1. EFC Hand calculation Workshop
2018 ILASFAA Annual Conference: Celebrating the superhero in all of us!

2. Shani charles
Sr. Associate Director
The University of Chicago

3. Workshop Objectives Review “What is an EFC?” Go Over EFC Formulas
Analysis EFC Methodologies
Review Income Protection Allowances (IPA)
Calculate an EFC for an independent Student
Recap Available Resources for You!

4. What is an EFC?
Simple answer - The Expected Family Contribution (EFC) is a number that determines students’ eligibility for federal student aid.
Complex conversation – Not so cut and dry when discussing with a student who demonstrates need, but not enough for gift aid.

5. Resource Tip!
The methodology for determining the EFC is found in Part F of Title IV of the Higher Education Act of 1965, as amended (HEA).

6. EFC Formulas
Formula C
For independent students with dependents other than a spouse
Formula A Dependent Students
Formula B
For independent students without dependents other than a spouse

7. Simplified EFC Formulas
Assets are not considered in the simplified EFC formulas
A student qualifies for the simplified EFC formula if:
Anyone in the parents’ household size (dependent student) or the students household size (independent student) received benefits during 2014 or 2015 from any of the designated means-tested federal benefit programs, or;
The student’s parents (dependent student) or the student and students’ spouse (independent student) filed or were eligible to file a 2015 IRS Form 1040A or 1040EZ, filed a 2015 IRS form 1040 but were not required to do so, were not required to file any income tax return, or;
The student’s parent (dependent student) or the student and/or student’s spouse (independent student) is a dislocated worker, and;
The combined 2015 income of the student’s parents (dependent student) or the combined 2015 income of student and spouse (independent Student) is $49,999 or less

8. Automatic Zero EFC
Certain students automatically qualify for a zero EFC. Students must meet the simplified EFC requirements, except for these differences:
The income threshold for the parents of dependent students and for independent students and their spouses is $25,000 or less, and;
Independent students without dependents other than a spouse cannot receive an automatic zero EFC

9. Calculation Tip!
All calculations should be carried to three decimal places and rounded to the nearest whole number
Round up for .500 to .999, round down for to .499

10. Why does this matter? Pow!
Financial Aid Professionals may not need to use routinely; understanding the components of the EFC calculation can help with exercising professional judgement for income adjustments.
Pow!

11. Income Protection Allowance
Food 30%
Housing 22%
Transportation 9%
Clothing & Personal Care 16%
Medical Care 11%
Family Consumption 12%

12. When should we use this
May want to use to determine if a professional judgement is warranted.
If a student requests to examine how their EFC was calculated.
You have idle time!

13. 2017–2018 EFC FORMULA B : INDEPENDENT STUDENT
Case Study : Alec Green (independent)
Alec will be a fourth-year undergraduate student starting in Fall He is married, and his wife, Monique,
also will enroll half time as a fourth-year undergraduate student in Fall They have no children. Alec’s
date of birth is April 13, He and his wife live in Indianapolis, Indiana.
Alec and Monique filed an IRS Form 1040A for the 2015 tax year, as allowed. They reported an adjusted gross
income (AGI) of $35,706, 2 exemptions, no interest or dividend income, a $2,500 American Opportunity Tax
Credit, and a tax liability of $1,623. During 2016, Alec had $14,424 in earnings, of which $9,600 was from a
cooperative education program through his school. Monique’s 2016 earned income was $21,282. Neither Alec
nor Monique received benefits from a means-tested federal program in 2014 or 2015.
Alec’s and Monique’s only assets are $2,798 in their joint checking account, which Alec reported on his
FAFSA.
NASFAA CORE | Federal Methodology | Module 6 | Page 6-21 Participant Handout

14. Income summary Student/Spouse AGI: $35,706.00
Student Income $14,424.00
Spouse Income $21,282.00
Tax Liability $1,623.00
Cooperative Education Program $9,600.00
Education Credit $2,500.00
Cash/Check/Savings $2,798.00

15. Matrix

16. Additional Financial Aid information

17. 2017–2018 EFC FORMULA B : indEPENDENT STUDENT
Student/Spouse Contribution –
Nine-Month EFC –

18. Helpful resources
Higher Education Act of 1965, Part F -
Electronic Code of Federal Regulations, Title 34, Part 600 – 679
Electronic Code of Federal Regulations, Title 34, Part 680 –
Federal Student Aid Handbook -

19. More resources
Verification/ Tax Transcript Matrix
IRS Publication
IRS Publication
ISIR Guide -
EFC Formula Guide -
FAFSA PDF’s -

20. Questions