While school may use FAFSA to determine need-based aid, I do not imply they calculate a separate EFC but they certainly calculate a different aid number, so your EFC may not match with what you receive from school.
The federal, FAFSA based EFC is misunderstood by many to mean that the EFC number represents all that the family will be expected to contribute to college expenses. For all but a very small number of schools, this is a absolutely not the case. A minority of schools (not “each school”) will either calculate an institutional EFC using something other than FAFSA (predominately CSS/Profile) to award institutional need-based aid, or these schools may award aid based on a subset of FAFSA data.
I have worked in financial aid at several schools, all FAFSA-only. The EFC was used in two ways: One, to award federal aid within the regulatory guidelines (Pell as required; SEOG using an institutionally developed formula to award the pot of federal money to students with the lowest EFCs; FWS using institutionally developed formula to award the federal/institutional pot of money to a subset of students based on EFC and factors involving packaging parameters; determining subsidized loan eligibility). Two, to allocate the limited institutional funding among the student population in a manner determined to best assist the neediest students. For example, at one school we awarded students with an EFC under a particular number a package of grant aid (Pell, SEOG, institutional) that equaled tuition for 12 credits less their EFC.
We did not promise to meet need at any school where I worked. Thus, EFC was simply a number used to award Pell and to allocate the limited pool of federal/institutional grants & FWS. Oh, and it came into play when determining whether/how much of the student’s federal loans would be subsidized.
At every Federal Student Aid conference I attended, aid professionals requested that the Department of Education find another name for EFC.
Schools that require FAFSA and not another financial aid application may still come back with additional questions. They may have other criteria for their own money. They may have awards that require more financial info. A school can have just about any criteria they please in awarding their own money.
This is essential. It fundamentally miscommunicates the meaning of the number. It’s an index, and should be expressed as such. Accurate names would include: College Aid Index (CAI), Family Financial Index (FFI), Index for Federal Student Aid (IFSA), Federal Student Aid Index (FSAI), etc.