Financial Aid: Estimated Family Contribution

For families with students who are currently in college now, or have students who are preparing to go, the FAFSA form is going to be one of the key parts of getting financing for college. One thing that I still struggle with understanding is the reason that the system is designed the way it is.

EFC - Estimated Family Contribution

However, one of the major factors that determines how the financing that you will receive is allocated, is your Estimated Family Contribution. Complexity is no object for the federal government. Similar to tax code and tax tables, there is a significant amount of work that goes in to determining how much money you are going to get and how much your family is expected to contribute.

From a political/social standpoint/personal standpoint, this is absolutely maddening for me. I feel like this is something that doesn’t make a whole lot of sense. When I went to school, there was an amount that my family was expected to contribute. In my particular case, I was under 18 at the time, so I was still a minor. However, this process continued throughout my four years at college and the process is still this way.

The Problems With EFC

Despite a young adult being just that, an adult, mommy and daddy still have to pay for college. Now, students will be expected to take out loans too, but why do parents need to bear any of this cost? This is a fair question to ask in my book. Not all parents have had great luck, high paying jobs, or gotten a tidy inheritance along the way. Some families are floating barely above the line of middle class, struggling to save for retirement and then get this nasty surprise in the form of a line on Johnny’s college financing where they find out that they are expected to contribute four, six, eight, or ten thousand dollars toward this first year of college. Johnny might not finish school. He might not get a good job. Or several other things might happen. But regardless of that, parents are on the hook to take the risk for their kids.

You can learn more about the process of EFC.

Disclaimer

As always, none of the links in this article or information is certified by Help Your Money. This article is for informational purposes only and is not financial advice. We are not affiliated with any of the companies or organizations mentioned in this article and recommend that you learn as much as you can and consult professionals before making your decisions about college financing since these decisions can shape your financial future for decades to come.