If you have a high EFC, it means the federal government thinks your family will be able to cover a bigger portion of your cost of higher education — especially if your EFC is more than the cost of the college your student is attending. In those cases, the government assumes your family can afford all the costs of college.
Why is my EFC so high?
SO FAR THE BANK HAS ARGUED INFLATION IS TEMPORARY: One big reason is high oil and gas prices. Another is logjams that have arisen as supply chains struggle to cope with the sudden rebound of the global economy from the coronavirus pandemic. And both those should fade with time.
What is the highest EFC number possible?
Zero is the lowest EFC number; 99,999 is the highest. If a dependent students' family's income is less than $24,000 and government assistance was needed for that filing year, the EFC will automatically be zero. A zero means a family has no ability to contribute to the student's education.
How to lower my EFC?
Step 2 Lower EFC Guide
- Assessable and Non-Assessable Assets | Income including the treatment of Home Equity/Small Business Interests.
- Additions and Deductions from Financial Aid Income
- Untaxed Income and Benefits; certain tax deductions become additions to financial aid income.
- What are EFC Allowances and how they benefit you?
What is considered a good EFC from FAFSA?
- Retirement savings — 401 (k) & 403 (b) plans, IRAs & Roth IRAs, pensions, profit-sharing plans, and more
- Equity in your primary residence
- Existing debt, including student loan debt
- Value of family businesses with fewer than 100 full-time employees
- Value of life insurance policies
What is considered a high EFC FAFSA?
Once your FAFSA form is received, the schools arrive at a number between 0 and 4617 that will result in a federal student aid grant for the following academic year. Any person with an EFC number at 0 will receive the maximum amount of student aid, while a number over 5273 will result in no aid at all.
What does an EFC of 50000 mean?
Expected Family ContributionCost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need. For example, if the total COA (Tuition & Fees, Room and Board, Books, Supplies, etc) at a particular school was $50,000, and the family's EFC from the FAFSA was $30,000, they would have $20,000 of financial need.
What does an EFC of $14000 mean?
So, if a school's COA is $42,000 and the student's EFC is $28,000, the calculated financial need is $14,000. While your Expected Family Contribution will not impact non-need-based awards (like merit scholarships), the need-based aid you receive won't exceed your EFC.
Is an EFC of 20000 high?
The reality is that families with an EFC of $20,000 or more will be expected to pay the equivalent to the tuition at a state school. What is this? The table shows some families would qualify for some aid based on an average total cost of $28,000 for public universities.
Is an EFC of 10000 good?
In a perfect world, all schools would meet 100% of a family's financial need. So, if your EFC was $10,000 - no matter where you attend - you would know you wouldn't pay more than $10,000 each year. Unfortunately, this is simply not the case. Most schools do not meet 100% of financial need for all of their students.
What does an EFC of $20000 mean?
If you have an EFC of $20,000, the college meets 70% of financial need, this leaves you with 30% of unmet need (Example, total cost $40,000 less EFC equals financial need of $20,000 times 30% unmet need $6,000. So your theoretical out of pocket costs would be your EFC $20,000 plus unmet need of $6,000 equals $26,000.
What does EFC of 30000 mean?
This means low-income students will often be eligible for more financial aid. For example: Say your EFC is $15,000 and your school's cost of attendance is $40,000. With this EFC, your calculated financial need would be $25,000. But if you had a higher EFC of $30,000, your financial need would be only $10,000.
What does an EFC of 8000 mean?
For example, if your EFC is $8,000, and the college costs $15,000 to attend, you may be eligible for $7,000 worth of aid. On the other hand, if college A costs $6,000, you may not be offered financial aid (from college A), since FAFSA indicates you can pay that much out of your own pocket.
What does an EFC of 12000 mean?
For example, 12000 is $12,000. This means that the federal government (and colleges) expect your family to be able to reasonably contribute $12,000 per year towards your college expenses. That said, the EFC number is not the definitive amount your family must pay for school. Rather, the number is a starting point.
What does an EFC of 9000 mean?
If you attend three-quarter time (9-11 credits), you generally receive seventy-five percent as much COMA. Students in the EFC range of 5577 to 9000 will receive $0 COMA if enrolled half-time (6-8 credits). Students with a bachelor's degree are also eligible for COMA.
What does EFC of 5500 mean?
$3,500 subsidized loan limit ($5,500 total federal loan limit) $3,500 subsidized loan limit ($9,500 total federal loan limit) Second-Year Undergraduate Student. $4,500 subsidized loan limit ($6,500 total federal loan limit) $4,500 subsidized loan limit ($10,500 total federal loan limit)
What is the average EFC for FAFSA?
The overall average EFC is about $10,000, with an average of about $6,000 for students at community colleges and $14,000 at 4-year colleges. Slightly more than half of students have an EFC of $2,500 or less. Slightly more than 10% have an EFC greater than $25,000.
What is EFC in college?
The EFC, or Expected Family Contribution, is a measure of your family’s ability to pay for college based on what you entered into your Free Application for Federal Student Aid ( FAFSA ). It’s a measure that many (though not all) colleges use to determine their financial aid offers for students. The higher your EFC, the more ...
What is the EFC formula?
The EFC formula takes into account both parents’ incomes and the student’s income, with higher-income families expected to contribute more to their student’s education. The formula does NOT ask for the incomes of other household members, and does increase if the student in question has a higher income. Edmit.
What does it mean if your EFC is too high?
No wonder many families are caught off guard by an EFC they believe to be too high–this could indicate that colleges will be less generous when making financial aid offers to their students.
Why is the EFC formula lower?
A higher allowance results in a lower EFC, because it is deducted from your income in the formula .
What is the reason for high EFC?
Note that all metrics and estimates are for the 2019-2020 school year. 1. Your household income is high. For most students, a high household income will be the reason for a high EFC. EFC increases as the family’s household income increases , holding all other factors constant. For a student who is the first in their family ...
Why is EFC lower in college?
The more members of a household that are attending college, the lower each college student’s expected EFC. This mostly occurs because, with more children attending college, the less their parents are expected to contribute to each individual student.
What are excluded assets on FAFSA?
Excluded assets include the family’s home (provided you live in it) and retirement savings like a 40 1k. Parents that withdraw from their 401k to pay for a student’s education are in fact increasing their EFC, because that withdrawal is counted as untaxed income on the FAFSA.
What Does a High EFC Mean?
Your EFC is the amount of money the government thinks your family can afford to put toward a student’s college education for that year. So if you have an EFC of $15,000, the government expects that your family can pay for that much of the college bill this year.
What to do if you use DRT for retirement?
As Dawn found out, if you do use DRT and it mishandles your retirement rollover, you’ll need to contact the financial aid office for each school for which your student is submitting FAFSA and explain your situation.
How to avoid sticker shock?
One of the best ways to avoid sticker shock is to estimate your family’s EFC before senior year.
What does EFC mean for middle income families?
For many middle-income families, this can mean the loss of need-based financial aid. With more assets being “counted” as “proof” that a family can afford to shoulder more college costs, EFC is going up for many people.
What does it mean when your EFC is high?
If you have a high EFC, it means the feds think your family will be able to cover a bigger portion of your cost of a higher education —especially if your EFC is more than the cost of the college your student is attending. In those cases, the government assumes your family can afford all the costs of college.
How much is joint asset protection for 2020-2021?
For the 2019-20 year, a 45-year-old (married) parent will only see $11,100 in joint assets shielded and for the current 2020-2021 year the joint asset protection amount has dropped to just $5500.
Why is there an allowance for EFC?
There is an allowance designed to shield some parent assets from inclusion in the calculations, helping reduce your EFC.
How does the EFC work on FAFSA?
The FAFSA website has a threshold question that allows the asset questions to be skipped when the student seems eligible for the simplified formula or an automatic zero EFC. But in some instances, such as when using a paper FAFSA form, a student who qualifies for the simplified formula will provide asset information. In those cases the CPS will calculate two EFCs: one using the assets and one excluding them. The EFC from the simplified formula (which excludes assets) is called the primary EFC and is printed on the front of the student’s SAR, while the EFC from the full calculation is called the secondary EFC and is printed in the FAA Information section. To determine the student’s federal aid, the school must use the primary EFC, which will always be less than or equal to the secondary EFC. If it turns out that the student was not eligible for the simplified formula and did not provide asset information, the school must correct and submit the record and use the EFC reported on the resulting transaction.
How is EFC calculated?
The EFC for a dependent student is calculated using the FAFSA data for the student and his or her parents. The CPS calculates the parents’ contribution (which includes their assets), the student’s contribution from income, and the student’s contribution from assets; the EFC is the sum of these three.
How to determine EFC for 2021?
The student’s EFC is determined by adding the student and spouse’s contribution from available income to their contribution from assets and then dividing the sum by the number in college in 2021-2022, as reported on the FAFSA form.
What are the EFC formulas for dependent students?
The law (see HEA Sec. 474–479) gives three regular EFC formulas: one each for dependent students, independent students without dependents other than a spouse, and independent students with dependents other than a spouse (Formulas A, B, and C respectively).
What is the EFC formula?
The EFC formula uses many variables, including income, assets, the number of persons in the household, and the number of those attending college for the award year. Every year the Department publishes updated tables used in the EFC calculation. The 2021-2022 updates can be found in the June 5, 2020, Federal Register.
How is EFC determined?
The student’s EFC is determined by adding the parents’ contribution, the student’s contribution from available income, and his or her contribution from assets. If the student qualified for the simplified formula, his or her contribution from assets is not counted, and the parents’ contribution is determined without using their assets.
What is negative AAI?
To recognize that a student’s income may be needed to help support the family, the EFC calculation allows a parent’s negative adjusted available income (AAI) to reduce a dependent student’s contribution from income.
What happens to EFC when a son graduates?
When the son graduates, however, the family’s EFC will rise again so it makes sense for the girl to look for schools that would also give her merit aid, which she can hold onto no matter what her EFC is.
How much would EFC drop with two kids?
If both children attended schools that just use the FAFSA, The EFC for each child would drop by half. So if the previous EFC was $48,000 for her son, with two in school the EFC for each child would be $24,000.
Can you believe how high your EFC is?
They can’t believe how high their EFC is. Your EFC can provide a decent idea of what a college will assume you could pay for one year of college. If you aren’t sure what an EFC is, here are some of my previous college blog posts on the subject:
Who is Lynn O'Shaughnessy?
Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller and a workbook, Shrinking the Cost of College: 152 Ways to Cut the Cost of a Bachelor’s Degree. Follow her on Twitter.
How Is the Expected Family Contribution Used?
The EFC is subtracted from the college’s cost of attendance to calculate financial need and determine the student‘s eligibility for need based aid. Examples of federal need-based financial aid include:
What is the difference between CSS and FAFSA?
There are several important differences between the FAFSA and CSS Profile. The CSS Profile generally yields a higher EFC than the FAFSA, which leads to less financial aid from the college. After you file the FAFSA, you can find your EFC on the Student Aid Report (SAR).
How is parent contribution on FAFSA divided?
The parent contribution on the FAFSA is divided by the number of children in college. Increasing the number of children in college from one to two is almost like dividing the parent income in half. The CSS Profile is less generous, reducing the parent contribution by 40% instead of 50% for two children in college, 55% instead of 67% for three children in college and 65% instead of 75% for four children in college.
What is the EFC on the FAFSA 2021?
After you file the Free Application for Federal Student Aid (FAFSA), you’ll receive a Student Aid Report (SAR) that includes the expected family contribution (EFC) on the top right. The EFC is an index of the family’s ability to pay for college.
What happens if you have a lower EFC?
A lower EFC will yield more federal financial aid. The less financial aid . you get, the more you will have to cover with savings or student loans. Eligibility for the Federal Pell Grant depends only on the EFC. Applicants whose EFC is less than 90% of the maximum Federal Pell Grant will receive a Federal Pell Grant.
How many colleges use CSS?
About 200 colleges use a supplemental form, the CSS Profile, to calculate a different EFC for awarding their own financial aid funds. Colleges may also use their own institutional methodology when determining a financial aid award. Contact the college’s financial aid office for more information.
What is a parent asset?
Parent Assets. A portion of parent assets are sheltered, based on the age of the older parent. Assets may also be sheltered by the Simplified Needs Test. The FAFSA excludes certain assets, such as retirement plans, net home equity of the family home and small businesses owned and controlled by the family.
How is financial need determined?
A student’s financial need is determined on a school-by-school basis by subtracting the student’s EFC from the school’s Cost of Attendance (COA):
How to figure out how much you will pay for college?
To estimate how much you’ll really pay at a given college, crunch your numbers in the school’s net price calculator. ( By law, colleges and universities are required to post these calculators to their websites.) Find your school’s calculator on its admission page, or do a quick search with your school’s name and “net price calculator.”
What percentage of student assets are unprotected?
20% of students’ unprotected assets. When you’re thinking about saving for college, remember this: If a 529 plan is owned by a dependent student or his/her parent, the balance held is considered a parental asset. Plans owned by independent students are evaluated at a higher rate, as they’re considered student assets.
What is the Federal Methodology?
The Federal Methodology is what’s used to determine your eligibility for federal aid. Some private schools and award programs, however, establish eligibility for their own aid programs with the Institutional Methodology. Determine your student’s status.
What is expected family contribution?
Your Expected Family Contribution (EFC) is a figure that sets the parameters for your college search and weighs heavily on how much your family will truly pay for college. It is a dollar figure that represents the amount of money the federal government thinks a student and parents should be able to contribute toward the coming year of a college education.
How many students receive financial aid?
According to the National Center of Education Statistics, 85% of students receive some form of financial aid, but the amount of assistance depends on one very important number: the Expected Family Contribution.
Where is EFC sent?
In addition, your EFC is sent to all the schools you list on your FAFSA. The federal government uses three main formulas to calculate your Expected Family Contribution, depending on your filing category: Dependent student. Independent student with non-spouse dependents.
What does 5225 mean on FAFSA?
For example, if you fill out the FAFSA and your EFC is 5225, that means you’ll be expected to pay $5,225 of your tuition out of pocket. The FAFSA will look at your school’s cost of attendance to then determine your financial aid eligibility. If your school costs $60,000 a semester, they’ll subtract your EFC from the COA to determine how much aid is ...
What is EFC financial aid?
Need-based financial aid refers to grants, subsidized federal loans, and work-study programs that are reserved for low-income students.
What to do if your financial situation has changed since you filled out your FAFSA?
If a financial situation has changed since you filled out your FAFSA, or you do not feel your EFC considers certain financial burdens, you should reach out to your school’s financial aid department for assistance. Special circumstances can be considered when granting aid through your school.
How does FAFSA work?
The FAFSA will require you to fill out how much income your family (if you are a dependent) makes to determine how much your family (and you) can afford to pay toward your college education. It will analyze your parents’ or guardians’ previous year’s tax returns to determine financial eligibility for student aid. If you are over the age of 24 or emancipated, only your tax returns will be used to determine your financial eligibility.
What is EFC in college?
Your expected family contribution (EFC) plays a large part in determining how much and what type of financial aid you can receive.
How is non need based financial aid calculated?
Instead, this number is calculated by looking at how much financial aid you’ve already been awarded and subtracting that from your COA.
What is the maximum amount of FSEOG?
The maximum amount of aid awarded through the FSEOG for the 2020-2021 school year is $4,000. There is a certain amount of money reserved for FSEOGs each year, and once the money runs out, no more FSEOGs are awarded. It’s important to apply early to receive a better chance of receiving this grant.
Are you ready to find your fit?
Many college students graduate with student loan debt. Learners can reduce the amount they owe by taking advantage of financial aid. According to EducationData.org, 86% of students receive some financial aid. Still, more than $2 billion in student aid grants go unclaimed each year.
What is Expected Family Contribution?
The EFC indicates how much students and their families can afford to pay for education each year. This index appears as a six-digit number in the top right corner of the SAR. The section below explains the EFC calculation system.
How is Income Treated on the FAFSA?
This methodology uses the FAFSA to gather tax return and self-reported income information from the previous two years. The FAFSA asks for both student and parent income information for dependent students. Married students must report spousal income.
Does Paying Off Debt Lower Your EFC on FAFSA?
The FAFSA ignores most consumer debt. Raising or lowering this kind of debt does not influence the EFC. Students should pay off consumer debt with reportable assets, such as bank accounts. This is because lower reportable assets reduce EFC.
How is a Distribution from a ROTH IRA Treated for FAFSA?
Students must report Roth IRA distributions as income on their FAFSA. This includes tax-free return of contributions. The distribution amount may count as untaxed income or as part of AGI. Roth IRA distributions can increase EFC and reduce need-based financial aid eligibility. When possible, learners should wait to make IRA withdrawals until after applying for aid.
What is EFC in financial aid?
College financial aid offices use the EFC to estimate how much financial aid the school will offer to enrollees. Students with low EFC receive the most student aid. Learners with high EFC receive less aid. Applicants with family incomes below $26,000 qualify for an automatic zero EFC and maximum federal funding.
What is the FAFSA deduction?
The FAFSA draws on income earned from work or adjusted gross income (AGI) from tax returns. The FAFSA excludes certain income types from reporting and deducts them from the AGI. These include taxable portions of scholarships, need-based financial aid, or combat pay.
What information does the FAFSA use?
Remember, too, that the FAFSA uses information from your base income year (e.g., two years’ prior to when the FAFSA is submitted).
What does Edmit offer?
Edmit offers smart personal advice for you on how to make the college decision.
How to start financial aid?
Regardless of your family’s income, first things first: Start the financial aid process by filling out the FAFSA, as well as the CSS Profile. These provide the baseline financial information for your student that each school will then use for need-based financial aid packages.
Is FAFSA worth it?
And while no one loves paperwork (especially year after year ), the time investment to complete and submit the FAFSA may be worth it.
Does FAFSA use your income?
Remember, too, that the FAFSA uses information from your base income year (e.g., two years’ prior to when the FAFSA is submitted). So if your income has varied during that period, that will impact your financial aid award eligibility. Keep this in mind as you start the college research and application process with your student.
Is SoFi a covered institution?
A covered educational institution's name or logo on the Edmit platform is not an endorsement by the covered educational institution of SoFi's student loan products. Student loan products offered by "SoFi" are made by SoFi Lending Corp. (CFL# 6054612, NMLS# 1121636) and not by any covered educational institution displayed on the Edmit platform.
Does Edmit receive compensation from SoFi?
Edmit may receive compensation from SoFi on a per-funded loan basis. SoFi does not guarantee the accuracy of information provided by Edmit, its affiliates or subsidiaries. Enrollment in Edmit does not guarantee eligibility for a SoFi loan product. Terms and conditions apply, and are subject to change.