Alice Murphey: Financial Aid Expert

Alice Murphey Financial Aid Column 3

March 29, 2011

Alice Murphey Financial Aid Column 3

Everybody works to get high marks in college, but in the so-called School of Financial Aid, sometimes it pays to get the lowest score.

Such is the case with your Expected Family Contribution, which is referred to as EFC. Your EFC is determined by the information on your Free Application for Federal Student Aid, or FAFSA. (And I know you have submitted your FAFSA already so you can be ahead of the game; there’s still time to file, but at this point some students are starting to receive their award letters.)

Colleges calculate your need for aid based on your EFC and the cost of attending school. First, they look to see whether you are eligible for merit awards, which are based on high school academics and performance or SAT scores. Then they tap into grants based on financial need.

Some applicants are intimidated by the EFC, but there’s nothing to worry about. The EFC is a helpful tool that takes the guesswork out of financing your college education.

I recently volunteered at College Goal Sunday, a program to help families fill out their FAFSAs. One father was concerned that his EFC would be so high that he would not be able to send his son to college. So he was surprised – and delighted – to discover that his EFC was zero.

Your FAFSA information is processed with a formula developed by Congress to determine your EFC. The EFC is a measure of your family’s financial strength; colleges use it to determine the amount and kind of financial aid package they will offer you.

Your EFC is based on this FAFSA data: total family income and benefits, tax-filing status, number of people in your family, number of family members in college and some family assets.

Another key factor of EFC is your dependency status. The answers to certain questions on your financial aid application(s) will determine whether you are a dependent student who must report your parents’ income and resources along with your own, or whether you are an independent student who is required to report only your own (and if you have one, your spouse’s) income and resources.

After your FAFSA has been processed, you will receive a Student Aid Report or SAR. The SAR lists the information from your application and indicates whether you correctly completed the application and signed it. If there are no errors, the SAR will include your EFC.

Check the information on the SAR to make sure it is accurate and that you didn’t inadvertently misreport anything. You can always go back online and correct your FAFSA.

To be eligible for a federal Pell Grant, for example, your EFC must be below a certain dollar amount, which can vary from year to year. For the 2011-2012 award years, the EFC must be less than $5,274. Pell Grants for next year are $555 to $5,550 for full-time students. The highest grants are given to students with the lowest EFCs.

By the way, that worried father at College Goal Sunday was a big winner: Not only was his EFC zero, but his son also was eligible for a full Pell Grant.

Alice Murphey, CUNY’s director of financial aid management, has been helping students with tuition issues for more than 30 years.