The FAFSA4caster is the free EFC or Expected Family Contribution calculator provided by the federal government through the Department of Education. When parents and students start the college planning process they may go to the FAFSA4caster for an initial estimate of their EFC. Knowing the detail s of your EFC is critical to understanding the financial aid process.
It is important to note that the FAFSA4caster is only an estimate and not always as accurate as the full FAFSA submission. FAFSA4caster is a quick and easy tool used by families to get a ballpark number. Due to the lack of detailed financial information, the results of the FAFSA4caster could be misleading depending on the financial situation of the family.
For people who are new to financial aid, the Expected Family Contribution calculation is used to determine how much aid a school can give a student under the federal and most state programs. The EFC number may be used to determine how much grant money a college is willing to give a student. Some college use a second method to calculate an internal number called your Institutional EFC. The FAFSA4Caster does not estimate that number for you. This may be important based on the colleges that are on a student’s list.
A significant FAFSA4caster shortcoming is it does not include contributions to retirement accounts. Many families do not realize that a contribution to deferred contribution accounts such as IRA or 401Ks, are added back in for the Expected Family Contribution number but not for your taxes. This is important to know since it could increase the EFC number and change your financial aid position by thousands of dollars. For the federal method (FAFSA), only the year’s contributions are added into the EFC calculation. The retirement account values are not included in the asset calculation and should not be include as a reported assets. This point is often misunderstood
To help families improve their knowledge of their expected family contribution, the EFC PLUS website has a free Expected Family Contribution (EFC) calculator. This free EFC calculator provides a more accurate estimation since it includes items not asked on the FAFSA4caster site. It also provides an early estimated institutional number that may be helpful.
If you prefer to get a more detailed analysis, consider EFC PLUS software. The EFC PLUS software will provide a detailed estimated of the expected family contribution number. It also calculates an estimated financial aid award analysis by college. You may think that all EFC calculators are the same but on a closer look you will see that the information inputted into the calculations may vary. This is even true with the net price calculators on the college websites. To better analyze the benefits and differences between the FAFSA4caster, our free EFC calculator, and the EFC PLUS tool I have provided a chart with key areas for you to review.
Before you review the chart, I just want to discuss some of the financials inputted into the EFC calculation. The EFC or Expected Family Contribution term can be misleading. You would think it is the amount that parents are expected to pay for college. In reality, the EFC is a number used to determine your level of need based on the cost of each college. For most families, that number will seem high and maybe even ridiculous.
The FAFSA4caster and most of the online EFC calculating tools will provide only a single number result. Our calculator includes both the total EFC and a four-quadrant analysis in determining the EFC number. This is what makes both our free EFC calculator and the EFC PLUS core tool different. A good EFC calculator should include parent’s assets, parent income, student’s assets and student’s income as questions and results. You need to know that detail to create a proper college funding strategy and to make better decisions.
Here is a table to give you a comparison of the methods:
|Product Availability||FAFSA4caster||EFC Plus Free Calculator||EFC PLUS Core Tool|
|Ease of use||Yes||Yes||Yes|
|4 Quadrant Analysis||No||Yes||Yes|
|Retirement income factored in calculations||No||Yes||Yes|
|Estimated CSS Profile in calculations||No||Yes||Yes|
|Integrated with College cost data||No||No||Yes|
|Customized Financial outcome of cost||No||No||Yes|
|Graduation debt projection||No||No||Yes|
|Side by Side Comparison of Colleges||No||No||Yes|
|Financial aid award letter projection||No||No||Yes|
|Impact of siblings in calculations over time||No||No||Yes|
As stated earlier the EFC PLUS Core Tool goes beyond the FAFSA4caster and most EFC calculators. It generates an EFC that changes with the families demographics. This improves the financial projection of the college net price. The EFC PLUS tool calculates the impact of siblings over the four-year projected length of college rather than just a one-year look. With this information, you can better estimate the net cost of each college and financial outcome. The college net price calculators vary greatly in quality. The biggest disadvantage is they only provide a one-year view of cost and not the total net cost.
The more accurate information a family is able to input into a college calculator, the better information the EFC calculator will provide for the family. Getting the best information will allow the family to make a better financial decision and maximize their resources.
Sample of the Expected Family Contribution Analysis in the EFC PLUS Core Tool: