Loans Student Loans Financial Aid How the FAFSA Expected Family Contribution Affects Eligibility for Financial Aid By Ken Clark Ken Clark Ken Clark is a former Certified Financial Planner (CFP) with over a decade of experience working in the financial planning industry. He is an expert on student loans, financial aid, and paying for college, and has also authored six personal finance books. Ken is a licensed family therapist specializing in money conflict among couples. learn about our editorial policies Updated on April 27, 2022 Reviewed by Cierra Murry Reviewed by Cierra Murry Cierra Murry is an expert in banking, credit cards, investing, loans, mortgages, and real estate. She is a banking consultant, loan signing agent, and arbitrator with more than 15 years of experience in financial analysis, underwriting, loan documentation, loan review, banking compliance, and credit risk management. learn about our financial review board Fact checked by Hans Jasperson Fact checked by Hans Jasperson Hans Jasperson has over a decade of experience in public policy research, with an emphasis on workforce development, education, and economic justice. His research has been shared with members of the U.S. Congress, federal agencies, and policymakers in several states. learn about our editorial policies Share Tweet Pin Email In This Article View All In This Article What Is the EFC? EFC's Role in Financial Aid Changes to Family Finances Can You Lower Your EFC? Photo: FatCamera / Getty Images Completing the Free Application for Federal Student Aid (FAFSA) is an essential first step in preparing for college and paying for your education. The FAFSA takes many factors into account, including your income and your family's income, family size, and how many siblings you have in college. From this information, the FAFSA estimates your Expected Family Contribution (EFC), which is the amount the federal government expects you and your family to pay toward your education. What Is the Expected Family Contribution (EFC)? When you complete the FAFSA, the Federal Student Aid Office sends you a Student Aid Report (SAR) with basic info about your application, including your EFC. The EFC is determined by a formula designed by Congress and is an estimate of how much you and your family are able to contribute toward your education expenses, based on information from the FAFSA. It is the maximum expected contribution, not necessarily what you actually must or will pay. Colleges use the EFC to determine students’ need for aid. Your EFC amount is subtracted from your cost of attendance, which includes tuition, room and board, and other necessary expenses. Any costs not covered by your EFC may increase your eligibility for need-based aid. EFC's Role in Financial Aid Depending on the ratio between your school's cost of attendance and your EFC, you may be eligible for federal need-based aid. Federal Pell Grants, which you do not pay back, and subsidized student loans are common types of need-based federal aid. The federal government pays the interest on subsidized student loans under certain conditions, including when you’re in school at least half-time. Note Your EFC is also commonly used by state or local student aid programs, or colleges themselves, to determine eligibility for need-based aid they offer. As a result, filing a FAFSA may be a requirement to be eligible for these types of aid. If your EFC is high, you may not qualify for need-based aid, but you still could receive other forms of loans, like unsubsidized loans. Colleges may also grant athletic or academic scholarships that are based on your skills and accomplishments. These types of merit-based aid do not typically take your EFC or financial need into account. While many people think they make too much money for aid, it's still important to complete the FAFSA. Many families with higher incomes may qualify for some form of financial assistance. Changes to Family Finances The EFC can change drastically from year to year. For example, if your family experiences financial hardship, such as a job loss, or if a sibling enters college while you're in school, your EFC may go down. If your family's financial situation improves, your EFC may go up, too. Note Your EFC is based on financial information in the tax return from two years prior to the start of the school year for which you're requesting aid. The 2021-22 FAFSA, for example, uses tax information from 2019, while the 2022-23 FAFSA uses tax information from 2020. Because your financial situation can vary, you need to renew your FAFSA (and get a new SAR and EFC) for each year you plan to attend school. Can You Lower Your EFC? Many people may think that they can change their EFC and get more need-based aid by leaving out a few extra points on the FAFSA or omitting information. However, it’s never wise (or legal) to falsify or omit information on the FAFSA—so don’t. One way to potentially lower your EFC is to be declared an independent student, though this requires meeting certain criteria. By removing a parent’s income and assets, it could substantially decrease the EFC and qualify you for more aid. But even if you’re a dependent, you still can have your EFC adjusted. A lot may change in your family’s financial situation between the tax year reported on the FAFSA and the time that the school year actually starts. Note In some cases, financial aid administrators may have the discretion to adjust or amend your FAFSA information, and potentially your EFC. This process is called a professional judgment and is typically reserved for unusual circumstances with proper documentation. Your financial aid office can help you complete the student aid appeals process, or help you find other sources of student aid for which you may be eligible. 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. Federal Student Aid. "How Aid Is Calculated." Federal Student Aid. "Subsidized and Unsubsidized Loans." Federal Student Aid. "Finding and Applying for Scholarships." Federal Student Aid. "7 Things You Need Before Filling Out the 2022-23 FAFSA Form." Federal Student Aid. "How to Renew Your FAFSA Application." Federal Student Aid. "Student Fraud." Federal Student Aid. "Special Circumstances." Federal Student Aid. "What Is Professional Judgment?"