How well does FAFSA capture families’ ability to pay for college?

The Free Application for Federal Student Aid (FAFSA) is designed to determine a student’s need for financial aid, but the formula used to calculate students’ expected family contribution (EFC) leaves many facing a number that they simply cannot afford, The New York Times reports. Moreover, EFC amounts can be misleading, as the vast majority of colleges do not commit to covering 100 percent of students’ demonstrated need. (Georgetown University is one of a small number of colleges that pledge to admit students on a need-blind basis and meet the full financial need of eligible admitted students.)


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An imperfect formula

The cumbersome, 36-page EFC formula can be especially inaccurate for families living in high-cost regions, as it does not account for cost-of-living variations. The calculation shields less than $30,000 in income for a family of four—and just $19,000 for a single parent with one child in college—and takes into account certain assets such as retirement savings contributions. In addition, “its assumptions for the costs of food, clothing, and shelter are unrealistically low for even the cheapest places in the country,” writes the Times.

“The expected family contribution is a terrible measure of what people can actually afford,” Robert Kelchen, assistant professor for higher education at Seton Hall University, told the Times. “It’s more of a way for colleges and government to rank people by how much need they have. It’s really more of a rationing tool.”

Pushing for improvements

While about 400 schools and programs (Georgetown included) also use another formula called the CSS Profile to calculate institutional aid, the vast majority of colleges continue to rely solely on the EFC. “For a long time, there has been this growing chasm between the need-analysis formula and accurately reflecting a student and their family’s ability to pay for college,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. 

Congress is working on ways to adjust the formula. House Democrats, for instance, recently proposed legislation that would tweak the EFC formula so that families earning $37,000 annually could qualify for a “zero EFC,” compared with the current threshold of $26,000.

Experts note, however, that simply decreasing families’ expected contributions won’t be enough, given the size of the gap between college costs and what families can actually afford. “It will not be enough to just get the formula right,” Jessica L. Thompson, director of policy and planning for the nonprofit Institute for College Access & Success, told the Times. “To truly bring college costs within realistic reach will require much broader federal investments in financial aid and in public colleges.”

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