When you start looking at specific colleges, net price calculators are the best tool to figure out how much the school will actually cost– especially since they will show the aid package including self-help aid (loans and work study). Anyone who has gone through this process knows that the net price tends to differ quite a bit from EFC. And only the FAFSA provides an EFC, so you’re definitely going to get a different cost from a school that requires the CSS Profile. Which begs the question, does EFC matter?

I would argue that EFC is a valuable tool for several reasons:

  • Knowing your EFC will help to manage expectations about how much you will be asked to pay. This is especially valuable to families who are further out from college, such as those with middle schoolers or high school freshmen.
  • If you know your EFC, you can decide whether your student is a candidate for need-based aid or merit aid. If your EFC is more than the cost of attendance– or more than you’re able to pay– then your student should be pursuing merit aid.
  • EFC calculators such as the FAFSA4caster allow you to model the impact of different scenarios fairly easily. Those might include increasing your savings or having one, two or more college students at the same time. You can do this on net price calculators as well; however, you need to repeat the process on each school’s calculator.

So, how do you calculate your EFC? The FAFSA4caster is the easiest tool for this. However, it has a big shortcoming: It doesn’t ask you to add back your retirement contributions so you need to do that manually. Those wanting a more thorough approach can use the EFC Formula Guide. Note that both of these tools are from last year; the version that will be filled out this fall is not yet available. For additional info on coming updates to the formula, read here.