Loans Student Loans Financial Aid Understanding the Expected Family Contribution (EFC) The Expected Family Contribution Can Determine Financial Aid Eligibility By Jodi Okun Jodi Okun Facebook Twitter Jodi Okun is an expert on college financial aid and student loans—a subject she mastered over the course of 10 years as a financial aid consultant at Occidental College and Pitzer College, as well as other institutions. Now, as the founder of College Financial Aid Advisors, she helps thousands of families navigate the college financial aid process, covering everything from financial aid from grants to student loans. She has written about the financial aid process and student loans for The Balance. learn about our editorial policies Updated on September 29, 2022 Reviewed by Andy Smith Fact checked by Sarah Fisher Fact checked by Sarah Fisher Sarah Fisher is an associate editor at The Balance with two years of personal finance and business writing experience. She has written about personal finance for SmartAsset, and has held internships at the Consumer Financial Protection Bureau and Senator Kirsten Gillibrand's office. learn about our editorial policies In This Article View All In This Article EFC Overview Need-Based Aid vs. Non-Need-Based Aid How COA Affects Financial Aid Changes in Expected Family Contribution Independent Students Frequently Asked Questions (FAQs) Photo: Tom Werner / Getty Images After you submit the Free Application for Federal Student Aid (FAFSA), you'll receive an Expected Financial Contribution number (EFC). This number helps your college and the government determine your eligibility for certain types of financial aid. Key Takeaways The higher your EFC is, the less likely you are to be eligible for financial aid.The EFC for dependent students is affected by their parents' income and assets.Your EFC can change every year. EFC Overview Your EFC is calculated using a formula set by Congress using the financial information you give on your FASFA application, including income, assets, benefits, family size, and the number of family members in college. To help determine your financial need, colleges subtract your EFC from their estimated cost of attendance (COA). Note Beginning in July 2023, FAFSA applications will phase out the EFC and replace it with a simplified Student Aid Index (SAI) that takes effect for the 2023-24 financial aid award year. The SAI uses a slightly different calculation method from the EFC, but is essentially a name change to reflect a student's eligibility, not how much a family is willing to contribute to their child's education. Need-Based Aid vs. Non-Need-Based Aid You can receive need-based financial aid if your family meets certain eligibility criteria, but that amount cannot exceed your financial need. This relates to your eligibility for federal student aid programs such as Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), subsidized loans through the William D. Ford Federal Direct Loan Program, and the Federal Work-Study (FWS) program. Non-need-based financial aid is not based on your EFC. Even if you are not eligible for subsidized loans or financial aid, you may still be eligible for other federal programs, including Federal Direct Unsubsidized Student Loans, Federal PLUS Loans, and the Teacher Education Assistance for College and Higher Education (TEACH) Grant. Colleges may also be able to grant merit-based financial aid or athletic scholarships for students based on their high school accomplishments. You can also search for private scholarships on your own. How COA Affects Financial Aid Your financial need is your college's COA - your EFC. If your EFC is 4,000 and your college's COA is 4,000, you would not be eligible for any need-based financial aid. On the other hand, if your EFC is 4,000 and your college's COA is 10,000, you might be eligible for up to 6,000 in need-based financial aid. That means your financial need can be completely different at two different colleges. Some families have an EFC of zero, which may qualify them for the maximum amount of assistance, but even some higher-income families find that they qualify for some forms of financial aid, depending on the specific university. Changes in Expected Family Contribution Your family will be required to complete a FAFSA every year a student is in college and requesting financial assistance. That means your EFC can change each year. If you had to use your savings to cover college costs for the student’s freshman year, that might reduce your EFC for the next year. You may have gotten a raise and increased your EFC. Having another child begin college will also reduce your EFC. Independent Students The EFC calculation for an independent student doesn't take into account parental financial information like the EFC calculation for a dependent student does, so a student's dependency status must be determined before the EFC is calculated. A student must meet one or more of several qualifying requirements for independent status laid out by the federal government. A student may be independent if they are: 24 or olderMarried or separated but not divorcedIn the military or a veteranHomelessGoing to begin working on their graduate degree EFCs for independent students are based on their own assets and financial information. Frequently Asked Questions (FAQs) Why is my EFC number so high? Your EFC number is more likely to be high if your income and assets are high. Your EFC number is also affected by how many family members are in college. Your retirement savings and the value of your home will not affect your EFC number. What does an EFC of 4000 mean? Your EFC is a dollar amount. If your EFC was 4,000 and your college costs are estimated to be only $4,000, you would not be eligible for any need-based aid. Your EFC is one factor that determines how much federal aid you are eligible for, although it is not necessarily how much you will receive. Your financial need and the amount of federal aid you are eligible for is determined by subtracting your EFC from your estimated college costs. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. U.S. Department of Education, Federal Student Aid. "Wondering How the Amount of Your Federal Aid Is Determined?" National Association of Student Financial Aid Administrators (NASFAA). "Q&A on Changes to Federal Student Aid Policy Included in Consolidated Appropriations Act, 2021." U.S. Department of Education, Federal Student Aid. "Wondering How the Amount of Your Federal Student Aid is Determined?" Federal Student Aid. "How to Complete the FAFSA® Form When You Have Multiple Children." U.S. Department of Education, Federal Student Aid. "For the Purposes of Applying for Federal Student Aid, What's the Difference Between a Dependent Student and Independent Student?"