The Dreaded EFC…

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Most parents we see have no idea what an Expected Family Contribution (EFC) is or how it impacts the financial aid for which they qualify.

Once they see what it means, which typically occurs soon after they meet us, they’re even more depressed!!

And, after they’ve engaged our services and we’ve begun helping them learn the game of admissions and financial aid, they start understanding how the schools regard the EFC and how they can make a more informed, perhaps more affordable, college choice.

The EFC is the minimum amount the schools (and the government) expect the family to pay for a year of college. It’s calculated annually, based on the financial information provided.

Schools subtract the EFC from their published annual cost-of-attendance (COA) to calculate a family’s financial need. This, in turn, determines the amount of aid for which a family qualifies.

To calculate the EFC, the government uses the Federal Methodology (FM) formula. Schools must use the FM result when awarding federal and state aid. Most schools use the FM when determining eligibility for aid from their own resources (e.g., endowment funds).

A group of private schools use the Institutional Methodology (IM) formula when allocating institutional aid. The IM considers a variety of additional factors, such as the value of the family’s home and how much a non-custodial parent is expected to provide toward the cost.

Unfortunately, the EFC will not necessarily be what a family ends up paying for an education. The real cost, or net price, will be the EFC plus any need not covered by the school and any aid received in loans or work-study.

Unmet need will be met from the family’s resources. Loans will need to be repaid.

The true cost of an education includes every dollar you spend out-of-pocket to pay for school, either now or later.

Learn how to pay the least out-of-pocket for the best education available to your student. Learn how to reduce your EFC and increase your family’s eligibility for aid.

Contact our Professional College Planners to schedule your family’s first college planning campaign meeting.

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