The law provides three different formulas to calculate the Expected Family Contribution.
1) Dependent Students
2) Independent Students without Dependents other than a spouse
3) Independent Students with dependents other than a spouse
Each calculation takes into account different factors that impact on a student ability to pay for a post-secondary education. In addition to the three above formulas, the law also provides for special calculations of the EFC in special circumstances.
The simplified formula is the same as the regular EFC calculation, but it does not take into account asset information.
A Dependent Student qualifies for the simplified calculation if nether the student nor the parents were required to file an IRS Form 1040 and the parents’ AGI Adjustable Gross Income or income earned from work was less than $50,000.
An independent student qualifies for the simplified calculation if neither the student nor his spouse was required to file an IRS Form 1040 and the student and spouse’s combined AGI Adjustable Gross Income or income earned from work was less than $50,000.
A student that qualifies for the simplified formula and provides asset data will have two EFC scores. the EFC from the simplified formula is called the primary EFC and is printed on the front of the student’s SAR while the EFC from the full calculation is called the secondary EFC and is printed in the FAA Information section. In all cases, the secondary EFC will be equal to or higher than the primary EFC. You may use either EFC when determining financial need.
The law also provides for an automatic zero EFC for some students. If neither parents nor the student was required to file an IRS Form 1040, and the parents’ combined Adjusted Gross Income or combined income earned from work is $13,000 or less then they will automatically qualify for an EFC score of zero.
An independent student with dependents other than a spouse automatically qualifies for a zero EFC if neither the student nor spouse was required to file an IRS Form 1040 and spouse’s combined Adjusted Gross Income or combined income earned from work is $13,000 or less.