Financial Need and Aid Volatility among Students with Zero Financial Need and Aid Volatility among Students with Zero Expected Family Contribution Expected Family Contribution (2015)

Students with a zero expected family contribution (EFC), as calculated using the Free Application for Federal Student Aid (FAFSA), are those with the greatest financial need and least ability to pay for college, and they now make up more than one in three U.S. undergraduate students. Yet little is known about the year-to-year financial aid volatility of these students, or whether it varies by how the zero EFC was determined. This paper uses nationally representative data to examine trends in zero-EFC receipt over time and then use studentlevel data from nine colleges and universities to examine zero-EFC stability over multiple years by zero-EFC status. The results indicate overall stability in zero-EFC receipt across multiple years; about eight in ten students with a zero EFC keeps that status one year later. However, this masks a great deal of heterogeneity among zero-EFC recipients by dependency and FAFSA filing statuses. These differences have significant policy implications for allocating scarce financial aid dollars.