When you file your FAFSA, the federal processor will consider the information you reported regarding your household income and assets, the number of people and the number of college students in your household, etc. The result of the FAFSA process will be a figure referred to as the Expected Family Contribution or EFC.
Your EFC is not the amount that your family will have to pay for college nor is it the amount of federal student aid that you will receive. The EFC is a tool that financial aid professionals will use to determine your eligibility for need-based aid such as Pell Grant and subsidized loans.
FAFSA provides a tool that will allow high school juniors and seniors to estimate their EFC for the next academic aid year. This tool is called the FAFSA4caster. The FAFSA4caster will allow you to estimate your EFC using your prior year tax returns and household income and asset information. An additional benefit to using the FAFSA4caster is that some information, such as student and parent names, social security numbers, dates of birth, adresses, etc., will be stored in the database until you are ready to complete an actual FAFSA. When you file your FAFSA, the forms will be pre-populated with that information, making it faster and easier to complete the actual FAFSA.
The Office of Scholarships and Financial Aid, based on federal guidelines, uses a formula to determine eligibility for need–based aid. The formula is as follows:
For more information regarding how federal financial aid is awarded, please visit http://studentaid.ed.gov/.