Financial Need and Income Volatility Among Students With Zero Expected Family Contribution

• In Event: P-20 Education Finance

Abstract

In this paper, I examine students who have a zero expected family contribution (EFC) toward paying for college. While these are the most financially vulnerable students, there are important differences in income volatility and family resources based on whether the EFC was assigned to them based on household income or through the federal need analysis calculation of the Free Application for Federal Student Aid (FAFSA). Students assigned an automatic zero EFC are more likely to keep a zero EFC the following year, suggesting very persistent poverty among these students. I also discuss calculating negative EFCs, which may better reflect a student’s financial strength and may be a mechanism for better financial aid targeting.

Author

• Robert Kelchen, Seton Hall University