Estimating your EFC (Expected Family Contribution)

EFC. It's one of the important acronyms related to financing a college education. The Expected Family Contribution is the amount the government (and colleges) expect you to contribute toward the estimated total educational costs every year. This becomes the foundation for calculating how much financial aid you're eligible to receive (estimated college costs - EFC = financial need).

Your EFC is 'officially' calculated once you've completed and submitted the FAFSA form (here's a student-friendly video explaining it). But since that can take some effort, and it's not even possible until after January when the FAFSA form becomes available, it's possible to estimate your EFC using handy online calculators. Here are two from MyRichUncle and FinAid.org. Both are from student loan oriented sites which I plan to look into more closely.

The only 'hard' part of this exercise is gathering (or estimating) enough of your own financial information to complete the form. This was about a 45 minute exercise for me the first time. Since I already had all the data it took less than 15 minutes the second time.

I did learn a couple of interesting facts in this process that make my situation better than I had expected. The following two assets don't count 'against you'. That is, the government doesn't expect you to use these assets to help pay for college:

• home equity (except by some private colleges)
• retirement accounts (e.g. IRAs, 401k's)

Because of this it's a good idea to pay down credit cards and contribute to those retirement accounts before filling out your FAFSA . I sure plan to.