{ "id": "R44503", "type": "CRS Report", "typeId": "R", "number": "R44503", "active": true, "source": "CRSReports.Congress.gov, EveryCRSReport.com, Federation of American Scientists", "versions": [ { "source_dir": "crsreports.congress.gov", "title": "Federal Student Aid: Need Analysis Formulas and Expected Family Contribution", "retrieved": "2022-01-26T04:03:54.151187", "id": "R44503_10_2021-12-21", "formats": [ { "filename": "files/2021-12-21_R44503_a31f2763e936a4fabafba260b991c3c973f83fb3.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R44503/10", "sha1": "a31f2763e936a4fabafba260b991c3c973f83fb3" }, { "format": "HTML", "filename": "files/2021-12-21_R44503_a31f2763e936a4fabafba260b991c3c973f83fb3.html" } ], "date": "2021-12-21", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R44503", "type": "CRS Report" }, { "source": "EveryCRSReport.com", "id": 579760, "date": "2018-03-30", "retrieved": "2018-04-03T13:25:21.565404", "title": "Federal Student Aid: Need Analysis Formulas and Expected Family Contribution", "summary": "This report describes the need analysis formulas used to calculate the Expected Family Contribution (EFC) for federal student aid applicants. The formulas are codified in Title IV of the Higher Education Act (HEA), as amended. The Free Application for Federal Student Aid (FAFSA) is the data collection instrument through which students submit the information that is used to calculate the EFC.\nThe HEA has three EFC formulas: one for dependent students and one each for independent students with and without dependents. A student\u2019s dependency status is determined by the student\u2019s age and other characteristics. The dependent student formula considers the financial resources of the student and the student\u2019s parents. The independent student formulas consider the financial resources of the student and, if applicable, the student\u2019s spouse.\nThe financial resources considered by the EFC formulas are divided into income and assets. The EFC formulas\u2019 definition of a family\u2019s income is fairly inclusive and includes many forms of taxable and nontaxable income. The EFC formulas\u2019 definition of assets includes balances of qualified bank accounts, investments, business equity, and real estate. There are substantial exemptions in the calculation of assets, including a family\u2019s primary residence, retirement accounts, and a family-owned small business. \nThe EFC formulas provide a number of allowances against income and assets (also known as \u201cprotections\u201d). Only income and assets in excess of these allowances (\u201cavailable\u201d income and assets) are considered when calculating the EFC. If the family\u2019s income is below the allowance level, the family will have no available income and therefore no contribution from income. Similarly, if the family is required to report assets and the amount of assets is below the asset protection allowance, the family will have no available assets and therefore no contribution from assets.\nAssessment of available income and/or assets is the calculation of the actual EFC or components thereof. The assessment rate is the portion of available income or available assets that contribute to the EFC. For example, the assessment rate for available income of an independent student without dependents is 50%, meaning that each dollar of income in excess of the income allowances increases the family\u2019s expected contribution by 50 cents. Assessment rates vary by dependency status and type of financial resource (i.e., income or assets). Generally speaking, additional available income is assessed at a higher rate than additional available assets.\nIn cases where an applicant\u2019s income is below statutorily-specified levels, the family may be eligible for a simplified needs test (SNT) in which the family is not required to report information on assets. Thus, the EFC of applicants who are eligible for the SNT is based entirely on the family\u2019s income. In cases where an applicant qualifies for the SNT and meets certain additional income criteria, the applicant may be eligible for an \u201cautomatic zero\u201d EFC.\nThe HEA contains provisions that allow for adjustments for families in specified circumstances. For example, a family with multiple students enrolled in postsecondary education has its EFC divided among the enrolled students. The HEA also contains provisions that allow an individual school\u2019s financial aid administrator to exercise professional judgment and adjust certain data used to calculate the EFC to reflect unusual circumstances like job loss, atypically high medical expenses, or other exceptional situations.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R44503", "sha1": "3ef3b51ec159f9a698d027a04d1b59cfdc4931c1", "filename": "files/20180330_R44503_3ef3b51ec159f9a698d027a04d1b59cfdc4931c1.html", "images": { "/products/Getimages/?directory=R/html/R44503_files&id=/1.png": "files/20180330_R44503_images_6a8bb3e15874fc2ec15545d866f0623f1c44b538.png", "/products/Getimages/?directory=R/html/R44503_files&id=/0.png": "files/20180330_R44503_images_cb6e210b1e4d4690a4d2c14443ef38f0e749cbb5.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R44503", "sha1": "e483643ddaf5e1684b76a0474ee30b7365a84a4d", "filename": "files/20180330_R44503_e483643ddaf5e1684b76a0474ee30b7365a84a4d.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4906, "name": "Postsecondary Education" } ] }, { "source": "Federation of American Scientists", "sourceLink": "https://sgp.fas.org/crs/", "id": "R44503_FAS", "date": "2016-10-20", "retrieved": "2016-10-20T23:30:56", "title": "Federal Student Aid: Need Analysis Formulas and Expected Family Contribution", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20161020_R44503_b3109d31a827fef00297df4b03784ac34200ae6a.pdf" }, { "format": "HTML", "filename": "files/20161020_R44503_b3109d31a827fef00297df4b03784ac34200ae6a.html" } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 452659, "date": "2016-05-18", "retrieved": "2016-11-28T22:12:40.636917", "title": "Federal Student Aid: Need Analysis Formulas and Expected Family Contribution", "summary": "This report describes the need analysis formulas used to calculate the Expected Family Contribution (EFC) for federal student aid applicants. The formulas are codified in Title IV of the Higher Education Act (HEA), as amended. The Free Application for Federal Student Aid (FAFSA) is the data collection instrument through which students submit the information that is used to calculate the EFC.\nThe HEA has three EFC formulas: one for dependent students and one each for independent students with and without dependents. A student\u2019s dependency status is determined by the student\u2019s age and other characteristics. The dependent student formula considers the financial resources of the student and the student\u2019s parents. The independent student formulas consider the financial resources of the student and, if applicable, the student\u2019s spouse.\nThe financial resources considered by the EFC formulas are divided into income and assets. The EFC formulas\u2019 definition of a family\u2019s income is fairly inclusive and includes many forms of taxable and nontaxable income. The EFC formulas\u2019 definition of assets includes balances of qualified bank accounts, investments, business equity, and real estate. There are substantial exemptions in the calculation of assets, including a family\u2019s primary residence, retirement accounts, and a family-owned small business. \nThe EFC formulas provide a number of allowances against income and assets (also known as \u201cprotections\u201d). Only income and assets in excess of these allowances (\u201cavailable\u201d income and assets) are considered when calculating the EFC. If the family\u2019s income is below the allowance level, the family will have no available income and therefore no contribution from income. Similarly, if the family is required to report assets and the amount of assets is below the asset protection allowance, the family will have no available assets and therefore no contribution from assets.\nAssessment of available income and/or assets is the calculation of the actual EFC or components thereof. The assessment rate is the portion of available income or available assets that contribute to the EFC. For example, the assessment rate for available income of an independent student without dependents is 50%, meaning that each dollar of income in excess of the income allowances increases the family\u2019s expected contribution by 50 cents. Assessment rates vary by dependency status and type of financial resource (i.e., income or assets). Generally speaking, additional available income is assessed at a higher rate than additional available assets.\nIn cases where an applicant\u2019s income is below statutorily specified levels, the family may be eligible for a simplified needs test (SNT) in which the family is not required to report information on assets. Thus, the EFC of applicants who are eligible for the SNT is based entirely on the family\u2019s income. In cases where an applicant qualifies for the SNT and meets certain additional income criteria, the applicant may be eligible for an \u201cautomatic zero\u201d EFC.\nThe HEA contains provisions that allow for adjustments for families in specified circumstances. For example, a family with multiple students enrolled in postsecondary education has its EFC divided among the enrolled students. The HEA also contains provisions that allow an individual school\u2019s financial aid administrator to exercise professional judgment and adjust certain data used to calculate the EFC to reflect unusual circumstances like job loss, atypically high medical expenses, or other exceptional situations.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R44503", "sha1": "be6e4d199c9db52e52bb5d20973af980233049ae", "filename": "files/20160518_R44503_be6e4d199c9db52e52bb5d20973af980233049ae.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R44503", "sha1": "8b638ce0412090093d3cb4c37bec4899361f6923", "filename": "files/20160518_R44503_8b638ce0412090093d3cb4c37bec4899361f6923.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 4906, "name": "Postsecondary Education" } ] } ], "topics": [] }