Need Analysis: Understanding the EFC
[Pages:29]2019 New Aid Officer Workshop
Need Analysis: Understanding the EFC
Dawn Coleman-Glenn Training Specialist for Scholarships &
Financial Aid Texas A&M University dcoleman@tamu.edu
Texas Association of Student Financial Aid Administrators
Overview
? Definition of Need Analysis ? Factors that make up the EFC
calculation and why they are important ? The various federal formulas ? Fundamentals of calculating an EFC
Texas Association of Student Financial Aid Administrators
What is Need Analysis?
? Definition:
? The process of determining the student's Expected Family Contribution (EFC) based on the formula established by Congress. Also known as Federal Need Analysis Methodology and Federal Methodology, or FM.
Texas Association of Student Financial Aid Administrators
Guiding Principles
? Primary responsibility to pay for education rests with the student and parents/family
? Family is expected to contribute to the extent it is able
? Families must be evaluated in an equitable manner
Texas Association of Student Financial Aid Administrators
Expected Family Contribution (EFC)
? Definition: ? Measure of how much the student and his or her family can be expected to contribute to the cost of the student's education for the year.
? The EFC is calculated according to a formula specified by law.
Texas Association of Student Financial Aid Administrators
What Comprises the EFC?
Basic EFC Formulas: Factors of EFC Calculations:
? Dependent
? Independent w/no dependent(s)
? Independent with dependent(s)
AGI Eligible to file a 1040A or EZ Federal Means Test Dislocated Worker
Total Income:
AGI
Wages Earned
Untaxed Income
Additional Financial Information
Income Protection:
? Taxes Paid ? Household Size ? Number in college ? State and other Tax allowance
Protection of Assets:
? Age of Student (if independent) ? Age of Older Parent
Texas Association of Student Financial Aid Administrators
EFC : used to Calculate Need
Cost of Attendance (minus) EFC Need
? The EFC determines:
? Pell eligibility ? Need versus non-need-based aid
Texas Association of Student Financial Aid Administrators
Basic EFC Formulas
? Formula A ? For dependent students
? Formula B ? For independent students without dependents (other than a spouse)
? Formula C ? For independent students with dependents other than a spouse
Texas Association of Student Financial Aid Administrators
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