WHAT IS EFC (EXPECTED FAMILY CONTRIBUTION) OR SAI (STUDENT AID INDEX)?
The EFC (Expected Family Contribution) is the amount of money family is expected to contribute towards COA (cost of attendance).
| Parents’ AGI (Adjusted Gross Income) + Untaxed Income & Benefits | – | Income Allowance Fed Income Taxes SS (Social Security) Taxes State Taxes Employment Exp. Allowance | x 22 – 47% (assessed at a variable rate) | = | Parents’ Contribution from Income |
| Parents’ Assets | – | Asset protection Allowance | x 5.64% (assessed at a variable rate, no asset protection allowance as of 2023-2024, FAFSA) | = | Parents’ Contribution from Assets |
| Students’ AGI (Adjusted Gross Income) + Untaxed Income & Benefits | – | Income Allowance Fed Income Taxes SS (Social Security) Taxes State Taxes | x 50% (assessed at a flat rate) | = | Students’ Contribution from Assets |
| Students’ Assets | – | x 20% (assessed at a flat rate) | = | Students’ Contribution from Assets EFC (Expected Family Contribution) |
In the EFC calculation: The family’s home/farm (if family lives in the home/farm) are not assessed. Business assets are not counted if the owner employs 100 or fewer full time employees. Above 100 employees are assess at a special net worth adjustment. Parental asset protection allowance is based on the age of the older parent. The allowance increases with the age of the older parent.
What are the assets included in FAFSA:
Included: 529s (Parent Assets), Bonds, Checking, CDs, Mutual Funds, Other Real Estate, Savings, Stocks, UTMA/UGMA & Trusts.
Excluded: 401K, Annuities, Family owned small business and Farms (2024-2025 + will be included), Home Equity, IRA, Life Insurance Values, Pension, Personal Property.