Expected family contribution and FAFSA: The college cost home stretch

As you prepare for the high school home stretch, figuring out how to pay for college is perhaps the biggest thing to nail down. You’ve heard of the dream school, safety school, and that “reach” school that might push the acceptance boundary given your test scores, class rank, and other admission criteria. 

But what about the best value school, or the lowest cost of attendance (COA) school? And maybe a “financial reach” school with a high sticker price but also a potential tuition discount? 

To decide what you can afford, you need to fill out your Free Application for Federal Student Aid—the FAFSA. The FAFSA determines your expected family contribution (EFC) and can even tell you which state and school grants and scholarships you’re eligible for. Here’s what you need to know about the FAFSA and paying for college.

FAFSA + EFC = Financial aid package

The FAFSA is a standard application used by the federal government—and potential colleges—to determine your financial aid package. The information you provide on your FAFSA includes:

• Personal and identifying information
• Information about your finances
• Information about your parents’ finances
• Information about how many of your siblings are in college
• What schools you plan to apply to

Once you fill out the FAFSA, the government uses a formula to figure out what your expected family contribution (EFC) should be. This is an amount of money the government thinks your family can put toward your total cost of attendance (COA) at college.

Your FAFSA information is sent to the schools you choose on your application. Once the schools have this information, they put together your financial aid package.

What about the CSS Profile?

In addition to the FAFSA, you might fill out a CSS Profile if you’ve applied to schools that use it. The CSS Profile is a general application that can qualify you for merit-based scholarships and other financial aid at participating schools. 

The profile charges a small fee, but it’s waived for families who make less than $100,000 per year. When you fill out this application, it’s sent to schools to help determine what additional scholarships—both merit-based and need-based—you qualify for.

When combined with the FAFSA, the CSS Profile can help you get a more complete financial aid package.

What’s in your financial aid package?

After you’ve been accepted and your financial aid forms have been reviewed, schools will inform you of your individualized financial aid packages. You’ll receive different offers from each school based on the aid you qualify for. Some schools use both the FAFSA and the CSS Profile to determine your total financial aid picture. 

Those important financial aid letters will offer various ways to help cover your COA, such as:

• Federal grants (including the Pell Grant)
• Federal student loans (subsidized and unsubsidized)
• Federal work-study programs State-level, need-based grants
• School-level, need-based grants and scholarships
• Some merit-based state and school scholarships

Your financial aid letter will also include information about the total COA—including tuition, room and board, books, equipment, fees, and other estimated costs. This will help you determine whether you still need to come up with funding beyond your financial aid.

Paying for college: How to decide where to go

Compare your financial aid offers to decide what makes the most sense for your situation. Depending on what’s available, your aid letters can help you choose a state school versus private school, or whether to start at a community college. You can also try to leverage an offer from another college to get a better deal from your first choice. 

Sending your FAFSA and CSS Profile information to as many schools as possible provides you with more options to choose from—and a chance to negotiate. Compare financial aid offers and look at your remaining costs. 

All this information will help you choose a school that you can afford, based on whether you get grants, scholarships, and/or loans. Consider how much debt you can handle if you need loans to help bridge a college funding gap. In some cases, you might have to start at a lower-priced school to make attendance practical and affordable.

Other funding sources to help pay for college

If you need additional funding sources to attend the college that’s right for you, there are options:

• Grants. This is money from federal and state governments, or from some schools and private organizations. You don’t have to repay this money, and how much you receive is usually based on your family’s financial situation. The FAFSA is often used to determine these amounts.
• Scholarships. You don’t have to pay this money back, either. It usually comes from states, schools, nonprofits, and private organizations. Scholarships can be based on need, on your achievements (merit), or even your interests or your heritage. Participating schools and organizations might use the CSS Profile and FAFSA to award scholarships. There may also be additional scholarships available in your community. Your counselor should be able to help you find and apply to these.
• Job or work-study. Some students get part-time work while attending school to pay for living expenses and reduce the amount of debt they have to take on. Federal Work-Study guarantees you certain hours and a pay rate. You must fill out the FAFSA to qualify. If you don’t qualify for work-study, your college might have a list of other jobs on campus, or you can check with local stores and restaurants.
• Personal savings. If you have money saved up in a 529, Coverdell ESA, or some other account, use it for qualified expenses, such as tuition and fees. Tapping into other savings accounts to avoid using loans (or reduce how much you borrow) can help, too.
• Federal student loans and subsidized versus unsubsidized. For those who need to borrow, federal student loans can be a good first step. The amounts allowed vary depending on your year in school and your college’s cost of attendance. If you qualify for subsidized loans, the U.S. Department of Education will pay your interest while you’re in school (as long as you’re at least a half-time student) and for the first six months after you graduate. You will then begin payments and pay interest for as long as you have the loans. Direct unsubsidized loans are available for every student who completes the FAFSA; no financial need is required. With unsubsidized loans, your interest accrues while you’re in school and is added to your loan balance after you graduate.
• Private student loans. If you’ve exhausted everything else, you can turn to private student loans. However, it’s important to note that these lack the protections and repayment options that come with federal student loans.

In recent years, loan forgiveness has emerged as a hot social and political issue. Although there’s much disagreement about society’s responsibility to help borrowers, there’s one area where we should all agree: College students and parents should put “value” at or near the top of college selection criteria. Not necessarily the cheapest option, but the one with the best blend of fit, prestige, career-boosting potential, and practical affordability.

The bottom line

How you pay for college is up to you. Sometimes it makes sense to dial back your expectations to avoid crushing student loan debt. Consider all your options carefully and make sure you fill out the FAFSA as soon as possible so you know what’s available to you. Applications may be submitted starting October 1 for the following award year.

And because things change from year to year—your family’s income level, the amount of aid available, and the costs of college—you need to fill out a new FAFSA each year you plan to attend college.