How Is FAFSA Calculated?
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What is FAFSA?
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FAFSA (Free Application for Federal Student Aid) is an application process used by the Department of Education to determine how much federal aid a student is eligible to receive. The form is available at any college campus, or can be filled out online at Fafsa.gov.
FAFSA and the EFC
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Federal student aid is determined by a series of factors that the Department of Education calls an EFC (Estimated Family Contribution). Once the EFC has been calculated, a dollar figure is assigned to the student and that dollar figure will be the student's estimated contribution to his or her tuition.
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What Determines EFC?
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The Estimated Family Contribution dollar figure is derived by a series of calculations, such as a student's independent status, family size, income level, estimated college cost/attendance and whether that student has any dependents.
Student Status and income are key factors in calculating aid. Like the IRS calculating how much a taxpayer owes based on salary, the Department of Education figures out how much financial need a student has based upon how much income is earned. As such, students with the lowest level incomes will be qualified for the maximum allowance of financial assistance.
A dependent student (categorized as single, non-military, under 24, with living parents or without dependent children) must use their parents' income in order to properly calculate student aid. An independent student need only use their own income when calculating aid.
Student Status and income are the single most important factors when determining the Estimated Family Contribution.
Other EFC Considerations
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Students with dependent children will receive allowances to deduct from their Estimated Family Contribution. The more dependents a student has, the higher the deduction they will receive.
Students who are expecting to attend full-time will bear higher tuition costs, and this plays a role in determining the EFC. Part-time students will receive less financial aid than a full-time student.
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References
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