Calculating Your EFC

In my last blog, I talked about why it’s important to know what your EFC or Expected Family Contribution is. Here is the post:

What Is Your EFC?

Today, I’m going to show you how you can get a preliminary EFC, which is not as hard as you might think. You just need to use an online EFC calculator. Here are two popular ones:

College Board’s EFC Calculator

FinAid’s EFC Calculator

For those who don’t want to paw through their old tax returns, FinAid also has a Quick EFC Calculator.

Here is the sort of information that you will need to use the EFC calculators:

  • Number of people in household
  • Marital status of parents.
  • Age of children.
  • Number of children in college.
  • Adjusted gross income for most recent calendar year.
  • Income taxes paid for most recent calendar year.
  • Non-retirement investments.
  • Business equity.

The EFC calculators use two different methodologies — federal and institutional. About 270 private colleges use the institutional methodology, which means students applying to these schools will have to fill out the CSS/Financial Aid PROFILE. The schools using the institutional methodology are going to ask more financial questions.

Here are some examples of Expected Family Contributions that I  generated using the Quick EFC Calculator:

Family No. 1:

  • Oldest parent 55
  • Number in household: 4
  • Number of children in college: 1
  • Student income: $2,000
  • Parent income: $120,000
  • Parent taxable (not retirement) assets:  $60,000

EFC: $24,028.

If the school cost around $24,000 or less, the family would receive zero need-based financial aid. On the other hand, if the college cost more than that, there is a chance the student would receive need-based aid.

If  the child will be attending a college that costs costs $52,000, the teenager could be eligible for up to $28,000 in financial aid.

Family No. 2:

The figures are identical for the second family except that there will be two children in college at the same time. Having two children in school will cut the EFC in about half.

New EFC: $12,634 for each child.

Family No. 3:

Here’s one more example of a family with much higher income and assets:

  • Oldest parent 55
  • Number in household: 4
  • Number of children in college: 1
  • Student income: $3,000
  • Parent income: $200,000
  • Parent taxable (not retirement) assets:  $125,000

EFC: $52,803

With such a high EFC, this family would want to look for schools that award merit aid (non-need-based aid) for wealthy students. Luckily for this family, most colleges and universities give merit scholarships to theses students.

Lynn O’Shaughnessy is the author of The College Solution and she also writes a college blog for CBSMoneyWatch.com and US News & World Report. Follow her on Twitter.

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  1. I have a daughter with a FAFSA EFC is 74K. She got accepted in a private school A where yearly expenses are 65K.
    I have a son and his FAFSA says 74K. He is in out of state public school B. His yearly expenses are 50K. So based on this the actual EFC stays at 74K or comes down to 37K? My daughter got rejected for any need based financial aid. Have not heard back from son’s school B. Is 74K calculated based on both the kids being in college? or it is my total EFC that I can afford for both kids. (which is less than combined expenses of my son and daughter). Please comment

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  2. Here is where working with an informed financial planner can pay off. for example, how do you define “net home equity” in 2010? A lot has changed in Real Estate. Also, do you have opportunities to defer that high income? How? Is it safe? How can I access it when I need it? Last, consider changing those taxable investment accounts into non-taxable or “non” accessed assets for purposes of the EFC. Lots of effective strategies – you just need to find the right/informed advisor. And by the way, 529 plans although an effective tool are NOT the only solution.

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    1. Hi Betty,

      Thanks for your thoughts on this complicated topic. Those are all important questions that you raised.

      Hope all is well in Minnesota.

      Lynn O’Shaughnessy

      Reply