How to Estimate Need-Based Financial Aid
The cost of college continues to rise, and there is no end in sight. As such, many families are left wondering how they are going to pay the rising cost of college. In an effort to avoid taking on tens of thousands of dollars in college student loans, families often rule out colleges based on their sticker prices when putting together application lists. However, there are ways to estimate the cost of college specific to your family that would better allow you to put together a school list of affordable colleges without needlessly ruling out schools that could provide need-based financial aid.
Estimate Need-Based Financial Aid
Let’s take a look at financial need, how you can estimate your college costs and use that to better plan your college school list.
Check out our free FAFSA Guide >>
How is Financial Aid Eligibility Calculated?
Here is the formula used by schools to determine a family’s need for financial aid.
Cost of Attendance (COA) − Expected Family Contribution (EFC) = Financial Need
What is Cost of Attendance (COA)?
Cost of attendance is the amount it will cost to send a student to college for a given aid year. Here are factors that add up to determine a student’s total cost of attendance. This is generally calculated for a full school year (ex. Fall and Spring semesters for first year):
tuition and fees
the cost of room and board (or living expenses for students who do not contract with the school for room and board)
the cost of books, supplies, transportation, loan fees, and miscellaneous expenses
What is Expected Family Contribution (EFC)?
FAFSA’s Expected Family Contribution (EFC) is a number that is derived from the information you provide when completing your FAFSA. The federal government refers to the EFC as an index that helps determine your federal financial aid eligibility. This is used to determine need-based grants like the Federal Pell Grant as well as state grants that don’t need to be paid back. EFC also determines your eligibility for subsidized Direct student loans.
Some schools also require the CSS Profile, which results in a proprietary expected family contribution that can be unique school-to-school. This is why you may receive different need-based award offers.
Using Need Eligibility to Determine Financial Aid Award
Once a school has a family’s cost of attendance and expected contribution, they are able to determine the family’s financial need. This financial need is used to determine how much need-based financial aid a family will receive. Some schools don’t have institutional need-based aid to provide beyond what is offered through federal and state grant programs. Other schools do have institutional need-based aid and are able to cover a portion of a family’s financial need using their college grants. This can be anywhere up to 100% of your need expressed.
Free College Cost Calculators
College cost calculators are free tools that allow you to estimate the cost of college. By inputting similar information that you will use to complete financial aid applications, you can use these free tools to get a sense of what a range of colleges will cost your family. This is most useful in the case of need-based financial aid.
You can use the calculators and other research tools to learn what you can expect from different types of colleges. There are four general types of schools for financial aid purposes: in-state public, out-of-state public, private schools that offer a mix of merit-based aid AND need-based aid, and private schools that only offer need-based aid.
Use the following tools to get a sense of what you can expect from colleges specific to your family’s financial profile:
Using College Cost Calculators to Determine Need-Based Aid
These tools take your personal financial information specific to your family and provide you with an estimate of the need-based financial aid you will receive at colleges.
Check out our free CSS Profile Guide >>
There is a lot to be gained from our free general financial aid advice, but it’s also a very individual process. If you have remaining financial aid questions, email us to discuss more or book an individual session.