What is an expected family contribution to the FAFSA?
- Your Expected Family Contribution, or EFC, is used to determine the amount of financial aid you receive for school.
- Your CEF is based on the information you provide on the FAFSA about your family’s income and assets.
- Colleges don’t have to meet 100% of your financial needs, so complete the FAFSA ASAP.
- Learn more about Personal Finance Insider student loan coverage here.
The Free Federal Student Aid Application (FAFSA) is a form that determines your eligibility for financial aid. It does this by producing a number called your expected family contribution (EFC).
What is your CFE?
Your CFE is a number that establishes whether you qualify for specific types of federal student aid. The information you fill out about your FAFSA – including your parents’ income, their assets, and information about any other family members attending college that year – determines your CFE.
Above all, your CFE is not the amount of money you will have to pay for college. It is simply a number used by colleges to determine how much assistance you are entitled to.
Learn more about the full formula used to calculate your CFE.
The EFC will be renamed the Student Aid Index in July 2023 and will come into effect for the 2023-24 school year.
What is the impact of your CEF on the help you receive?
Your cost of attendance (COA) is the total cost of college in a given academic year. This number includes tuition, room and board, books, supplies and other miscellaneous expenses.
Your college will subtract your CFE from your COA to determine your financial needs. For example, if your COA is $ 20,000 and your CEF is $ 8,000, your financial needs are $ 12,000. This means that you are eligible for a maximum of $ 12,000 in need-based assistance.
However, colleges do not have to meet 100% of your financial needs. Some programs have limited funds, so it’s in your best interest to file with the FAFSA as soon as you can for the best chance of getting the most aid.
Here are the types of help that are based on your CEF:
- Pell Grants: Given to undergraduates with exceptional financial need who have not yet graduated. You can get between $ 650 and $ 6,495 for the cost of your tuition.
- OFA grants: Available to undergraduate students in financial need, up to a maximum of $ 4,000. Not all schools participate.
- Direct subsidized loans: A federal student loan available to undergraduate students in financial need. The Department of Education will cover your interest charges while you are in school and for a six-month grace period after you graduate. The maximum amount depends on the year of study in which you are.
- Work study: Provides part-time jobs for students with financial need to earn money for academic expenses. Jobs are often on campus, but some are off campus. The government will base your work-study grant on when you apply, your level of financial need, and how much money your school has.
Your eligibility for non-need-based assistance is determined by the COA minus any financial assistance you have received so far, including any additional assistance the school offers you or private scholarships.
Some forms of assistance that do not take your CEF into account include:
- Direct unsubsidized loans: A federal student loan available to all students enrolled at least part-time in an eligible school. Students do not need to demonstrate financial need to be eligible for an unsubsidized loan. Interest will begin to accrue as soon as the loan funds are distributed. The maximum amount depends on the year of study in which you are.
- Direct PLUS Loans: Graduate students, professional students, and parents of undergraduates can take out these federal student loans, which have higher interest rates than direct subsidized and unsubsidized loans. The maximum loan amount you can receive is determined by the COA minus any other financial assistance you or your child receives.
- TEACH grants: Require that you be a full-time teacher for four years in a school or educational service organization that serves low-income students. You can get a grant of up to $ 4,000 per year, but if you don’t complete your service, any TEACH grants you get will be converted into direct unsubsidized loans.
You can contact your school or the federal student aid office to find out more about how your CEF performs in your financial aid package.