The EFC or Expected Family Contribution number is the amount a college will use in estimating a student’s financial need. In order to get an EFC or Expected Family Contribution a family would need to complete a FAFSA form. Now is the time of the year when parents are compiling their financial information in order to complete the FAFSA form or Free Application for Federal Student Aid. Figuring out the terminology of the different aspects of the college financial aid process can be confusing. One area clients often discuss with me is the difference between the FAFSA form and the CSS Profile form.
The FAFSA process is also called the federal methodology. Any college or postsecondary education program that receives federal funds will require the student and family to submit a FAFSA form. This form has to be completed in order for the student to qualify for any federal financial aid. The exception to this rule is merit aid, which can be granted without any financial aid forms submitted.
Some colleges require a second financial aid process called the institutional method. The most common of these methods is the CSS Profile managed by College Board. Generally, colleges that use a secondary process have a significant endowment that they are trying to distribute to their targeted applicants. The institutional methods will ask additional question beyond the FAFSA, and there is often a fee to use these methods.
The institutional methods are also used by schools that offer early decisions. The FAFSA process is not available until October 1 of each year, so students who apply for early decision and need financial aid will need to use an institutional method. Each school is different with the form they required and the deadlines they use. Parents and students should review the financial aid process and forms required on their list. Being organized and meeting the school’s deadlines helps the application process go more smoothly.
One of the biggest differences between the federal and institutional methodologies is how the colleges recognize the EFC numbers. The federal methodology value will be a fixed and the same number at every school. The institutional method value will vary from college to college based on how each school develops their calculation. Most schools will not disclose your institutional number to you. This is due to the secrecy and marketing strategies the more competitive colleges use to attract the best students. For a more detailed explanation of the admission matrix go to Chapter 2 of our book titled, “Financial Aid and Beyond: Secrets to College Affordability”.
There is a great deal of confusion between the two methods. An important part of creating your funding strategy is determining your college list. If the colleges on your list do not include a CSS Profile school, you will not need to worry about completing the additional forms.
In general, the more competitive colleges use an institutional process. Over the past few years, the difference between the two methodologies has lessened. Listed in the table below are the major calculation differences between the federal and institutional methods.
Expected Family Contribution Method Comparison
|General Calculation||Same number for all colleges||Variable by college|
|Home Equity||Not included||Most colleges include a %|
|Retirement Accounts||Not included||May include as a %|
|Family business with lessthan 100 employees||Not included||Included|
|Non-custodial parent||Not included||Included|
|Calculation Allowances||Standard||Variable by college|
|Student Contributions||Could be 0 value||Minimum expected|
To get both the FAFAS form and the CSS Profile form in on the date listed by your selected college. It is often a good idea to fill the form out and then wait a day to relook at the information you inputted. Making mistakes as simple as spelling a name wrong or transposing a number can cause a delay in the application process
Over the years the Department of Education years has tried to simplify the FAFSA process by reducing and consolidating fields. This consolidation of fields requires families to understand the specific line details of their tax returns and other investment information needed to complete the FAFSA form. EFC Plus software simplifies this process by providing an input method that consolidates the financial information correctly.
Remember your EFC number is just one part of the paying for college puzzle. Other college costs saving ideas include educational tax credits, college saving plans and selecting the best financing options.
On our EFC PLUS website, we offer a free estimating EFC Calculator. It is a simple version that reduces the number of input and will give you an estimate of the both EFC methods. Click on form to get the link.
Good luck in your process!