Expected Family Contribution, also known as EFC, tells you what your family should expect to pay for college tuition, fees and room and board. Your family's financial condition and health help to determine your EFC.

EFC uses a formula, created by the federal government to determine how much a family should be able to pay for one year of a child's college education. Federal, state, and college financial aid programs use the EFC to determine how much financial aid a family and their student are eligible to receive.

How EFC is calculated

After a family fills out the Free Application for Federal Student Aid or FAFSA, the official EFC is determined. This application asks questions about the student's and parents' income, benefits, and assets. The federally established formula takes these into account, in addition to considering family size and the number of family members who will be attending college that year.

The financial aid sections of most college websites allow you to estimate your EFC based on a simplified version of the official formula. The information can help give you an idea what to expect when you fill out the FAFSA and get your official EFC.

Things that can affect EFC

All aspects of your family's financial situation can affect your EFC. The student's liquid assets and past tax year income have the most significant impact. The parents' liquid assets and past tax year income have a lesser effect because parents are not expected to contribute as much of their money as students are.

You can appeal to your school's financial aid office to have your EFC reevaluated due to special circumstances. These may include the loss of a job or a one-time boost in income during the previous tax year.

Why you need to know what your EFC is

Your EFC will have a significant impact on the amount of need-based financial aid you are eligible to receive. By definition, financial need is the total cost of attending one year of school minus your EFC. Many colleges commit to meeting financial need with a combination of grants, scholarships, student loans, and work-study jobs.

Once you know what your EFC is, you can look at the cost of each college and make a guess at how much financial aid you are likely to receive. You can also start planning for how you will pay for college. You can use student savings or income, parent savings or income, or loans to come up with the family contribution.