Pikes Peak Test Prep

 

NEVER PAY RETAIL FOR COLLEGE: Estimate Family Contribution

by Beth V. Walker     posted: September 17, 2017

The EFC is your starting point because it’s the minimum out-of-pocket cost the colleges believe you should pay every year.  Knowing your EFC helps you formulate a game plan fro getting from where you are to where you want to be.  The EFC is a number calculated by the Department of Education or the College Board based on the information they collect on the financial aid form.

Many parents fail to calculate the EFC and head blindly toward the admissions process.  They spend their time and money and find our later they should have been looking at a different range of schools because of what they will be expected to pay.  They feel disheartened by what they should’ve done.  There are better ways to approach this, methods that can deliver a much easier, more satisfying experience.  Understanding this can help you avoid these mistakes. 




Turns out, the Department of Education and most American families are on opposite ends of the spectrum for calculating what is “affordable” where college is concerned.  Unfamiliar to most parents, the EFC is the minimum amount a student is expected to contribute toward the cost of college.  It is based on both the parents’ and the student’s income and assets, the size of the family, and number of students currently attending college in your household.  You must calculate and report this data every year the student(s) attend school to be eligible for any financial aid.  Circumstances change-people get divorce, laid off, a sibling also starts college - so it’s like nailing jelly to the wall.  This critical element of your overall funding plan can be a bit of an enigma.  Nonetheless, we need to understand what it is and the role it will play in our efforts.