How is EFC calculated for financial aid?

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How is EFC calculated for financial aid?

EFC Parent Contribution

  1. Add up total annual parent income. Use both taxable and nontaxable income, including any amount put toward retirement that year.
  2. Subtract allowances for federal taxes, state taxes, and Social Security paid.
  3. Subtract an Income Protection Allowance (IPA).
  4. Subtract an Employment Expense Allowance.

What does an EFC of $14 000 mean?

So, if a school’s COA is $42,000 and the student’s EFC is $28,000, the calculated financial need is $14,000. While your Expected Family Contribution will not impact non-need-based awards (like merit scholarships), the need-based aid you receive won’t exceed your EFC.

What does EFC of 25000 mean?

For example, if your cost of attendance is $25,000 and your EFC is $18,000, the college calculates $25,000 – $18,000 = $7,000. This shows that you’re eligible for $7,000 in need-based aid.

How do you calculate EFC 2020?

Dividing the total student’s contribution from adjusted available income by the number in college, as reported on the FAFSA, yields the EFC for the 2020–2021 award year.

What does an EFC of 8000 mean?

For example, if your EFC is $8,000, and the college costs $15,000 to attend, you may be eligible for $7,000 worth of aid. On the other hand, if college A costs $6,000, you may not be offered financial aid (from college A), since FAFSA indicates you can pay that much out of your own pocket.

Is EFC based on adjusted gross income?

Income used to calculate the EFC includes: Adjusted gross income, if tax filers, or total wages. Non-taxable income, contributions to tax-deferred pension and savings plans, IRA deductions, child support, untaxed portions of retirement distributions and other items listed on the financial aid application.

What does an EFC of 20000 mean?

If you have an EFC of $20,000, the college meets 70% of financial need, this leaves you with 30% of unmet need (Example, total cost $40,000 less EFC equals financial need of $20,000 times 30% unmet need $6,000. So your theoretical out of pocket costs would be your EFC $20,000 plus unmet need of $6,000 equals $26,000.