Every year millions of students submit applications to prestigious colleges and universities in hopes that their educational dreams might be fulfilled. Letters of acceptance soon fill the mailbox and a student must decide upon which school offers the greatest potential to succeed. Even once a college is chosen, however, there is much to be done. One of the most important tasks that remains is
. completing an application for financial aid. The form that most colleges use for this is the Free Application for Federal Student Aid, which is more commonly known as FAFSA. Within the FAFSA application, there is a significant portion devoted to determining the ability of a student's family to contribute toward the cost of education. After completing the application, an estimate is provided regarding the dollar amount which the family is expected to contribute. This dollar amount is known as the Estimated Family Contribution, which is more commonly referred to as the EFC. There are several components that contribute to the EFC, but it is essentially calculated on the basis of a family's financial strength. The most important factors for this formula are a family's taxed income, untaxed income, outside benefits and assets, such as a family's house or car. These factors are then compared to the number of people within the household and the number of family members who are attending college. The dollar amount presented within the EFC is not the actual dollar amount that will be paid to the school, rather it is a number that is used to determine the amount of financial aid a given school will provide. There are laws governing the formula used to calculate this number, and there is no appeal process regarding the results. Completing the FAFSA in an accurate manner ensures that correct EFC is applied. Once this number is determined, financial aid workers within the school are able to work with students to develop a financial aid package that meets the requirements of the EFC and the needs of students' families. More Reference Links: http://www.fafsa.ed.gov/help/fftoc01g.htm http://www.finaid.org/calculators/finaidestimate.phtml
