What Is EFC?

by Phillip Guthrie

Perhaps one of the most common questions about the Pell Grant has to do with the EFC. Once you know the fundamentals of the EFC, and how it is applied in regard to the Pell Grant it really is not that confusing to understand, and the important thing that you need to keep in mind is that the EFC is the way the Department of Education evaluates your financial need for federal aid. The EFC, or expected family contribution, is supposed to act as a clear indicator of the amount of money your parents are able to contribute towards your college education, the lower it is, the more likely you are to receive need-based federal aid such as the Pell Grant.

EFC is determined via a formula that includes such factors as your parents’ income (and assets if you’re a dependent), your income (and assets if you’re an independent), the size of your family, and the number of family members that are currently attending university, or postsecondary institutions. Other factors that are taken into consideration are whether or not your parents’ income taxes have been paid for the previous year, whether or not they both work, and their age. This information is provided when you fill out your FAFSA, and upon completion the EFC is calculated and revealed from within your SAR, or Student Aid Report.

Once your SAR is generated upon completion of your FAFSA you should immediately take a look to see what your EFC is. If it is lower than 4,617 you should be able to become eligible for the Pell Grant as long as you were able to satisfy the other Pell Grant requirements that are relevant to qualifying for the Pell. EFC also plays a critical role in determining the actual Pell Grant amount you are able to receive once you become eligible to receive the Pell Grant. In combination with the cost of attendance of your school, and your enrollment status, EFC plays the largest role in calculating the amount you are eligible to receive by way of the Pell Grant, with a lower EFC resulting in a higher amount.

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