Learning-Center

What is Expected Family Contribution (EFC)?

There is a lot of confusing language (and plenty of acronyms) when it comes to paying for college and financial aid. You may be surprised to know that “expected family contribution” or “EFC” is not necessarily the amount of money your family will actually end up paying your college. So what exactly is the EFC?

When you complete the FAFSA, you enter general and financial information about your household. From there, the U.S. Department of Education calculates your EFC and provides it to the colleges you select on the FAFSA. According to the Department of Education, your EFC is not the amount of money your family will have to pay for college, nor is it the amount of federal student aid you will receive. It is a number used by your school to calculate how much financial aid you are eligible to receive.

So how does it work? Below are the steps in the financial aid process:

The financial aid office determines your cost of attendance (COA). This includes things such as tuition, room and board, books, and other essential needs.
Next, your EFC comes into play. The college subtracts your EFC from your cost of attendance to determine the amount of your financial need. This results in any need-based financial aid awards such as grants, work study, and possibly scholarships. (Typically this is where the “free” money for college ends.)
You will then be eligible for non-need-based aid to help cover gaps left, such as federal student loans. Any remaining balance will need to be covered by your family, and may include seeking out private student loans.

Still unclear?

Let’s add some sample numbers to help. If the college estimates your cost of attendance to be $25,000 for one year, and your household’s EFC is $12,000, there will be $13,000 remaining to be paid. If you’re awarded $3,000 in need-based aid, you will be left with $10,000 to be covered by non-need-based aid (that’s where student loans come in).

Ready to cover the gap and find a private student loan? We can help you find a credit union partner for your lending needs.

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In order to apply for a loan, you must first pick an individual credit union from which you wish to borrow. You can apply for the loan without being a member of the credit union you select, but you will need to become a member of that credit union in order to receive a funded loan. Therefore, it's important that you select a credit union that you will be eligible to join. Credit union membership requirements can include where you live, work, or attend school. Results are based on membership criteria provided by individual credit unions and do not imply a guarantee regarding accuracy or eligibility to join the listed credit union(s).

Calculations are based on the lowest possible rate and available repayment terms per lender. Rate estimates are based on credit information entered by the user and will not impact your credit. During the application process, a hard credit inquiry will be performed to provide exact rate information. Repayment calculations assume immediate full repayment. View the full range of rates and terms by visiting your credit union's website using links listed for each credit union above.

Using the free student loan refinance calculator does not constitute an offer to receive a loan and will not solicit a loan offer. Any payments and savings will depend on the actual amounts for which you are approved, should you choose to apply. This calculator is provided for educational purposes only and should not be relied upon as financial advice. Always consult your credit union or financial advisor when making your decision.

IMPORTANT NOTICE for refinance borrowers: By refinancing federal student loans, you may lose certain borrower benefits from your original loans. These may include interest rate discounts, principal rebates, or some cancellation benefits that can significantly reduce the cost of repaying your loans. Please review this important disclosure for more information.

Your actual rate within the range stated will be disclosed upon approval. Student borrowers may apply with a creditworthy cosigner which may result in a better chance of approval and/or interest rate.