Determining EFC and Cost of Attendance

What is Cost of Attendance?

Your college or university will generally publish on its Web site or in its financial aid office the college's cost of attendance. This is an estimate of how much money will be required to attend school for one year at that college, including all reasonable expenses. Most people, when budgeting for college, look at the tuition and assume that tuition is more or less the "price tag" for that school, when the reality is that tuition may be as little as 50% of the overall budget. Here are some sample costs of attendance from a survey done by TheStreet.com:

Prestige school (Ivy League or near-Ivy League):
- Tuition, $31,644;
- Room/board, $9,873;
- Books & supplies, $1,419;
- Plus similar costs for personal expenses and transportation.
- Total cost: an estimated $44,592 per year.
Private four year university/school:
- Tuition, $16,086;
- Room/board, $6,540;
- Books & supplies, $920;
- Plus costs for personal expenses and transportation.
- Total cost: an estimated $26,226 per year.
State university/Public school:
- Tuition, $8,670;
- Room/board $7,176;
- Books/supplies $950;
- Plus expenses and transportation.
- Total cost: an estimated $18,452 per year.

Incidentally, the fact that state and public universities are broken out into a separate category is an indication of price range, not quality. Some public universities are as well regarded or even more prestigious than their private university counterparts.

How does Cost of Attendance influence financial aid?

A school's financial aid office generally determines the programs and amounts of aid an applicant receives. This involves determining the cost of attending the college, calculating a student's Expected Family Contribution (EFC), and then awarding aid to meet the difference between the two - the calculated financial need.

What is the EFC?

The Expected Family Contribution (EFC) is the amount a family can be expected to contribute toward a 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).

The EFC formula is used to determine the EFC and ultimately determine the need for assistance from the following types of federal student financial assistance: Federal Pell Grants, subsidized Stafford Loans (though the William D. Ford Federal Direct Loan [DL] Program or through the Federal Family Education Loan Program [FFEL]), and assistance from the “campus-based” programs—Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Perkins Loans, and Federal Work-Study (FWS).

The methodology for determining the EFC is found in Part F of Title IV of the Higher Education Act of 1965, as amended (HEA).

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, including non-federal aid, a student will receive to cover his or her education-related expenses up to 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

What is the source of data used in EFC calculations?

All data used to calculate a student’s EFC come from the information the student provides on the FAFSA. A student may submit a FAFSA (1) through the Internet by using FAFSA on the Web, (2) by filing an application electronically through a school, or (3) by mailing a paper FAFSA to the Central Processing System (CPS).

Students who applied for federal student aid in the previous award year may be eligible to reapply by filing a Renewal FAFSA over the Internet or by submitting a paper renewal application. Applying for federal aid is free. However, to be considered for non-federal aid (such as institutional aid), a student may have to fill out additional forms and pay a processing fee.

We encourage applicants to complete the appropriate electronic version of the FAFSA rather than a paper FAFSA because the electronic versions contain additional instructions and help features, have built-in edits that reduce applicant error, and allow the Department to send application results to students and schools quicker.

What happens if awarded aid falls short of Cost of Attendance?

Then it's student loan time - alternative student loans, to be specific. Alternative private student loans bridge the gap between awarded aid and Cost of Attendance. For example, let's look at the Prestige School's Cost of Attendance again and some financial aid. Let's say that you are awarded the maximum amount of federal aid for Pell Grants, Perkins Loans, and Stafford Loans as a freshman. That means:

Perkins Loan - maximum of $4,000
Stafford Loan - maximum of $6,625 ($2,625 subsidized)
FSEOG - maximum of $4,000
Pell Grant - maximum of $4,050

That puts your federal financial aid package at $18,675. Let's also assume that you receive $2,000 in scholarships and an additional $5,000 in state and institutional financial aid. That puts your aid package at $25,675, which will almost cover tuition. You'll still have about $2,955 in tuition to cover, plus the remaining expenses, which totals $20,680.

Where can you get $20,680? From an alternative private student loan like the Act Private Student Loan from the Student Loan Network. It can give you up to $40,000 per academic year, which will finish off the costs of attending more expensive schools.

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