Estimated Family Contribution (EFC) Will Be Absurdly High

Many parents are shocked when they see how much they are expected to pay for college costs. They think that the amount the federal government expects them to contribute to college is outrageously high.

And frankly, the EFC formula is problematic.

Unrealistic and Out-of-Date

U.S. News and World Report article critiqued the calculation used to determine the EFC for college, arguing that it is unrealistic. According to critics, there are three main problems with the EFC calculations.

  1. First, the budget estimates that it relies on are outdated. They do not take into account expenses like childcare, computers, or internet costs.These expenses add up and can reduce that amount of money that families can contribute to college.
  2. Second, the EFC does not account for cost-of-living differences in different regions of the country. This particularly works against families living in high-cost areas because the EFC assumes that they can contribute as much for college expenses as families living in cheaper areas.
  3. The third critique of the EFC is that it has very conservative spending assumptions. The formula does not take into account that many parents are spending some of their disposable income on their own student loans or paying for private secondary schools.

To make matters even more complicated, the EFC calculated by one of your colleges may be different than the one calculated by the federal government. Some colleges use unique formulas to determine their version of the EFC.

You won’t know if the college calculates the EFC a different way until you receive your financial aid offer letter from the school.