2018 Income and EFC Report: Income and Expected Family Contribution--How Do They Relate?

(2019) 2018 Income and EFC Report: Income and Expected Family Contribution--How Do They Relate? College Student Aid Commission

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Abstract

Expected family contributions, or EFC is a measure of one’s ability to pay for college. Based on information that prospective college students provide on the Free Application for Federal Student Aid (FAFSA), the EFC is used in calculating students’ eligibility for federal need-based financial aid as well as, often, state- and institutionally-funded aid. The higher a student’s EFC, the more the student or student’s family may be expected to contribute to the costs of college. In order to calculate an EFC, the FAFSA collects information related to a broad range of individual circumstances, such as whether a student is dependent or independent, whether the student has dependents of his or her own, how many members of the family are attending college, and other considerations. By design, student or family income alone cannot be used to estimate EFC. Rather, the purpose of the EFC is to provide a measure of ability to pay for college based on a more comprehensive range of factors. While the EFC takes into consideration numerous factors in addition to income, the table on the following page provides background on the relationship between income and EFC. It shows the average EFC for various value ranges of Adjusted Gross Income (AGI), as reported by financial aid applicants on their U.S. federal individual income tax returns. The table is based on an analysis of FAFSAs filed by Iowa residents between January 2017 and June 2018. This table cannot be used to estimate any individual family’s EFC. Rather, it is intended to provide only a broad sense of the relationship between family income and expected family contribution (EFC).