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What is an Expected Family Contribution for Student Loans?

After you have submitted your completed FAFSA form to the U.S. Department of Education, you will get back a Student Aid Report (SAR) that will contain something called your Expected Family Contribution or EFC. What is that and how does it affect your chances of getting financial aid?

Your EFC is a numeric score or index number that is used by the U.S. Department of Education for loans and colleges to determine how much financial aid you would receive if you were to attend their school. It is not the actual amount of money you must pay, or the amount of aid you will receive.

How Is It Calculated?

It is calculated according to a formula that considers your family's taxed and untaxed income, assets, and benefits (such as unemployment or Social Security). In addition there is your family size and the number of family members who will attend college or career school during the year.

How Is It Used?

Financial aid administrators then subtract the EFC from your cost of attendance (COA) to determine your need for the following federal student financial assistance offered by the U.S. Department of Education (the Department):

  • Federal Pell Grants,
  • Subsidized Stafford Loans through the Direct Loan Program
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Federal Perkins Loans, and
  • Federal Work-Study (FWS)

What is your cost of attendance?

If you're attending at least half-time, it is the estimate of

  • tuition and fees;
  • the cost of room and board (or living expenses for students who do not contract with the school for room and board);
  • the cost of books, supplies, transportation, loan fees, and miscellaneous expenses (including a reasonable amount for the documented cost of a personal computer);
  • an allowance for child care or other dependent care;
  • costs related to a disability; and/or
  • reasonable costs for eligible study-abroad programs.

As you can see, the EFC is an important number and can make a big difference in how much aid you receive from the school or the Department of Education.

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!

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Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.