College Financial Aid Changes for 2011-2012

The Department of Education recently announced numerous adjustments to the Federal Need Analysis Formula. This is the calculation that takes information from the Free Application for Federal Student Aid (FAFSA) and determines the expected family contribution (EFC). The EFC is the amount each college uses to award federal need-based financial aid.

For 2011–2012, the Income Protection Allowance for a dependent student has jumped from $4,500 (for 2010–2011) to $5,250 (for 2011–2012). This is the amount of income a dependent student may earn in the 2010 calendar year before excess income impacts the EFC. Parents of a dependent student are also permitted an Income Protection Allowance based on the family size and the number of dependents in college.

Certain students qualify for a zero EFC, meaning their families are not expected to contribute anything toward the cost of higher education, and thus they are eligible for more financial aid. For the 2011–2012 award year, the income threshold to be eligible for a zero EFC is $31,000, up from $30,000 in 2010–2011.