How to Calculate Financial Aid Using the EFC
The EFC, or expected family contribution, is an estimation of how much money a student's family will be able to contribute to his/her college education. The amount of financial aid received---from the federal government and from individual institutions---is partially determined on EFC.
EFC is calculated based on a family's income as well as size, geographic location and number of members currently enrolled in college. The EFC is then subtracted from the school tuition cost. The difference represents the student's financial need, and financial aid is awarded based on this amount. A student can use online tools to find an unofficial estimate of his EFC.
Other People Are Reading
Things You'll Need
- • Online EFC Calculator
- • Student's and parent's or guardian's financial figures for past year
Instructions
-
Calculation
-
1
Find an EFC calculator online.
-
2
Calculate student's net assets by adding student's cash, savings and checking balances with any real estate, business or farm he or she owns. Subtract any real estate or other investment debt, business debt, and farm debts from the first total. Enter this amount in the online calculator.
-
-
3
Calculate student's pre-tax earned income, pre-tax unearned income and U.S. taxes paid. Enter this information along with information about student's dependence status, state of residence, family size and number of people in college in student's family.
-
4
Repeat steps two and three with parent or guardian information. Information about parent(s) or guardian(s) income, age and state of residence is required.
-
5
Calculate EFC by clicking "Continue" or "Finish" depending on which website's calculator you use.
-
1
Tips & Warnings
Dependent students should enter $0 for student's net assets and parent's net assets if they meet the following two requirements: (1) Student's parents or guardians were not required to file an IRS Form 1040 OR student's parents or guardians were not required to file any income tax; and (2) Student was not required to file an IRS Form 1040 or a tax return.
Independent students should enter $0 for student and parent net assets if they meet the following two requirements: (1) The student and his spouse were not required to file an IRS Form 1040, OR the student was not required to file a tax return; and (2) If the student is a tax filer, the student and his spouse's combined income from the 1040A or 1040EZ was $49,999 or less; OR, if the student is a non-tax filer, the income entered on student and his spouse's W-2 plus earnings not listed on the W-2 was $49,999 or less.
Online calculators only offer an estimate of a student's EFC. Official calculations may differ from what you find on your own. These are performed by the Department of Education and are based on information the student provides in his FAFSA (Free Application for Federal Student Aid) form, which can also be filled out online.
References
- Photo Credit calculator with coins #3 image by Adam Borkowski from Fotolia.com
