I was looking at the collegeboard financial aid calculator for George Washington U, and I noticed a big gap between the EFC and Net Price. The EFC was ~$3000 while the net price was ~$20000? What is the difference between these 2 numbers and which one is the price that I would have to pay? Thank you!
I should mention that the estimated remaining cost after loans and student work is still ~$11000
Some schools are ‘meets full need’ schools and will calculate an EFC (not necessarily the same as the FAFSA one) and that’s all a family will pay. Most schools calculate the EFC but don’t have enough money to award every student the full amount they need, so that’s a ‘gap’ the student has to figure out how to pay. In your example, you’d pay the $20k, $11k of it with loans and student work, and the other $8k with…? That is a big gap and this school is probably too expensive for you.
Assuming dependent student:
If the school “meets need”, then net price = EFC + ESC. ESC is the expected student contribution of federal direct loan and work earning expectations.
If the school does not “meet need”, then net price = EFC + ESC + unmet need.
Note that promises to “meet need” do not necessarily mean good financial aid, if the school calculates a high EFC and assumes a high ESC.
It looks lokw GWU does not promise to “meet need”, and it calculated an EFC of $3,000, an ESC of $9,000, and left you with unmet need of $8,000.
EFC is a calculation used by the federal government to determine your eligibility for Pell Grants and subsidized Stafford loans. Net cost is the price of the university after all financial aid has been provided. Some use EFC has a guideline for providing aid but most do not. You are required to pay the $20,000. After Stafford loans loans and what they expect you can make from work you have a gap of at least $11000. That can be covered by money in savings, parental loans, saving in costs included in the COA (i.e. lower travel costs, and spending less while at college etc.)
I really dislike the term “Expected Family Contribution”. I think it is misleading and doesn’t mean what it sounds like it means.
Net price is what your payment to the college will be. Net price from the NPC should be viewed as an estimate, especially right now because they are set up for students starting fall 2017.
Anyway…George Washington uses the Profile to determine the awarding of its own institutional aid…and I don’t believe the school meets full need for all. The Profile takes a much more in depth look at your finances than the Fafsa. For example, primary home equity is not counted at all on the fafsa but IS used by most Profile Schools. In addition, if there is a non-custodial parent, Profile schools often use that information too.
Which one is what you should expect to pay? The net price calculators are college specific…so use the net price you get from the NPC to estimate your net out of pocket costs to the college. Each school has its own formula…so you may find very different net costs from school to school using the NPC.
But your FAFSA EFC will be the same for every school your net costs will vary…
The term “EFC” is not used only by the federal government to describe a FAFSA result. Many schools calculate an EFC that is unique to that particular school’s financial aid calculation. It would be helpful to know if the EFC that is being referred to by OP is a FAFSA EFC or a school derived EFC.
@BelknapPoint I’m using the college board NPC which is college specific, so I’m assuming it’s the school derived EFC rather than the FAFSA.
Thank you everyone for your help!
What you should care bout is your net cost. That is far more important than your EFC. Your net cost is likely close to what the college will expect you to pay.
The purpose of the net price calculators is to give this estimated net cost.
It’s situation dependent. Our D’s college guarantees to meet 100 percent of demonstrated need, but they require the completion of the CSS PROFILE as well as FAFSA (if a student wishes to apply for and use Federal loans).
We get two EFCs each year–a Federal EFC for our D to qualify for Federal loans and an EFC from the college calculated using the Institutional Method to gain eligibility or their need-based grants. They are never the same. If you subtract the amount of annual Federal loans from the college’s EFC, it is exactly the amount we need to pay each year. In our case, the EFC is indeed our “expected family contribution” after the college’s need based grant is applied.
At our D’s college, in addition to estimated billed charges for tuition, room, and board, other expenses (standard amounts for books and supplies, personal expenses, and loan fees) are used to determine eligibility for financial assistance.
Our D didn’t qualify for any merit aid from her college. My understanding is most selective and highly selective colleges have very limited merit aid available only for the highest achievers if at all. The EFC calculations determine how much a family should be prepared pay for their student’s college education, independent of merit aid considerations.