A great deal of attention has gone to the renaming of the FAFSA’s Expected Family Contribution to Student Aid Index. The change is a good one, even if it is primarily cosmetic. The formula and inputs remain largely the same, and the end result is still what it has been: a tool with which colleges and universities can assess all students’ financial health on a consistent set of metrics. What’s different is mostly that it’s finally being called that. If you’ve read this blog for more than a minute, you’ve probably seen that the EFC is a late-teenage years version of What to Expect When You’re Expecting– and just as you should expect pregnancy to feel like aliens have taken over your body, you should expect your Expected Family Contribution will not be your actual cost to attend college.

A couple of key differences are worth highlighting. Remember, too, that these changes go into effect for the 2023-2024 school year, meaning the FAFSA that will become available on Oct. 1, 2022.

  • Divorced parents: Currently, the custodial parent for the FAFSA is the parent with whom the student spends the most time. In the new version, the custodial parent is the parent providing the most financial support. There may still be planning opportunities here, especially in the case of students whose higher-income parent funds a 529 such that they are providing more limited cash support during the FAFSA years.
  • Pell Grant eligibility: Eligibility for Pell Grants will no longer be determined by EFC. Instead, it will be based on family size and adjusted gross income, with families whose adjusted gross income is within a multiple of the federal poverty level for a family their size being eligible. Maximum Pell Grants will go to students within either 175% or 225% of the federal poverty level, depending on household demographics.
  • The Income Protection Allowance has been increased but only reflects family size, not number of college students.
  • Cost of Attendance now has some guardrails around it, including that the food allowance must be the equivalent of three meals per day, whether on campus or off. This is a big deal for a variety of reasons; one that applies broadly is that families attempting to compare actual costs of colleges will have a somewhat more level playing field because quoted meal plan costs should be more similar. (Many schools use their lowest-level meal plan in their COA figures, which makes the school appear less expensive than it might be.)