Content Areas

To earn this credential, you will need to know the underlying principles of Title IV need analysis leading to the determination of a student’s expected family contribution (EFC), including the three regular formulas used to calculate the EFC and the qualifications for the Automatic Zero EFC and the Simplified Needs Test. You also will need to know how to recalculate the EFC for enrollment periods other than nine months and for summer periods of enrollment. This will enable you demonstrate the ability to ensure the use of accurate and appropriate EFC calculations, which directly affects the equitable distribution of financial aid funding. 

The range of topics in this test include:

• General Concepts of Need Analysis
• The Regular Formula
• The Simplified Formulas
• Recalculating the EFC

Tests may include questions pertaining to a variety of program structures, such as credit- or clock-hour, term or nonterm, standard or nonstandard term, undergraduate or graduate/professional programs, and programs of various length (shorter than one year, two-year, four-year, certificate, etc.).

Sample Test Questions

All tests will include a combination of multiple-choice and scenario-based questions. Some questions may involve viewing or downloading worksheets, charts, and tables. Please ensure you have a calculator available while taking a credential test.

Review the following examples, which are similar in structure and scope to the questions that will appear on the test for this topic. Check your answers by selecting the question's link.

1. If a dependent student qualifies for the simplified needs test, then

• only student assets will count toward the primary EFC.
• only parent assets will count toward the primary EFC.
• neither student nor parent assets will count toward the primary EFC.
• both student and parent assets will count toward the secondary EFC.

2. The primary EFC will always be __________ the secondary EFC.

• more than
• more than or equal to
• less than
• less than or equal to

3. A 26-year-old student completes the FAFSA. Her total income is $26,000, she was required to file a Form 1040, and she is not married and has no children. Her parents’ income is $49,000 and they completed a Form 1040A. Which formula will be used to calculate this student’s EFC?

• Simplified Formula A
• Regular Formula B
• Regular Formula C
• Automatic zero EFC

4. The first ISIR for a dependent student shows a parent available income of $53,000 and a discretionary net worth of $11,000. The student makes a correction to the FAFSA and the only change on the second ISIR is that the age of the older parent changed from 45 to 54. The EFC on the second ISIR will

• be the same as the EFC on the first ISIR because the income and assets didn’t change.
• decrease because the amount of the Education Savings and Asset Protection Allowance will increase.
• increase because the parent is older.
• not be calculated until the CPS reviews and resolves the conflicting information.

5. You receive an ISIR for a dependent student listing one parent’s information. The student did not qualify for either of the alternate formulas. The parent has a negative adjusted available income and a net worth of $2,012, and the student had income of $17,250. Subsequently, you approve a dependency override appeal for the student. The EFC on the new ISIR, which reflects the student’s independent, is higher than the original EFC when the student was dependent. What is the most likely explanation for why the EFC increased?

• The student has a lower income protection allowance with Formula B than with Formula A
• The student has a lower social security tax allowance with Formula B than with Formula A
• The student no longer qualifies for an automatic zero EFC
• The student’s income is no longer reduced by the parent’s negative adjusted available income

Recommended Resources

Prepare for this test by reviewing related content in resources such as:

• Higher Education Act of 1965, as amended (view U.S. Code Title 20, Chapter 28)
• Federal regulations (view NASFAA’s Compiled Title IV Regulations)
• U.S. Department of Education guidance:
• Dear Colleague Letters
• Electronic Announcements
• Federal Student Aid Handbook
• Search for "ISIR Guide" in the FSA Knowledge Center Library

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