1 / 25

Understanding Financial Aid: How Expected Family Contribution (EFC) is Determined

This document provides a comprehensive overview of the Federal Methodology (FM) system used to calculate the Expected Family Contribution (EFC) for financial aid eligibility. It outlines the two-step process that assesses a family's financial strength and measures their ability to contribute towards educational costs. The determination of EFC is detailed through three distinct models for dependent and independent students, along with various factors that influence the EFC number. It also breaks down the components of parent and student contributions.

more
Download Presentation

Understanding Financial Aid: How Expected Family Contribution (EFC) is Determined

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. Financial Aid 101 Need Analysis June 2009

    2. 2 Federal Methodology (FM) System used to calculate expected family contribution (EFC) Assesses ability to pay Consists of two steps: Measures a family’s financial strength Assesses a part of family’s financial resources as being available to contribute toward educational costs

    3. 3 How is EFC Determined? Three FM models Dependent student Independent student without dependents other than a spouse Independent student with dependents other than a spouse Three distinct FM formulas Regular Simplified Automatic zero

    4. 4 Factors that affect EFC Number in Household Number in College Taxed and Untaxed Income Taxes paid Assets and Investments Age of the Older Parent Number of Wage Earners

    5. 5 EFC Components Parents’ Contribution (PC) consisting of: Contribution from parents’ available income (AI) Contribution from parents’ assets Student’s Contribution (SC) consisting of: Contribution from student’s available income (AI) Contribution from student’s assets

    6. 6 Treatment of Income in FM Total Income: Base year income from all taxable and untaxable sources - Excludable income (i.e., education credits, child support paid, taxable earnings from FWS or other need-based work programs, as listed on FAFSA Worksheet C) = Total Income

More Related