of these three EFC formulas. In addition, students may be eligible for automatic zero EFC calculation.

    The simplified formula doesn’t consider assets and liabilities like the regular formula but comes with some additional qualifying factors. Automatic zero EFC is designed for families making less than $29,000 a year and is typically unavailable to independent students.

    Independent students

    Independent students might qualify for the simplified formula depending on a few factors, such as their income. Check the Federal Student Aid Handbook for the latest rules on which independent students qualify for the simplified formula.

    Independent students with a spouse

    Independent students with a spouse need to include their spouse’s financial information on the FAFSA® application. This may impact their EFC.

    Independent students with children

    Though most independent students don’t qualify for automatic zero EFC, students with children are typically eligible. Students with children may put their children down as dependents on the FAFSA®, which may impact their EFC.

    Common FAQs about EFC

    The EFC may feel like a complicated equation to understand. Here are a few frequently asked questions that might help you understand what the EFC is and why it varies so greatly from one student to the next.

    Why’s my EFC so high?

    If you’re a dependent student, your parent's income and assets are likely driving your high EFC. Unfortunately, there’s not much that can be done about this. If you have questions about your financial situation, it’s best to speak with someone in the financial aid office at your school.

    What’s a good EFC number?

    It’s important to remember that your EFC number doesn’t matter as much as how your college interprets it, as they ultimately decide what, if any, financial aid to award you. Colleges may consider things like their official cost of attendance, a family’s financial situation, their unique formula to calculate aid offers, and their policies on providing aid (among other factors) when awarding aid to students.

    What’s considered a high EFC?

    No matter how high you think your EFC will be, it’s recommended that you file the FAFSA® to determine if you’re eligible for federal financial aid. If you have questions about how high your EFC is and what that means for your eligibility for federal financial aid, it’s best to talk to the financial aid office at your college.

    What does 0 EFC mean on FAFSA®?

    Zero is the lowest possible number your EFC can be. If your family makes less than $29,000 a year, you likely fall into the automatic zero category, which means your family isn’t expected to have financial resources to contribute to your education.

    Unfortunately, this doesn’t mean you won’t have to pay anything out of pocket. It’s highly dependent on the school you choose and how much aid they give you. This depends on many factors, including even when you file your FAFSA® because some financial aid is first come, first served. That being said, you’ll generally be more likely than other students to get the most possible aid.

    Final thoughts

    As the EFC is transitioning to the SAI, make sure to also familiarize yourself with the SAI and how it differs from EFC if you plan to file the FAFSA® for the 2024-25 academic year and beyond.