Student loans and EFC

During the process of applying for student loans, the acronym EFC is likely to come up often. Here’s what you need to know about EFC and how it may affect your situation.

define: EFC
Expected family contribution. When a student is applying for federal student aid, colleges and universities use the EFC to determine eligibility and calculate financial aid award.

EFC is a not an amount that is expected to be paid by a family. Instead, it is an amount that is used to help calculate how much aid a student is eligible to receive. The formula that calculates EFC incorporates a variety of factors into the equation, including (but not limited to) the size of a family, the family’s total income and the family’s total assets.

EFC can play a major role in a studen’t financial aid package, so it’s important to understand where you may stand in this area. Being aware of EFC and how it may affect your specific situation can help you plan for the future more wisely.

Recommended reading: Student loan terminology