The College Costs Guessing Game

Your Expected Family Contribution is what a college or university wants it to be.

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Long before the current economic crisis took over our collective consciousness, cost and affordability were key factors in determining college access for many students. Now, however, families of all means find themselves in search of assistance as college costs mount and personal liquidity diminishes.

The search begins with a need to pin down the Expected Family Contribution (EFC) relative to a student's educational expenses. Depending on the EFC, a student can expect to receive more or less financial assistance from a range of sources including state and federal governments as well as the colleges themselves.

[Know your Expected Family Contribution.]

Two forms, the Free Application for Federal Student Aid (FAFSA) and the College Scholarship Service PROFILE, are used to calculate the EFC. All schools require the FAFSA in order to draw in as much government funding as possible—and many use the FAFSA to determine a student's eligibility for institutional funding as well. About 400 private colleges also use the PROFILE to determine a student's eligibility for funding from their sources.

On the surface, determining the EFC would seem simple. Complete the forms and find out how much you are expected to contribute from family resources. The online FAFSA Forecaster is designed to serve this purpose and, effective this fall, the federal government will require institutions to provide "net price calculators" on their respective websites.

[Get help on the FAFSA through fun web videos.]

Theoretically, these predictive resources should provide reliable answers to families who are searching for EFC information. They don't, however, for several reasons:

1. The online forecasters are not constructed to assess the personal nuances of family situations, so they are only capable of providing generic responses. Factors such as contributions from non-custodial parents, treatment of assets/home equity, and allowances for mitigating health/employment circumstances are not easily addressed by online forecasters.

2. They don't account for the value that is attached to the applicant by an institution's selection process—a value that ultimately determines the composition (grants, loans, work study) of a financial aid award.

3. Finally, many private schools exercise differential needs analysis. In other words, as they assess the EFC they may elect to apply either the FAFSA or PROFILE methodologies. The problem is that the methodologies are sufficiently different so that EFC assessments can differ by $5,000-$10,000.

Instead of precision and transparency, then, you are left with, at best, a reasonably close estimate as you attempt to nail down your EFC. Short of seeking an early estimate of your EFC directly from the financial aid offices of the schools to which you are applying, anticipating college costs remains a guessing game.

In the final analysis, your EFC is what a college or university wants it to be—and that is not likely to be known until the student has been offered admission. The decision to admit and support a student with financial aid is a calculated decision that is often driven by the student's desirability to the institution.

As you begin to develop strategies for anticipating and managing college costs, then, do so with your eyes wide open. The good news for families of college-bound students is there is a lot of institutionally awarded financial aid to be found. You just might not find answers regarding where, and how much, as easy to pin down as you would like.

paying for college
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