Often times there is a disconnect between the Expected Family Contribution (EFC) that is calculated based on the Free Application for Student Aid (FAFSA) and the amount of money a family feels they can afford each year for college costs.  The lengthy formula used to calculate financial aid under the federal mythology uses some stingy assumptions.  According to a recent New York Times article, the formula assumes that a family of four can survive on $30,000 per year regardless of where they live.  These out-of-date assumptions can paint a much different picture of a family’s finances. Further, few colleges meet 100% of your financial need.  In this case, you may be responsible for paying your EFC in addition to the unfunded portion of your financial need.

 Although there is little you can do to change the formula, you can arm yourself with information. Don’t wait until the last minute to calculate your EFC.  There are many ways to estimate, including using the FAFSA4caster or net price calculators available on the colleges’ websites.  Regardless of whether or not you agree with the number, at least you can begin to prepare.  Remember that some colleges also require a CSS/Profile (or college-specific form) in addition to the FAFSA.  At these colleges, the EFC from the FAFSA4caster won’t necessarily give you an accurate estimate.  Colleges using the CSS/Profile examine your financial information in a lot more detail, which can make your EFC much different.  Using a net price calculator at the college-specific websites may be a better option to estimate your college costs.  

 With a better idea of your financial obligation, as defined by the colleges and federal government, you will be in a better position to plan accordingly.  Maybe add some colleges where your student is more likely to get a merit scholarship, or that has a lower price point.  After all, better to be elated by a nice merit scholarship than reeling from a bunch of unaffordable options.