What Does Expected Family Contribution Mean?

Expected family contribution (EFC) is the amount of money that a student's family is expected to contribute to college costs for one year. Financial need is calculated as the difference between the cost of attending school and the expected family contribution. The EFC considers family income, assets, size of current household, and the number of family members currently enrolled in college.

Thanks to the 2021 Consolidated Appropriations Act, beginning in July 2023 the term "student aid index" (SAI) will replace EFC on all FAFSA forms. In addition to some changes in the way the SAI is calculated, the change attempts to clarify what this figure actually is—an eligibility index for student aid, not a reflection of what a family can or will pay for postsecondary expenses.

Understanding Expected Family Contribution (EFC)

Generally, the lower the EFC, the higher the financial need, and therefore, the greater the eligibility for federally-sponsored financial aid programs such as Pell Grants, Perkins and Stafford Loans, and Federal Work-Study Programs. Families must submit a free application for federal student aid (FAFSA); following this application, the family will receive a student aid report (SAR) that includes the official EFC value.

This information is also sent to any schools that the student listed on the FAFSA, whereupon the school's financial aid office will prepare a financial aid package and financial award letter, informing the student and family of the amount of any expected financial aid in terms of grants and loans.

It is worth noting that some colleges consider the value of your home as an asset when calculating a student's expected family contribution. FAFSA does not use home values in its calculations but when a college or a university offers its own financial aid or need-based loans, it may count the home value in its calculations. EFC amounts may differ depending on the educational institution.