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Improve the Financing Process
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Improve the Financing Process 


Improve Federal Grant and Loan Programs

EFC recommends that Congress increase grant aid for at-risk, low-income, and first-generation students so as to minimize their need to borrow, especially in the first years of college. 

EFC is developing more detailed recommendations to improve federal grant and loan programs so as to ensure that federal resources are targeted to those who need them most.

Increase Income Protection and Savings Allowances

The expected family contribution (EFC) is the amount of money that a family is expected to  contribute toward the price of a student’s education from its income and assets. The EFC consists of two parts: the parent contribution and the student  contribution. Generally, “family contribution” refers to both of these combined. For independent students, there is no parent contribution.

To determine the amount of income available for educational purposes, both parents and students are given “offsets” against income. Offsets include taxes, employment expenses, and an income  protection allowance. For parents and independent students with dependents, the income protection allowance can range from approximately $17,000 to $53,000, based on family size and number of family members enrolled in college. After subtracting the offsets from total income, the remaining income is called available income. For parents and independent students with dependents, the available assets are added to the available income to arrive at the adjusted available income. A portion of this amount is multiplied by 22 to 47 percent (plus a additional pre-determined assessment) to arrive at the total expected family contribution.

Increase the income protection allowance and savings allowance for students so as not to negatively impact financial aid awards for those students who work more to minimize and/or avoid borrowing.