A student’s estimated family contribution (EFC) is the amount of money the student’s family can be expected to contribute toward the student’s college costs. Financial aid administrators determine an applicant’s need for federal student aid from the U.S. Department of Education and other non-federal sources of assistance by subtracting the EFC from the student’s cost of attendance (COA).
A first year independent graduate student enrolled in the Anesthesia for Nurses Master’s Program for the 2009-2010 term may have a COA of $57,418. If the student’s EFC is $2,000, their financial need would be $55,418.
$57,418 (COA) - $2,000 (EFC) = $55,418 (Need)
How does EFC influence financial aid?
Financial aid administrators use the information from the Free Application for Federal Student Aid (FAFSA), including the EFC, to develop a financial aid package. This package specifies the types and amounts of assistance (federal and non-federal aid) a student will receive to cover his or her education-related expenses up to the COA. However, because funds are limited, the amount awarded to a student may fall short of the amount of aid for which the student is eligible.
Although your EFC indicates the amount your family should be able to contribute toward your education, this does not mean you will have to pay that amount. If your EFC is higher than your COA (example: COA is $10,000 for the school year, EFC is $12,000), you cannot borrow any subsidized Stafford loans. You can receive the full amount of Stafford you qualify for, but all funds will be in an unsubsidized Stafford loan.
For example, if you are eligible to receive $8,500 subsidized Stafford and $12,000 unsubsidized Stafford (total of $20,500), but your EFC exceeds your COA, you would receive the full $20,500 as an unsubsidized Stafford loan.