What is the Expected Family Contribution (EFC)?

This article provides historical information about EFC for reference purposes only.

Note: As of July 1, 2024, the Student Aid Index (SAI) replaced the expected family contribution (EFC). The SAI is listed on your FAFSA Submission Summary, which replaced the Student Aid Report (SAR).

This article focuses on the Expected Family Contribution (EFC) that was used through the 2023-24 FAFSA. EFC is no longer used after the 2023-24 FAFSA deadline passed on June 30, 2024.

For the 2023-24 FAFSA, after you filed the Free Application for Federal Student Aid (FAFSA), you received a SAR that included the EFC on the top right. The EFC was an index of the family’s ability to pay for college and helped determine how much financial aid you were eligible for.

What was an EFC?

The EFC, or Expected Family Contribution, was a figure determined through your FAFSA financial aid application, CSS profile, or other financial aid applications. Colleges used it to work out how much financial aid you were eligible for. It was the amount you were expected to pay to cover your college costs, including tuition, books, supplies, accommodation, transport, and other study expenses.

This dollar figure represented a measurement of your family’s financial strength. In simple terms, your EFC was how much the federal government believed that your family could afford to contribute towards college costs.

However, it was important to note that your EFC was not the exact amount that you needed to pay for college. It was a baseline that could be used to work out your financial need, but you may have ended up paying significantly more (or less) than this figure.

What did my EFC number mean?

The EFC was a six-digit number that may have included leading zeros. Technically speaking, this figure could be anything from zero upwards, as there was no maximum EFC.

This number was, in fact, a dollar figure: for example, if your estimated Expected Family Contribution (EFC) was 000040, this meant your family was expected to pay $40 for the coming year for all the expenses associated with your college education.

A higher EFC meant that your family had more substantial income and assets, and therefore could afford to pay more for college. On the other hand, a lower EFC represented that your family could not afford to pay as much, and therefore you had a greater need for financial aid.

Parents were often shocked at how high the EFC was. But, despite the name, most families paid more for college than the expected family contribution because of gapping, minimum student contributions, and student loans.

The overall average EFC was about $10,000, with an average of about $6,000 for students at community colleges and $14,000 at 4-year colleges. Slightly more than half of students had an EFC of $2,500 or less. Slightly more than 10% had an EFC greater than $25,000.

How was the expected family contribution used?

The key purpose of the FAFSA and EFC was for colleges to determine your eligibility for financial aid. Your financial need was calculated using the cost of attendance (COA) of that particular college less your EFC: that is, how much college would cost you, less what your family could afford to pay. The difference between the two represented your financial need, and therefore your eligibility for need-based aid.

Although you didn’t necessarily receive the exact amount of financial aid that matched the figure representing your financial need, colleges used your estimated expected family contribution as a starting point to work out your financial aid package.

In simple terms, a lower EFC meant you received more federal financial aid. The less financial aid you got, the more you had to cover from your savings or through student loans.

Examples of federal need-based financial aid included:

• Subsidized federal student loans
• Unsubsidized federal student loans
• Grants
• Work-study

The EFC was also the single factor that determined whether you were eligible for the Federal Pell Grant. Applicants whose EFC was less than 90% of the maximum Federal Pell Grant received a Federal Pell Grant. Applicants with a zero EFC received the maximum Federal Pell Grant. The average EFC among Federal Pell Grant recipients was about $700.

Eligibility for other types of financial aid depended on financial need, which was the difference between the college’s cost of attendance and the EFC.

Financial need increased with decreases in the EFC and increases in the cost of attendance.

How was the EFC calculated?

Your EFC was calculated based on information reported on the Free Application for Federal Student Aid (FAFSA). About 200 colleges used a supplemental form, the CSS Profile, to calculate a different EFC for awarding their own financial aid funds. Colleges may also have used their own institutional EFC methodology when determining a financial aid award.

Students had to report the following on the FAFSA:

• Income and assets of the student
• Income and assets of the student’s parents
• Household size
• Number of children in college
• Age of the older parent

If the student was classified as independent, their assessment was based on their spouse’s financial status, rather than their parents’ financial information.

The EFC formula considered the following assets that you, your parents and/or your spouse owned:

• Taxable income, including not only salaries, but also interest, capital gains and dividends, from two years ago
• Benefits, such as unemployment and Social Security
• Balances of all bank accounts
• Balances of 529 plans and Coverdell Education Savings Accounts (ESAs)
• Non-retirement account value, including UTMA and UGMA accounts
• Tax allowances
• Contributions to retirement accounts
• Contributions to Flexible Spending Accounts and Health Savings Accounts
• Trust fund values
• Amount of equity in investment real estate and businesses (in some cases)
• Number of children in the family who would attend college in the upcoming school year

These assets were ignored by the EFC formula:

• Retirement savings, including 401(k) and 403(b) plans, IRAs and Roth IRAs, profit-sharing plans, and pensions
• Real estate equity in your primary residence
• Value of personal possessions such as vehicles, art, jewelry, and electronics
• Value of the family business if it had fewer than 100 full-time employees
• Qualified withdrawals from the student’s own Coverdell ESA or 529 plan, or such a plan owned by a dependent of the student’s parents
• Life insurance policies
• Any existing debt

Certain assets were weighted differently. Generally speaking, income had the most influence on your FAFSA expected family contribution.

How assets were weighted could also depend on whether you were considered a dependent or independent student. For example, 529 plans owned by independent students were considered student assets and evaluated at a higher rate than those held by a dependent student or their parents. You may also have qualified for the simplified EFC formula, which overlooked financial assets entirely.

There were several important differences between the FAFSA and CSS Profile. The CSS Profile generally yielded a higher EFC than the FAFSA, meaning less financial aid may have been available from the college.

After you filed your FAFSA, you found your EFC on the Student Aid Report (SAR).

FAFSA questions and EFC

The financial aid formulas behind the student’s EFC were complicated and were updated annually. This table summarizes the impact of the primary financial and demographic questions on the EFC.

How to calculate your EFC

For historical context, you could have estimated your EFC before completing the FAFSA. Knowing your estimated expected family contribution and how much you would need to pay out of pocket helped you decide if you needed to take out a student loan.

You could use our financial aid calculator to estimate your EFC and financial need. You could also use a college’s net price calculator to get a personalized estimate of how much you would have to pay after the college’s cost of attendance was discounted by grants and scholarships.

Note: For current FAFSA applications (2024-2025 and later), use our Student Aid Index (SAI) guide instead.

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EFC was replaced by SAI in 2024

Congress passed the Free Application for Federal Student Aid Simplification Act on December 27, 2020, to make the system fairer and easier to navigate. The reforms took effect on July 1, 2023, as part of a phased implementation, with all changes implemented by the 2024-2025 school year.

One notable change was that the term EFC was replaced by “Student Aid Index.” Other significant changes included:

• The FAFSA was reduced from 108 questions to a maximum of 36.
• The new formula no longer divides the parent contribution by the number of children in college.
• The parent and student income allowances increased.
• Students no longer have to report certain types of untaxed income, including cash from grandparents, on the FAFSA.
• More students are eligible to receive the federal Pell Grant.
• Parents who claim a student on their tax return should file the FAFSA (regardless of who the child lives with).
• It may be easier for some families to appeal federal financial aid.

Under the new legislation, the EFC was replaced by the Student Aid Index (SAI). The Student Aid Index is a formula for calculating student financial need that is similar to the EFC. The major distinction is that, while the EFC could only go to zero, the SAI can be as low as -$1,500, allowing needy students to receive more financial aid.

The main reason for the change from EFC to SAI was to make the number’s meaning clearer. The term “expected family contribution” could be misleading, as students and families may have thought this was the exact amount they were liable to pay to cover their studies. Beyond this, the SAI is designed to make it easier for students with high financial need to pay for their studies.

For current FAFSA information, see our complete guide to the Student Aid Index (SAI).

Key takeaways

• The Expected Family Contribution (EFC) was permanently replaced by the Student Aid Index (SAI) on July 1, 2024, for all FAFSA applications starting with the 2024-2025 school year.
• EFC was a federal formula that determined financial aid eligibility based on family income, assets, household size, and number of children in college.
• A lower EFC meant more financial aid eligibility, while a higher EFC indicated a family could afford to pay more for college.
• The EFC formula assessed parent income at 22-47%, parent assets at up to 5.64%, student income at 50%, and student assets at 20%.
• Most families paid more than their EFC due to gapping, minimum student contributions, and student loans.
• The average EFC was about $10,000, with $6,000 at community colleges and $14,000 at 4-year colleges.
• For current FAFSA information and financial aid calculations, use the Student Aid Index (SAI) instead of EFC.

Frequently asked questions

Is EFC still used for FAFSA?

No, EFC is no longer used for FAFSA. The Expected Family Contribution (EFC) was permanently replaced by the Student Aid Index (SAI) on July 1, 2024. All FAFSA applications for the 2024-2025 school year and later use SAI instead of EFC to determine financial aid eligibility.

What replaced the EFC?

The Student Aid Index (SAI) replaced the Expected Family Contribution (EFC). While similar in purpose, the SAI can be negative (as low as -$1,500), allowing students with the highest financial need to receive more aid. The SAI also uses an updated formula that no longer divides parent contribution by the number of children in college.

What was a good EFC number?

A lower EFC was better for receiving financial aid. An EFC of zero meant you qualified for the maximum Federal Pell Grant and had the highest financial need. An EFC below $2,500 generally meant significant financial aid eligibility, while an EFC above $25,000 typically resulted in limited need-based aid. However, most families paid more than their EFC due to gapping and other factors.

How did 529 plans affect EFC?

529 plans owned by parents or dependent students were counted as parent assets and assessed at up to 5.64% in the EFC calculation. This meant a $10,000 parent-owned 529 plan could increase EFC by up to $564. However, qualified withdrawals from 529 plans were not counted as income on the FAFSA, making them one of the most favorable college savings options for financial aid purposes.

Why was EFC replaced by SAI?

EFC was replaced by SAI to make the financial aid system clearer and fairer. The term “Expected Family Contribution” was misleading because families often thought it was the exact amount they would pay, when it was actually just an index number. The Student Aid Index better reflects its purpose as a measurement tool, and the new formula allows for negative numbers to help students with the highest financial need.

Can I still calculate my old EFC?

While you can use historical EFC calculators for reference, it’s not useful for current financial aid planning. For the 2024-2025 school year and beyond, you should calculate your Student Aid Index (SAI) instead. Use our financial aid calculator or college net price calculators to estimate your current financial aid eligibility.

See also:

• What is the Student Aid Index (SAI)? – Current FAFSA information
• Complete Guide to Financial Aid and the FAFSA
• How to Avoid Common FAFSA Mistakes
• How to Get More Financial Aid for College
• How to Appeal for More Financial Aid for College