How to Reduce Your Expected Family Contribution

How to Lower your EFC on the FAFSA and Get More Financial Aid

If you’re applying for financial aid with the FAFSA, there are two basic numbers that go into the equation.

First, there’s the cost of schooling – that includes tuition, room, board, textbooks, and other supplies.

Then comes your expected family contribution (EFC) – the amount of money an institution believes you have available to pay for schooling. Don’t be surprised if that number assumes rather austere living for the rest of the family.

Your FAFSA’s financial aid eligibility is basically the cost of school minus your EFC. As there’s no way to change the cost of the school – you’ve got to concentrate on ways to reduce your expected family contribution. Here are a number of perfectly legitimate ways to reduce your expected contribution – without doing anything untoward.

Reducing Your Expected Family Contribution

  • Don’t lie on the FAFSA. There is always a temptation to fudge the numbers. Don’t do it. If you get caught, you’re in for a world of hurt. The government could impose fines and up to 5 years of jail time, you could be required to pay back moneys received – and, worst of all, you may be declared ineligible for any aid going forward. It’s just not worth it.
  • Time your application carefully. Be entirely truthful – but be smart. Everything you enter on your FAFSA form has to be accurate for the date you submit. That means, if you’ve got a raise coming up or a financial windfall in your future, make sure you get the application in beforehand. If your child is planning to get a job to help pay for education – get the FAFSA in first!
  • Spend your child’s money first. The actual student is expected to pay the highest percentage of income and assets – reduce these first. Then come parents, and finally any other sources (like grandparents). Spend down assets accordingly.
  • Avoid capital gains and other forms of income. Income counts much more than assets when calculating EFC. That means keep your stocks in stocks – at least until your application is complete. If you sell your stocks and take gains, that will hurt much more than leaving them alone as assets (the opposite is true for losses).
  • Delay gifts. If a grandparent is planning to help contribute – hold off. Make it a graduation gift.



You won’t find this anywhere else in the college planning space…

It’s an “inside look” at your college funding situation – over the phone, with one of our education consultants… absolutely FREE.

They’ll help you figure out where you stand… including whether or not you can lower your Expected Family Contribution (EFC) – and maximize your eligibility for financial aid.

What’s more – YOU set the date and time for the call.

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  • Pay off debts. Credit card debts, auto loans – these things don’t count against your assets when calculating the EFC. If you spend the money to pay them off, though, then you’ve erased that from your assets.
  • Minimize withdrawals. While 401(k) assets don’t count against you – if you withdraw from them to help pay for college, they do. Plus, you’ll be paying hefty penalties. A bad idea all around.
  • Accelerate any necessary purchases. If your family needs a new computer – get it before you submit your FAFSA. Same for a new car, or any other expenses. The smaller you can make your assets, the better. Don’t spend wildly – just move purchases up.
  • Have more than one child in college. By maximizing your expected college costs, you will receive more financial aid for each.

These are all entirely legal ways to help maximize the aid you get. Practice them all, and you’ve got a much better shot at receiving adequate financial aid.

Until next time,

Scott Weingold

Related Articles:

How Does My EFC Work?

How is Financial Aid Calculated?

What You Must Do After You Fill Out Your College Financial Aid Forms

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Joanne BauerSeptember 27th, 2010 at 6:45 am

How is withdrawinf from your child’s 529 considered an assest?
I have one in college now and my 2nd going next year, I am using up my oldest child’s 529 before the end of this year in order to decrease my assests. Will this actually penalize us?

Joanne Bauer

Jodi PolsterSeptember 27th, 2010 at 8:30 am

This all depends on the school. However, in the Federal financial aid formula, the value of a 529 account is typically considered an asset of the account owner (normally the parent). By using the 529 account, it will decrease your assets but the withdrawal may count as income to the student at some universities.

CynthiaOctober 30th, 2010 at 5:39 pm

Do we need to report rental properties that we own in other countries?

LouieNovember 3rd, 2010 at 9:06 am

If you own additional properties and they are in your name, then you have to disclose those properties when applying for financial aid.

Elfi BerzinsNovember 5th, 2010 at 3:51 pm

So does that mean we should change the owner of the 529 to a grandparents name?

Angelia CookeNovember 5th, 2010 at 7:46 pm

my daughters grandfather bought stock and put it in my daughters name and ss# with him as the custodian until she turns 21 does this need to be declared on the fafsa? she has never taken anything from it

LouieNovember 6th, 2010 at 10:01 am


You should contact Scott’s office and set up a free phone appointment with one of the advisors to go over your questions and concerns regarding financial aid. The office toll free number is 866-207-5545.

LouieNovember 6th, 2010 at 10:10 am


Regarding 529 plans. Scott is hosting an online video workshop on Thursday, November 11th, 2010. He will be discussing:

1. How to save for college even if you lose your job in the next 12 months.
2. What to do if your 529 or prepaid tuition plan is down by 25 – 40% or more.
3. How 529 plans count against you in the financial aid formula and what to do about it.
4. How to ensure your college savings plans are there when you need them without the ups and downs of the real estate or stock market.
5. How to avoid the 3 bigest threats to saving for your child’s college education.
6. And much more

If you would like to participate simply go to to register or contact Scott’s office and set up a free phone appointment with one of the advisors to go over your questions and concerns regarding 529 plans and paying for college. The office toll free number is 866-207-5545.

GinaJanuary 13th, 2011 at 4:15 pm

If I have 2 students in college, and my EFC for one is $30,300 and my EFC for the other is $30,100, does that mean they expect my family to contribute over $60,000 for these 2 kids??

Cathy EbenJanuary 17th, 2011 at 9:50 am

The answer is “yes”. Your total Family EFC is $60,400- based on the information from your FAFSA. If you do not feel this is a realistic figure, check the information on the FAFSA to make sure it is all correct. The next step would be to send a letter of special circumstance to your top colleges if you feel the information is not reflective of your actual financial situation. Special circumstances include items like; a loss of a job, a one time high income from a bonus or pension withdraw, high medical expenses or other extraordinary expenses. The school can then make a decision to lower the family’s EFC if they feel it is warranted.

Robert ThomasJanuary 17th, 2011 at 10:51 am

I have recently married and we are filing taxes for the first time together for 2011. My son is a Junior in high school so this year will be the tax return that most schools will be using. My question is will it make it easier for schools if I file Married filing seperately?

Cathy EbenJanuary 17th, 2011 at 1:37 pm

In anticipating college expenses, it does not matter how you file. Both of your incomes will be looked at together when applying for financial aid.

Robert ThomasJanuary 19th, 2011 at 4:56 am

That includes my sons step-mom?

AnneMarch 26th, 2011 at 9:00 am

Our EFC was $10,000 each for our two daughters but when we got the financial packages from their repsective colleges we received no financial assistance at all. What is the point of filling out the FAFSA if the EFC doesn’t mean anything?

tracey emersonMarch 26th, 2011 at 9:51 am

I would like to know the answer to this question from robert. Could you post?

DebraMarch 26th, 2011 at 9:51 am

My child’s 529 plan is in my husband’s name but for the benefit of my child. So when filling out the fafsa how would this be shown (as a parent asset or child asset)?

TEEMarch 26th, 2011 at 10:27 am

Unfortunately, the Govt punishes you for saving for college or being successful and having a high income. Parents who never made an effort to save money and live beyond their means, on welfare etc. get huge aid. Our society is all backwards.

For Gina above, with the EFC of 30k/child, you really wont get any aid unless she goes to a private school with a high COA, say 50k/yr. then you might get about 10K/yr in aid. You will still have to pay 40k/yr just for one child. And that aid will probably be a loan.

I’m in the same boat as you. Who can afford 80k/yr to send two kids to school?

Cathy’s advise above will not work for me, I have no special circumstance, my income is legit. From working and saving hard over 30 yrs.

No way I’m paying 80K/yr for school. Public schools are a joke in the State I live in ( California). Only exceptions are Berkeley and UCLA and then you cant get in even with a 4.0 plus GPA.

Actually, I told my kids to get started in trade school and I will give then each $100k upon getting a job and moving out.

I save $200k over 5 yrs . Every one wins.

Teri PachecoMarch 26th, 2011 at 7:34 pm

My hospital employer equals the employee’s contribution to our 403B, up to 4%. So, they give us free money for the future. Do we put this anywhere on the FAFSA? I haven’t used any of this money yet; I’m not retired. I think I did list this on the FAFSA somewhere! Help.

Alicia RichardsonMarch 28th, 2011 at 8:16 am

Hi Robert (and Tracey),

Yes, If you are the custodial parent and have remarried, your son’s step-mother’s income and assets will count in the financial equations. Financial aid formulas require all parents living in the household (regardless of whether they are biological, adoptive or step parents) to include their financial information.

Alicia RichardsonMarch 28th, 2011 at 8:18 am

Hi Debra,

The 529 does count as a custodial account and is reported on the FAFSA as a parent investment asset.

Alicia RichardsonMarch 28th, 2011 at 8:44 am

Hi Anne,

It is difficult to answer your question without knowing your full situation; mainly the type of colleges your girls were accepted to and the type of students your girls are will have a significant impact on financial aid. CPN recommends that everyone fills out the FAFSA at least the first year, because you never know… you could be awarded financial aid or your financial situation may change over the course of the year and you may be put in a position where additional aid is necessary to support your students continued attendance.

With that said, there are several factors that could have contributed to a college not meeting your need as calculated by your EFC. In a perfect world, yes if your EFC was calculated at $10,000, then that would be your only out of pocket cost, but, as we all know, we do not live in a perfect world and a majority of colleges do not meet 100% of need.

If you are looking at a public/state funded college, these colleges do not have the funding to meet students’ need because they are funded through the state. Unfortunately, the current trend is to cut funding to higher education when state legislatures are looking to ‘balance the budget’. This is why it is important to pick colleges that meet a high percentage of need and to apply to more than one college- this is just one of the services that our education team is able to help with as a CPN client. I have seen many times that the family’s out of pocket cost is less at a $50k a year private college than at a local state university because of the amount of financial aid available at each college.

At this point, my suggestion is to look into appealing for additional financial aid at the college(s) where you girls will attend. Or if your girls applied to multiple colleges wait for the other awards and compare packages to different schools.

Alicia RichardsonMarch 28th, 2011 at 9:01 am

Hi Tee,

I agree with your comments that the way financial aid is awarded is definitely bias against those who have been financially responsible. CPN cannot change the way financial aid is awarded, we only aim to assist families in maximizing the aid the aid available to them and preparing them with a plan of how they will pay once the bill arrives.

Each families’ financial situation is different and yes, there are families that no matter how we spin it, will not qualify for need based financial aid. In this case, CPN recommends looking for colleges that will offer the most merit based financial aid if you have a bright student and/or developing a plan for how to pay for the 4 years of college without having to fully deplete your hard earned savings.

It sounds like you do have a plan, which is good. I have actually heard very good things about community colleges in California and many have set paths to transfer into the more elite UC and CSU campuses after 2 years. This is certainly a great way to save in the long run.

Alicia RichardsonMarch 28th, 2011 at 9:08 am

Hi Teri,

Usually a non-elective employer contribution is not counted in financial equations. The FAFSA asks for the contributions that you made to retirement during the base year and does count that money as income (because you could opt not to make that contribution and use the money for college instead). The qualifying contributions will show up on your W2 forms in box 12, codes D, E, F, G, H and S. Some colleges do reserve the right to count non-elective employer contributions against you though.

Teri PachecoApril 5th, 2011 at 2:05 pm

Thank you so much Alicia for your reply!

Karli RichardsMay 10th, 2011 at 8:01 pm

My grandfather has a CD and Savings Account in my name but he is the custodian over this account until he dies. I can’t have any of this money until he dies. Do I have to show the amount of money in these accounts on my FAFSA? He controls both accounts, I can’t do anything to either one.

Cathy MickeyJuly 2nd, 2011 at 7:02 am

Im on Medicare, Disability, If I refinance my home with cash out, and spend this money will I have to report the cash out will I have to report this on FAFSA? If my daughter worked over the summer and spent all the money will this need to be reported? Thank you for your help.

CarrieJuly 3rd, 2011 at 8:59 am

Regarding the “special circumstances” letter to colleges…. is that a waste of time? I mean, do the Financial Aide staff at any school even care that my special circumstances for not having any savings (despite a halfway-decent salary) have to do with attorney bills for a custody suit? (wasn’t MY idea….believe me). No one cares about your personal family business. No one cares that $30k was wasted on attorney bills instead of sitting in the bank to give my son for college. The schools have hundreds of kids lined up ready to go to their school. Why would they care about just one? I wish I was unemployed, and I wish that I was a minority. Maybe then my EFC figure would be around $10k per year. No way can I afford $10k per year when I have barely anything in my 401K and I am 51 years old, single mother. Schools don’t care about that. It’s a business, after all. If the parent is not willing to put themselves deep in debt for many years and give up any hope of saving for their retirement, then…..I guess that parent’s child is not going to be able to go to college until they turn 24 and can move out with room mates and then file for Financial Aide as an Independent. I have a choice: either finish paying off all this laywer debt, then play catch-up with my 401K QUICK, or…. put myself deep deep into debt so that my son can attend college upon his highschool graduation. That is my choice. I have to decide what to do. There is no guarentee that the job I have now will still be there 12 years from now….so… with no savings, Choice 2 is very very dangerous.

Alicia RichardsonJuly 5th, 2011 at 9:48 am

Hi Cathy,

The FAFSA only looks at a snapshot of your financial situation so if you do not have the money from the cash out on hand the day you submit your FAFSA, it will not count against you as an asset. The same is true for the money your daughter earns from work. It will not count as an asset if she spends what she earns, but it will count against her as earned wages.

Alicia RichardsonJuly 5th, 2011 at 10:25 am

Hi Carrie,

You’re right; colleges are businesses and as with all businesses, their goal is to make money. As a parent who plans to invest in this business (through your student and hard earned money) you have to do a little extra work to make sure you are prepared and making an educated decision of where your student attends college.

In my experience, special circumstance letters do work, many of our appeal letters have resulted in tens of thousands of dollars added to an award, but there has to be good reason to appeal. Most basically, you have to show that something on the financial aid form(s) is not what it seems. In your case, explaining why you do not have savings, is not a special circumstance because the form already reflects that you have no/little savings and no asset amount is being counted against you. But, if you are currently paying on the debt, it may be counted as an unusual expense- usually you must pay more than 7% of your annual income on an expense for it to be considered “unusual”. But, smaller private colleges are more likely to consider your personal situation than larger colleges and it never hurts to explain your situation.

With this in mind, you may need to look at the colleges where your student plans to attend. If you will not qualify for need based aid, look for colleges where your student will qualify for enough merit aid to make the out of pocket cost affordable. Some families also find it beneficial to have their student attend a college close enough to home that they can commute; or attend a community college for 2 years then transfer to a 4 year university. There are many options out there; I would never advise you to go into more debt than you feel you can handle to pay for college.

It sounds like you could use a little extra help with this process. If you watch our free online workshop, you can qualify to speak with one of our Education Consultants for free. This would be a great opportunity to have some of your more specific questions answered. To register for the upcoming free college-funding online video workshop, simply visit for details and registration.

Barbara CartyJuly 6th, 2011 at 1:59 pm

I have a school loan debt of over $18,000 which I’m currently paying on. This was not noted on my son’s Fasfa. Would this be a good reason to appeal to the school for more financial aid? Also, my son has been unable to get a job so far and we did anticipate saving a certain amount from a summer job.

LoiseJuly 7th, 2011 at 8:38 am

I have confusion with 529 account. How do you change ownership from myself to a brother (also, what are the implications of this change tax-wise to my brother if these were withdrawn other than for education purposes?) and if the account is for the benefit of my daughter will these have to be reported as an asset/income of my daughter in FAFSA application? She’s only an incoming freshman high school, can I contribute more to earn interest and withdraw these in Dec 2012 to pay for my debts so it’s not an added income when I file tax when she’s close to College if it’s a better option for me to withdraw them for other needs? Thanks.

Alicia RichardsonJuly 7th, 2011 at 9:30 am

Hi Barbara,

Your student loan debt on its own is not usually considered a valid reason to appeal, but if your payments on the loan debt add up to more than 8% of your annual earned income, you may be able to appeal based on the out of pocket expense.

In regard to your son’s job, if he worked last year, that income was reported on the FAFSA and was used in the EFC calculation. If his earnings will be significantly less this year (usually a change of over 20%) due to his lack of summer employment, then you can use this in an appeal. Usually it is a change in parent income that will have the greater effect on your EFC- student income is usually so minimal that it is not considered.

Alicia RichardsonJuly 7th, 2011 at 10:00 am

Hi Loise,

Your question is not one I can answer easily on this site. I suggest you watch our free online workshop and them speak with one of our Education Consultants. To register for the upcoming free college-funding online video workshop, simply visit for details and registration.

John MacFebruary 10th, 2012 at 9:22 am

If I have a savings account for my son and or daughter but have my name on the account (mother) will it affect my kids financial aid

Cathy EbenFebruary 10th, 2012 at 1:10 pm

Hello John,
It is better to have the assets in the parent name rather than the student name since the government weighs student contributions more strictly. You are able to have a certain amount of assets that will not count against you, but that is dependent upon multiple factors such as income, number in your family and other criteria.

LoriSeptember 13th, 2012 at 6:39 pm

Where can I invest money from my savings account so that it won’t be considered as an asset in my EFC calculation. What about a Mutual Fund?

Jodi PolsterSeptember 14th, 2012 at 10:38 am

Hello Lori,
To answer your second question, Mutual Funds are an includable asset on the FAFSA. You would need to include any money in a Mutual Fund as an investment on the FAFSA. I would suggest speaking to a College Funding Advisor to best determine where to invest savings that will not impact your EFC. There is not one answer since each family has their own unique financial situation. I would suggest contacting the College Planning Network’s office at 866-207-5545 to schedule a free one-hour consultation. During that consultation you will review your specific situation to determine what college financial planning would be best for your family.

RissiJune 26th, 2013 at 10:47 am

I live off campus and want to devote more time to course work than employment. My grammy is willing to pay my rent while I’m in school. Will this increase my EFC as she’d be gifting me or paying money on my behalf?

Jodi PolsterJune 27th, 2013 at 1:37 pm

Hello Rissi,
There is a question on the FAFSA that asks for “Money received, or paid on your behalf (e.g., bills), not reported elsewhere on this form”. The amount listed for this question may increase your EFC but please note there are many different factors that determine an EFC.

EllenJuly 1st, 2013 at 2:52 pm

Husband and I have saved for years for college expenses. Some of money has been in mutual funds which we reported on FAFSA and CSS Profile as assets. We recently took money out of mutual fund to pay for private college tuition and fees. Sold mutual funds at a loss. I realize capital gains and dividends are assessed as income for purposes of financial aid but college now says entire withdrawal of mutual fund counts as income! Our EFC went up by $14,500 because we took our investment of $19,000 out of a mutual fund. We are appealing. Curious if you have ever heard of this and what we could do if we don’t win appeal.

Noel JohnsonJuly 10th, 2013 at 2:09 pm

Hi Ellen,
We do see situations very similar to yours. The school may not accept the appeal this year, however next year your EFC is going to be $14500 lower and a preemptive letter to that school to outline the increase from this year could assist. I would recommend scheduling a free consultation with and Education Consultant at 866 207 5545. The education consultant can discuss your family’s situation and help you to receive the best financial award package for your situation.

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News,, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.