Federal Central Processor (FCP)
The federal government’s computer system that analyzes the information on your FAFSA and calculates your Expected Family Contribution (EFC) is called the Federal Central Processor. The Processor calculates an estimate of your EFC for one academic year using what is called the "Federal Methodology".
Federal Methodology:
The Federal Methodology (FM) is a need analysis formula used by the federal government. It takes into account family income, assets, household size, and the number of family members attending college and other information provided by each student on the FAFSA. The Federal Methodology is used to determine eligibility for federal / state financial aid, as well as for institutional aid at some colleges. It also, determines a student's eligibility for federally sponsored financial aid such as Pell Grants, Perkins and Stafford loans, and Federal Work-Study programs
The FCP sends the results of this analysis back to you in the Student Aid Report (SAR), and prepares and sends the need analysis report to the colleges you designated on your FAFSA form.