The U.S. Congress and the Department of Education have established the basic parameters under which eligibility for financial aid programs is calculated. When a student submits their FAFSA, the information goes to the FAFSA’s Central Processing System. Once there, the FAFSA data is run through analysis and a calculation to yield the student’s EFC, or Expected Family Contribution. This information is then forwarded to the school(s) the student listed on their FAFSA to be used in awarding.

But how does the U.S. Department of Education come up with your EFC? They take the information you’ve submitted on the FAFSA, make some initial assessments of the data, and then run it through one of several calculations. Which calculation is used depends primarily on your dependency status. 'Dependency' for financial aid purposes is not the same thing as 'dependency' for IRS tax purposes. A student is considered a dependent in the financial aid world unless they are older than 24, are a graduate student, are married, have dependents of their own, are a veteran, or are an orphan or ward of the court.

Once your dependency status has been determined by data you submitted on the FAFSA, your EFC will be calculated according to the appropriate formula, using the financial and demographic information you provided on your FAFSA. To find out more about how the EFC is determined, and to see the actual worksheets used in the federal methodology, please see the EFC Formula Guide.

Once the Federal Processor has calculated your EFC, they forward this information along to UT Austin. UT takes your Cost of Attendance and subtracts your EFC from it to determine your financial need. Our office makes every attempt to award you in financial aid programs up to your financial need, and usually even up to your Cost of Attendance (in non-need based loans).

In general, students whose FAFSA data shows them to have the greatest financial need have the most eligibility for grant, work-study, and subsidized loan programs. The particular awards a student is eligible for depend on the rules which govern the award programs. For example, the Federal Pell Grant is only available to undergraduates seeking their first degree, and the Stafford loan program limits student to borrowing a certain amount in an academic year.

So, given the student’s financial need and the limitations on the aid programs available, UT Austin awards eligible students with grants first, then work-study, then loans. Some students may qualify for all three, and other students may only qualify for loans. (If a student receives outside scholarships or funding from another source, their financial need will decrease, and their other awards may have to be adjusted. Please notify our office as soon as you know you’ll be receiving an outside scholarship!) We will notify students about the types and amounts of awards they are eligible for on an E-FAN.