The Truth About Your EFC

By Uloop Guest Writer on December 30, 2016

When you complete your Free Application for Federal Student Aid (FAFSA), you’ll be asked to submit tax information so that FAFSA has record of your previous year’s income. For most of you, your parents will also be uploading their financial information. One way this information is used is to determine your Expected Financial Contribution (EFC).

What is the EFC and how is it determined?

The EFC takes your (and probably your parent’s) financial income and uses that information along with some other information you provide in your application to determine how much you and your parents could reasonably be expected to pay for college expenses for that year. Your income information is combined with other factors, such as family size and how many people in your household are in college, and you or your family’s assets, to determine the EFC.

Will it affect my FAFA Award?

In short, yes it can. The total amount of Federal Financial Aid you qualify for is essentially the total cost of attendance for your school, minus the EFC. It’s important to note here, that the total cost of attendance does include more than just tuition. Housing, books, fees, and other necessary expenses are considered as part of the total cost of attendance. So, in most cases, the higher your EFC, the lower your Federal Financial Aid award is likely to be.

If I end up with a high EFC, what does that mean for me?

Most often it does not mean that you will find yourself without enough financial aid to get you through your year. It does mean that a larger portion of that aid is likely to come from unsubsidized loans rather than subsidized loans and grants. Unsubsidized loans are often higher interest than subsidized loans.

What can I do to increase my financial aid?

With regards to the EFC, many students and families find themselves on the cusp, where their income is high enough to affect their financial aid awards but not really high enough that it is easy to pay a large chunk of cash to college each year. There are two ways to attempt to minimize the effect the EFC will have on your overall financial aid.

The first thing is to apply to the FAFSA as early as you possibly can. Remember that much of the financial aid offered is on a first come, first served basis. Be the first in line and you’ll have more chances for financial aid. You can apply in January, so do so.

The second thing to do is to take your financial aid into your own hands. FAFSA is not the only source for financial aid. You can apply to other sources of money with scholarships and grants. Many private scholarships and grants are not income-based. Find scholarships that can help replace what you do not qualify for because of your EFC. It is true that you must report all of your scholarship and grant awards to FAFSA, and that may also reduce your overall aid package. Still, it benefits you in the end to replace some award for a subsidized loan with a grant or scholarship that you don’t have to pay back later.

Ryan Hickey is the Managing Editor of Petersons and EssayEdge and is an expert in many aspects of college, graduate, and professional admissions. A graduate of Yale University, Ryan has worked in various admissions capacities for nearly a decade, including writing test-prep material for the SAT, AP exams, and TOEFL, editing essays and personal statements, and consulting directly with applicants.

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