There are several three letter words, acronyms and former acronyms that play major parts in the College Search.  SAT, ACT, MOM and DAD are just a few that we’ve touched on in past blog posts.

I’ve got one more for you.  And, for many,  it can be as influential – and as mysterious – as the SAT or the ACT.  (And as the MOM and the DAD)

I’m talking about EFC, or Expected Family Contribution.

The EFC is a number that quietly sits on the top right of that Student Aid Report generated by all of the “stuff” that you provide on the Free Application for Federal Student Aid, also known affectionately as the FAFSA.   But, as quietly as it might sit, it is the number that is used to directly determine a student’s Pell Grant award, his or her subsidized loan eligibility, many state grants and the limit of aid that can be provided from a college and third party sources.

So, what is this EFC?  Well, as I stated before, it is meant to represent a family’s “expected family contribution” to a student’s college education.

Expected by whom?

This expectation belongs to the feds, not you (who will probably expect to contribute much less) nor the colleges (who will probably expect you to contribute more).

I had the pleasure of manually calculating EFCs when I went through Financial Aid Training (see “One Night in Plattsburgh“).  When you calculate an EFC (Expected Family Contribution) manually, it actually makes sense.  For a second.

The EFC calculation formula is what I like to call “equally unfair”.  The logic is there, but it assumes you live in the 1970′s and don’t own a 2nd flat screen TV, 3 laptops or multiple cars.  It is based on real numbers and real calculations, but it assumes a rate of savings that no longer exists in America.

So, why not change it?

Well, it wouldn’t produce more money, it would just show – for most families at most colleges – how much more of a gap there is between your financial aid package and the cost of the college.  So, unless the feds find more money, the colleges find more money or you find more money, changing the formula wouldn’t really accomplish much.

Here are a few points to ponder regarding the EFC and the College Search.

  • The EFC is NOT what you have to pay.  It’s the amount of money a College has to play with if they give you a dime of need-based aid.  (Unsubsidized loans notwithstanding)
  • Home equity – for a primary residence – is NOT part of the equation in the EFC calculation.  Owning a million dollar home doesn’t hurt you and owing a two million dollar mortgage doesn’t help you.
  • EFCs run from 0 to 99.999.  In case you are wondering.  Or setting goals.
  • Federal Pell Grants are determined directly via the EFC.  The highest EFC, in 2010-2011, that was still eligible for Pell was 5273.
  • Student money (income and assets) and Parent money (income and assets) is not weighted equally.  A much higher percentage of student money is expected to be set aside for college.
  • There has been rapid growth recently in a pocket industry that I will label “EFC Prep”.  It is financial consulting designed to enable families to best arrange their assets for maximum benefit in the FAFSA/EFC process.  5 years ago, I would have told you to stay far, far away from such resources because – generally – the only ones making money in such a relationship were the financial folks.  I have since had the opportunity to speak to a few services that do it right.  I would still be EXTREMELY careful in ‘vetting’ such a service, but there are some good ones.  The problem, even with these services, is that the best time to meet with them is about 3-5 years before you decide to.  The later you try to effectively manage your money, the more likely your best options have passed you by.

So, Mr. Szarek, how does this all fit in to Brad’s College Search?

The EFC lays the framework for what aid colleges can provide to you.  So, its effect is obvious.  But it pushes its weight around fairly late in the College Planning Game.  The FAFSA is not completed until mid-year of senior year (for traditional students).  Your financial aid packages follow after that.

So, my advice is this – keep your options open as you go through your college search.  Do not rule out a school because of their ‘sticker price’ or because of what you think your EFC may be.  Like so much of the college search, let the process play out, take good notes and only cut bait when it is appropriate to do so.

As always, I welcome your comments and questions.  Please feel free to email me at, call or text me at 908-403-3819, join me on Facebook on “College Counseling for the Rest of Usand join me on Twitter at @MichaelCCR.