Determing Financial Need

Before setting off on your search for financial aid, you will want to take some time to determine your financial need.

The basic mathematical equation for calculating financial need is as follows:

Cost of Attendance (COA) – Estimated Family Contribution (EFC) = Financial Need

Here’s a look at what each of these terms means and how they are calculated.


Each school estimates its own cost of attendance based on its tuition and fees, room and board, text books, transportation, and other miscellaneous expenses. Check your school’s financial aid website for more information about COA.


Your estimated family contribution is the total of your parent’s expected contribution plus your expected contribution. If your parents no longer claim you as a dependent on their taxes, then your EFC is based solely on your expected contribution.

Both your parents’ and your contribution is calculated as follows:

  1. Income – expenses = Available Income
  2. Assets – debts against those assets = Available Assets
  3. (Available Income x Assessment Rate) – (Available Assets x Assessment Rate) = EFC

While not all expenses and debts can be subtracted from your income and assets, many can be, including: mortgage payments, tuition paid for other dependents attending college, and unusually high medical bills.

The EFC formula also makes allowances for your parents’ savings and assets, so that only a small percentage is expected to be contributed toward your education.

All of this means that even if you think you or your parents earn too much, or have too much in retirement savings or home equity, it’s still worth your time to apply for financial aid. In fact, most applicants are eligible and two out of three full-time undergraduate students receive financial aid.

To simplify the process of calculating your financial need, try using an online financial need calculator, like the streamlined EFC calculator at

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