top of page
  • Writer's pictureSteve Coker, CFP

Paying For College - A FAFSA Primer

Paying for college is one of the most significant expenses that many households face, after retirement, and housing. If you have a kid in college as I do, or you are about to start the journey of paying for college, then you should become well acquainted with the FAFSA, “Free Application for Federal Student Aid,” from the U.S. Department of Education. This form is required by most schools as the backbone of the financial aid application process. Even if you do not anticipate receiving need-based aid, there are benefits to completing the FAFSA as most schools require the form for things like work-study and scholarships.

The aid that you are eligible to receive is calculated using a complex set of rules, but the fundamentals are fairly straightforward. The FAFSA is based on two major factors: Cost of Attendance (COA) and Expected Family Contribution (EFC). COA less EFC equals Financial Need. Financial need determines how much need-based aid a student is eligible to receive.

COA – EFC = Financial Need

Cost of Attendance includes things like tuition and fees, books, supplies, transportation, room and care, dependent care, and even study abroad expenses. Common expenses that are not allowed include free room and board, room and board for a less than half-time student, or tuition that is not paid by the student (so if Grandma pays the bill you can’t include the cost). COA is also reduced by Non-Need based aid such as athletic scholarships and academic scholarships already offered by the school.

Expected Family Contribution is based on a complex set of rules very much like completing a tax return. Assuming that the student is a dependent, the big picture is that the EFC will be based on:

1) Parents Income

2) Parents Assets

3) Students Income

4) Students Assets.

Each of these four dollar figures will be calculated and then a contribution percentage applied to each to determine the EFC. As you would expect, the higher your income and assets, the greater the department of education will expect you to contribute.

Completing the FAFSA can be daunting. Here are a few ways to get help with pulling it together:

  1. FAFSA on the web. The Department of Education has a fairly robust website at

  2. FAFSA Hotline: 800-433-3243 allows you to ask specific questions regarding your FAFSA application

  3. Use an online tax tool. One of my favorites is If you use Tax Act to complete your tax return, you can simultaneously generate a FAFSA form, saving you some time and headache.

  4. Ask your CPA or tax preparer. Many now offer help with preparation of the FAFSA form along with your tax return.

While understanding the FAFSA does take some time, understanding how the process works can help offset some college costs, and save a lot of money and headache in the long run.

For more information, please click on the links below:

Join our mailing list and

never miss an update

bottom of page