Federal law establishes the exact formula used to calculate the EFC, based on factors such as the family's income and assets, the student's income and assets, family size and the number of students currently attending college.
Although you can estimate your EFC, the actual number is based on the FAFSA, or Free Application for Federal Student Aid. After your FAFSA is processed, you will find your EFC on your SAR, or Student Aid Report.
The FAFSA defines the difference between the cost of attending a school and the EFC as the student's financial need. Many schools will fully meet this need with a combination of grants, loans and work-study programs.
The EFC determines a student's eligibility for federal financial aid such as Pell Grants and Stafford loans. In addition, individual schools use the EFC to award need-based financial aid.
Families with unusual financial circumstances should contact individual colleges, as each school uses its own formula to determine the EFC on which its financial aid packages are based.