The Expected Family Contribution--What Do We Really Expect?

Perspectives - MastheadBy Marvin Smith  

As we roll through the summer, colleges are busy providing orientation programs to new students and their parents. Many include financial aid update sessions, which I sense are increasingly attended each year as the cost of college rises and the importance of financial aid increases. Orientation provides a great opportunity to teach families about the process of paying for college, but what should we be teaching them? What do we expect from families?

I just recently learned that a majority of schools do not list a FAFSA-driven Expected Family Contribution (EFC) on an award letter anymore because it is "too confusing" and it leads to "too many questions." In fact, the NASFAA Award Letter Task Force omitted the EFC figure from its recommendations for a model award letter. Even the FASFSA Student Aid Report issued by the Federal Processor hedges on this issue, informing families that "the EFC is not the amount of money that your family must provide" and that families should think of it as aid eligibility index.

Coming from schools that have traditionally listed an EFC on an award letter and regularly deal with the questions, I certainly understand the concern. But simply avoiding the topic of the "mysterious" EFC leads to more parent confusion than necessary. I believe the financial aid community should take back the discussion and help families make sense of the enigmatic "paying for college" system. 

Here are a few reasons we need to make families more aware of some expectations: 

1. Families need to understand that they are expected to contribute toward college costs to the extent they are able.  

How many schools are delivering this simple message at orientation? Regardless of your perspective about whether the EFC accurately reflects a family’s ability to pay, downplaying the EFC (i.e., not listing the EFC on an award letter) only serves to compound the impression that the family does not have a responsibility for higher education costs.  

2. The EFC is still relevant.  

While the EFC figure is shocking to some families, the EFC does not come out of thin air. If anything, one could argue that the contribution defined by the EFC can be too low, given that some significant financial assets are all but ignored in Federal Methodology need analysis. But many parents still come to orientation believing that they will not have to pay for any college expenses.

3. If parents do not contribute to college costs to the extent they are able, the student is likely to incur more student loan debt then necessary. 

Colleges simply do not have enough financial aid to ignore the resources of parents. But who ends up providing for unmet need if the parents do not contribute to the extent they are able? Usually, it is the student who makes up this difference. Many turn to working an outrageous number of hours or borrowing private loans which often carry unfavorable terms and rates. I continue to be shocked when I talk to parents who say "I want to put the entire debt in [my child’s] name," or that they want to "be sure [their child] has some skin in the game." That is fine, to a point. But should parents who have the resources to help really be cosigning on outrageous private loan products to simply make sure that the student "pays for college?" 

4. The EFC appears on the ISIR, so it is already likely to confuse families.  

If we aren't proactive in explaining what the EFC represents, families may be misled by the mistaken belief that they "have to write a check for the amount of the EFC" and assume that they cannot afford to send their student to college. On the other end of the spectrum, some families with a low EFC may assume the figure represents great news. These families believe they’ll only have to pay X amount of dollars so their child can attend any college in the country regardless of cost. If we don’t explain what an EFC represents to families--as well as have a conversation about unmet need--some students will end up enrolling at our schools who simply cannot afford to attend, and they often will not figure this out until the middle of their freshman year 

5.  By not explaining expectations to families, we are not working with them in a transparent way.  

The EFC drives eligibility for need-based aid, so not only do we need to explain what the EFC is, we also need to explain the full cost of attendance estimate and the rising cost of college, the difference between direct and indirect costs, and the reality of unmet need in aid packages. Quite simply, the financial aid profession needs to do a better job of educating families about the current economic realities of paying for college. 

Clearly, the concept of the EFC is difficult to explain in a way that makes sense.  This should not dissuade us from at least trying to explain expectations to families.  Some parents may feel overwhelmed by the cost of college, the weight of the college choice decision, and the heightened emotions that come with sending a child to college. Other parents may not have even thought about how much they can contribute to college costs. Dismissing or ignoring information about expectations can impede the decision-making ability of families and lead to poor choices. In my view, our profession has a responsibility to educate families about expectations regardless of how difficult those discussions may be. 

Marvin Smith started his financial aid career as a graduate student working on a NASFAA Sponsored Research Grant project focused on the parents’ perspective of financial aid at Purdue University in 1988. He is currently director of student financial services at Indiana University - Purdue University Indianapolis (IUPUI). 


  • I realize that this is a semi-dated article at this point, but I just had some insight to share. I, personally, do not feel as though the term EFC should even be relayed to students or parents. My logic in this is that the terminology is not important and along with many FA terms, EFC is a professional one. One of our main focuses in this field, besides accurate assessment and packaging, needs to be cutting through the complicated FA process and simplifying it for the student and family. I also do not necessarily think that changing it to AEI will help much either. As I said, "EFC" is for us as professionals and we know how it works and what it means. Based on that sentiment, why change it?
    Please do not misunderstand me, it is very important for the student and family to understand every aspect of their college funding that may be relevant. However, we can still provide all of the information without confusing the matter with terms like EFC. In my opinion, the most important thing for the family to consider is outside COA, unmet need, etc. In essence, it would be more important to explain what the GAP balance is, than what the EFC is.
    Yes, the family may see the term EFC depending on institutional standards. So simplify it. Explain that this is merely an estimated amount used by us, the FA professionals and the DoE, to more accurately award and package the student's aid. Then, we can assure them that we are there to help them understand anything that may confuse them including the things covered in Entrance/Exit Counseling, GAP, outside COA and unmet need.
    In short, it does not take a greater understanding of EFC on behalf of the student and family. It takes a greater understanding on our part of how to explain the individual circumstances of each student to the family and really give them the knowledge they truly need to know without bogging them down (or torturing ourselves) with terminology.

  • Our award notification does not list EFC but does include what the family can expect to pay because ultimately THAT is the quesiton we are asked most. We do not experience families fixated on the EFC figure.

    When we discuss EFC with families we explain the calculation is more of an index. I think Rose H's suggestion is right on. As an insititution that does not meet need, the EFC is an internal tool. It is important for us to understand it of course but at the end of the day the family has minimal interest in the mechanics of how aid was determined and much more interest in "how do I pay what is left?".

    I concur with Marvin's point that conversations with families need to include that they are expected to contribute. As an old-timer, I remember the days when we always started with "Parents, you are expected to contribute." It seems the tune has changed - case in point the new shopping sheet where Family Contribution is listed LAST as "Other options".

  • Perhaps changing the name from Expected Family Contribution to Aid Eligibility Index would be easier to swallow for parents and students. Financial aid officers use acronyms daily so explaining and AEI would be clearer.

  • Amen.

  • Marvin, excellent food for thought, your points clearly stated and well taken. Whether the EFC is or is not displayed on instutitional award letters, at the end of the day the key question for students and families tends to be "O.K., so how do I change the EFC?" This then leads to the usual discussions at each campus about which types of PJ situations are or are not likely to be available to families as they consider the realtive uniqueness of whatever is going on for them.
    The whole thing has been an obvious disconnect for at least as long as unmet need has been a reality for student award packages. The old timers remember the era where the EFC had some mathematical meaning relative to calculating "need" that schools were actually able to meet, but since that creaky ship sailed it has been an increasingly surreal discussion about what the EFC "isn't" as opposed to what it might once have been. Even then, though, aid recepients with work-study and loans had difficulty reconciling the concepts of the COA, the EFC, and what they needed to "really pay" against the actual term bill, and of course those confusions remain in the unmet need era as well.
    The irony here is that a deep and practical understand of exactly how the EFC is calculated, step by step, is in fact incredibly useful when considering the use of PJ, and in advising students and parents when responding to their questions about whether their unique circumstances, if considered by the school, would or would not have any impact on their further aid eligibility. So, we need to be expert in knowing how the EFC "works," even though as a concept it doesn't work as a message to families about their true financial obligation at virtually any school.
    JIm Eddy

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