The Free Application for Federal Student Aid (known as FAFSA), is a form that must be filled out annually by university students (both undergraduate and graduate) and sometimes their parents in the United States to determine their eligibility for federal financial aid (including grants, loans, and work-study programs). In addition, most states and schools use information from the FAFSA to award non-federal aid.

The FAFSA consists of numerous questions regarding the student's finances, as well as those of his or her family; these are entered into a formula that determines the Expected Family Contribution (EFC). The amount of the EFC can vary widely, depending on a number of factors; for example, one such factor is whether a student has siblings in college at the time.

Other entities, such as the specific college or state of the student, may also use some of these responses to determine if the student is eligible for school or state aid, in addition to federal aid.

A Student Aid Report (SAR), which includes a summary of the students financial aid formation and the EFC, is forwarded to the schools listed by the student as well as the student. These schools then use the SAR to determine what financial aid package (if any) to award the student.

An Expected Family Contribution (abbreviated EFC) is an amount of money that the Federal government assumes that a student and his or her family are able and willing to pay for higher education. It is calculated by putting the student's income and assets, and those of the student's parents if the student is considered a dependent, through one of three different formulas, depending on whether the student is considered a dependent, is independent without dependents, or has dependents of his or her own.

Typically, need-based financial aid, including loans and grants, will cover the cost of attending college minus the expected family contribution.

Certain students are eligible for an EFC of 0, depending in part on which tax form they and their parents used during the previous year. To qualify for an EFC of 0, the student, parents, and/or spouse must all have been eligible to file their taxes with IRS Form 1040A or 1040EZ. For dependent students, their parents' combined income must be less than $16,000 per year.

For independent students, their own income and that of their spouse must be less than $16,000 per year, and they must have non-spouse dependents, such as children.

Independent students who have no children or other non-spouse dependents will have a positive EFC, which can amount to as much as 20% of their income, even if they make as little as $10,000 per year.

The student is considered a dependent unless one of the following criteria is met:

• The student is over the age of 24.
• The student is enrolled in a post-graduate program.
• The student is married.
• The student has children, or other non-spouse dependents, who receive more than half of their monetary support from the student.
• The student is an orphan or ward of the state.
• The student is a military veteran.

Financial Aid Information: Inside
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