Lets looks a little more into the FAFSA and shine some light on the Expected Family Contribution (EFC).

The EFC is the amount of money a family is expected to contribute each year to a student's education costs.  How this typically works is the lower the EFC the more financial aid a student may receive.

Several factors including family savings, earnings, family size, number of family members in college, all are used when calculating the EFC.

EFC information is provided to any school you listed on your FAFSA.  The financial aid offices of these schools will use the EFC to determine your financial need.  The financial need is the difference between the cost of attending a particular school and your EFC.  Once your financial need has been determined the financial aid office will put together a financial aid package and send an award letter.

Using the " Federal Methodology," the U.S. Department of Education takes the financial information you indicated on the FAFSA and then subtracts what it considers a reasonable annual living-expenses budget (for a family of four with one student in college, it's usually about $23,000).

It then expects your family to contribute anywhere from 22 to 47 percent of the remaining income. (The higher the family's income, the higher percentage it is expected to contribute.)

Approximately four to six weeks after you submit the FAFSA (half that time if on the Web); you'll receive your Student Aid Report (SAR). The SAR summarizes the information you provided on the FAFSA, and indicates your Expected Family Contribution (EFC). (An asterisk next to the EFC figure on the SAR means your FAFSA has been selected for verification.)

Please Note: Families with significant savings may also be expected to contribute a small percentage of that money to education costs each year. The College Board uses different formulas and budgets to calculate a separate EFC for those who file the PROFILE.

More FAFSA for you:

• FAFSA Deadlines
• More FAFSA Facts
• Filling Out the FAFSA
• FAFSA: Funny name