Office of Student Aid : Parents of Students : Parent Newsletter

Penn State Office of Student Aid Parent Newsletter
March 2008

Expected Family Contribution and What It Means to Your Student

After your student completes the Free Application for Federal Student Aid (FAFSA), he or she will receive a Student Aid Report (SAR) that summarizes the information submitted to the Department of Education. On that report, you will see a number titled "Expected Family Contribution" or EFC. The EFC is calculated by the Department of Education and represents a measure of your family's financial strength and ability to fund your student's educational expenses. It is easy to assume the EFC will be the amount your family will be asked to pay for your student's educational costs; however, schools are not always able to offer financial aid to fully meet a student's financial need. This difference is sometimes referred to as a gap.

The actual amount your family will end up contributing may vary by college or university and is based on the amount of funding, endowments, and number of students at each institution. Not every college has sufficient financial aid funds to meet the calculated financial need of each applicant. For example, at Penn State, we are typically not able to meet the difference between EFC and the cost of attendance for all families. As a result, there may be a difference in the amount of the EFC and what your family will actually need to contribute to your student's educational costs. You can think of the EFC as an index that schools use to offer financial aid.

You may ask, "How do we close the gap between what an institution has offered in terms of student financial aid and the amount we can afford to pay?" As a family, you can help offset costs in a number of ways:

• You can borrow a Federal Parent PLUS Loan.
• If the PLUS Loan is not an option for you, your student may borrow an educational loan from an alternative or private lender. Before your student chooses an alternative loan, review our PLUS vs. Alternative Loan information.
• Your student can earn funds through a part-time job to help pay for expenses incurred during the academic year.
• Costs can be reduced by living at home and commuting to a Penn State campus closer to home or attending a Penn State campus other than University Park.
• Your family can utilize the Penn State payment plan.
• Your student can apply for private or outside scholarships to help offset future year costs.

For more information on the options listed above, please access the Aid Programs section on our Web site.