"The Efc Formula, 2018 - 2019"

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THE EFC FORMULA, 2018–2019
What is the EFC?
The Expected Family Contribution (EFC) is a number that determines students’ eligibility
for federal student aid. The EFC formulas use the financial information students provide on
®
their Free Application for Federal Student Aid (FAFSA
) to calculate the EFC. Financial aid
administrators (FAAs) subtract the EFC from students’ cost of attendance (COA) to determine
their need for the following federal student financial assistance offered by the U.S. Department of
Education (the Department):
Federal Pell Grants,
Subsidized Stafford Loans through the William D. Ford Federal Direct Loan Program,
Federal Supplemental Educational Opportunity Grants (FSEOG),
Federal Perkins Loans, and
Federal Work-Study (FWS).
The Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) is
a non-need-based federal program, for which a student must also use the FAFSA to apply.
The methodology for determining the EFC is found in Part F of Title IV of the Higher
Education Act of 1965, as amended (HEA). Tables used in the computation of the EFC for
the 2018–2019 Award Year were published in the May 1, 2017 Federal Register
(ifap.ed.gov/fregisters/FR050117.html) (82 FR 20322).
What is the source of data used in EFC calculations?
All data used to calculate a student’s EFC comes from the information the student provides on
the FAFSA. A student may submit a FAFSA:
by using FAFSA on the Web,
by filing an application electronically through a school, or
by mailing a FAFSA to the Central Processing System (CPS).
Students who applied for federal student aid in the previous award year may be eligible to reapply
using a renewal FAFSA online. Applying for federal aid is free, but to be considered for non-
federal aid (such as institutional aid), students may have to fill out additional forms, which might
require fees.
We encourage applicants to complete the FAFSA electronically, because there are edits that
reduce applicant errors and customize the questions presented based on answers to prior
questions. The electronic version also contains additional instructions and help features and
allows the Department to send results to the students and schools more quickly.
The EFC Formula, 2018–2019
1
THE EFC FORMULA, 2018–2019
What is the EFC?
The Expected Family Contribution (EFC) is a number that determines students’ eligibility
for federal student aid. The EFC formulas use the financial information students provide on
®
their Free Application for Federal Student Aid (FAFSA
) to calculate the EFC. Financial aid
administrators (FAAs) subtract the EFC from students’ cost of attendance (COA) to determine
their need for the following federal student financial assistance offered by the U.S. Department of
Education (the Department):
Federal Pell Grants,
Subsidized Stafford Loans through the William D. Ford Federal Direct Loan Program,
Federal Supplemental Educational Opportunity Grants (FSEOG),
Federal Perkins Loans, and
Federal Work-Study (FWS).
The Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) is
a non-need-based federal program, for which a student must also use the FAFSA to apply.
The methodology for determining the EFC is found in Part F of Title IV of the Higher
Education Act of 1965, as amended (HEA). Tables used in the computation of the EFC for
the 2018–2019 Award Year were published in the May 1, 2017 Federal Register
(ifap.ed.gov/fregisters/FR050117.html) (82 FR 20322).
What is the source of data used in EFC calculations?
All data used to calculate a student’s EFC comes from the information the student provides on
the FAFSA. A student may submit a FAFSA:
by using FAFSA on the Web,
by filing an application electronically through a school, or
by mailing a FAFSA to the Central Processing System (CPS).
Students who applied for federal student aid in the previous award year may be eligible to reapply
using a renewal FAFSA online. Applying for federal aid is free, but to be considered for non-
federal aid (such as institutional aid), students may have to fill out additional forms, which might
require fees.
We encourage applicants to complete the FAFSA electronically, because there are edits that
reduce applicant errors and customize the questions presented based on answers to prior
questions. The electronic version also contains additional instructions and help features and
allows the Department to send results to the students and schools more quickly.
The EFC Formula, 2018–2019
1
Who processes the application, and how are students
notified of their EFC?
The CPS receives the student’s application data, either electronically or on the paper application,
and uses it to calculate an EFC. After the FAFSA has been processed, the CPS sends the student
an output document containing information about his or her application results. This document,
which can be paper or electronic, is called a Student Aid Report (SAR). The SAR lists all the
information from the application and indicates whether the application was complete and signed.
If the application is complete and signed and there are no data conflicts, the SAR also includes
the student’s EFC. Students are instructed to carefully check the accuracy of the information on
the SAR. All schools listed on the student’s FAFSA receive application information and
processing results in an electronic file called an Institutional Student Information Record (ISIR).
Which EFC Formula Worksheet should be used?
There are three regular formulas and a simplified version of each:
Formula A for dependent students,
Formula B for independent students without dependents other than a spouse, and
Formula C for independent students with dependents other than a spouse.
Instructions for applicants who are eligible for the automatic zero EFC calculation are included
in each worksheet. See page 5 for more information on which students qualify for an automatic
zero EFC.
Formula A Worksheet ...................................................................pages 9–12
Simplified Formula A Worksheet ..........................................pages 13–16
Tables A1 through A7 (use with Formula A Worksheet) .......pages 17–20
Formula B Worksheet ...................................................................pages 21–22
Simplified Formula B Worksheet ...........................................pages 23–24
Tables B1 through B4 (use with Formula B Worksheet) .......pages 25–27
Formula C Worksheet ..................................................................pages 29–30
Simplified Formula C Worksheet ...........................................pages 31–32
Tables C1 through C6 (use with Formula C Worksheet) .......pages 33–35
Note: Do not complete the shaded areas in the simplified worksheets;
asset information is not required in the simplified formulas.
The EFC Formula, 2018–2019
2
What is the definition of an independent student?
Because the EFC formula for a dependent student uses parental data and the two formulas for
independent students do not, the first step in calculating a student’s EFC is to determine his or
her dependency status. For the 2018–2019 Award Year, a student is automatically determined to
be independent for federal student aid if he or she meets one or more of the following criteria:
The student was born before January 1, 1995.
The student is married or separated (but not divorced) as of the date of the application.
At the beginning of the 2018–2019 school year, the student will be enrolled in a master’s or
doctoral degree program (such as MA, MBA, MD, JD, PhD, EdD, or graduate certificate,
etc.).
The student is currently serving on active duty in the U.S. Armed Forces or is a National
Guard or Reserves enlistee called into federal active duty for purposes other than training.
The student is a veteran of the U.S. Armed Forces (see the definition in the box on page 4).
The student has or will have one or more children who receive more than half of their support
from him or her between July 1, 2018 and June 30, 2019.
The student has dependent(s) (other than children or spouse) who live with him or her and
who receive more than half of their support from the student, now and through June 30, 2019.
At any time since the student turned age 13, both of the student’s parents were deceased, or
the student was in foster care or was a dependent or ward of the court.
As determined by a court in the student’s state of legal residence, the student is now, or was
upon reaching the age of majority, an emancipated minor (released from control by his or her
parent or guardian).
As determined by a court in the student’s state of legal residence, the student is now, or was
upon reaching the age of majority, in legal guardianship.
On or after July 1, 2017, the student was determined by a high school or school district
homeless liaison to be an unaccompanied youth who was homeless or was self-supporting and
at risk of being homeless.
On or after July 1, 2017, the student was determined by the director of an emergency shelter or
transitional housing program funded by the U.S. Department of Housing and Urban
Development to be an unaccompanied youth who was homeless or was self-supporting and at
risk of being homeless.
At any time on or after July 1, 2017, the student was determined by a director of a runaway or
homeless youth basic center or transitional living program to be an unaccompanied youth who
was homeless or was self-supporting and at risk of being homeless.
The student was determined by the college financial aid administrator to be an unaccompanied
youth who is homeless or is self-supporting and at risk of being homeless.
For students who do not meet any of the above criteria but who have documented unusual
circumstances, an FAA can override their dependency status from dependent to independent. For
information about dependency overrides, see the Application and Verification Guide, which is
part of the Federal Student Aid Handbook and can be found on the IFAP Web site.
The EFC Formula, 2018–2019
3
TERMS USED IN THE DEFINITION OF AN INDEPENDENT STUDENT
LEGAL DEPENDENT. Any children of the student who receive more than half
of their support from the student (children do not have to live with the student),
including a biological or adopted child. Also, any persons, other than a spouse, who
live with the student and receive more than half of their support from the student now
and will continue to receive more than half of their support from the student through
June 30, 2019.
VETERAN. A student who: (1) has engaged in active service in the U.S. Armed
Forces (Army, Navy, Air Force, Marines, or Coast Guard), or has been a member of
the National Guard or Reserves who was called to active duty for purposes other than
training, or was a cadet or midshipman at one of the service academies, or attended
a U.S. military academy preparatory school, and (2) was released under a condition
other than dishonorable. A veteran is also a student who does not meet this definition
now but will by June 30, 2019.
Which students qualify for the simplified EFC formulas?
The following criteria determine which students have their EFCs calculated by a simplified
formula. Assets are not considered in the simplified EFC formulas.
For the 2018–2019 Award Year, a dependent student qualifies for the simplified EFC formula
if both (1) below and (2) on the next page are true:
(1) Anyone included in the parents’ household size (as defined on the FAFSA) received
benefits during 2016 or 2017 from any of the designated means-tested federal benefit
programs: the Medicaid Program, the Supplemental Security Income (SSI) Program, the
Supplemental Nutrition Assistance Program (SNAP), the Free and Reduced Price School
Lunch Program, the Temporary Assistance for Needy Families (TANF) Program
1
, and
the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
OR
the student’s parents:
filed or were eligible to file a 2016 IRS Form 1040A or 1040EZ
2
,
filed a 2016 IRS Form 1040 but were not required to do so
3
, or
were not required to file any income tax return;
OR
the student’s parent is a dislocated worker.
The TANF Program may have a different name in the student’s or student’s parents’ state.
1
For qualifying for the simplified or automatic zero EFC calculations, the following 2016 income tax
2
forms are considered equivalent to an IRS Form 1040A or 1040EZ: the income tax return required by
the tax code of the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the
Republic of the Marshall Islands, the Federated States of Micronesia, or Palau.
Applicants who are not required to complete an IRS Form 1040, but do so solely to claim an educational
3
tax credit, are considered eligible if they meet all the other requirements for the simplified EFC formulas.
The EFC Formula, 2018–2019
4
AND
(2) The combined 2016 income of the student’s parents is $49,999 or less.
For tax filers, use the parents’ adjusted gross income from the tax return to determine
if income is $49,999 or less.
For non-tax filers, use the income shown on the 2016 W-2 forms of both parents (plus
any other earnings from work not included on the W-2s) to determine if income is
$49,999 or less.
For the 2018–2019 Award Year, an independent student qualifies for the simplified EFC
formula if both (1) and (2) below are true:
(1) Anyone included in the student’s household size (as defined on the FAFSA) received
benefits during 2016 or 2017 from any of the designated means-tested federal benefit
programs: the Medicaid Program, the SSI Program, SNAP, the Free and Reduced Price
School Lunch Program, the TANF Program
, and WIC;
4
OR
the student and student’s spouse (if the student is married) both
filed or were eligible to file a 2016 IRS Form 1040A or 1040EZ
,
5
filed a 2016 IRS Form 1040 but were not required to do so
, or
6
were not required to file any income tax return;
OR
the student (or the student’s spouse, if any) is a dislocated worker.
AND
(2) The student’s (and spouse’s) combined 2016 income is $49,999 or less
For tax filers, use the student’s (and spouse’s) adjusted gross income from the tax
return to determine if income is $49,999 or less.
For non-tax filers, use the income shown on the student’s (and spouse’s) 2016 W-2
forms (plus any other earnings from work not included on the W-2s) to determine if
income is $49,999 or less.
Which students qualify for an automatic zero EFC
calculation?
Certain students are automatically eligible for a zero EFC. The requirements for receiving an
automatic zero EFC are the same as those for the simplified EFC calculation except for these
differences:
The income threshold for the parents of dependent students and for independent students and
their spouses is $25,000 or less (for an automatic zero EFC) instead of $49,999 or less (for
the simplified EFC calculation), and
For independent students, those without dependents other than a spouse cannot receive an
automatic zero EFC.
See note 1 on page 4.
4
See note 2 on page 4.
5
See note 3 on page 4.
6
The EFC Formula, 2018–2019
5
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