College Aid: What is a Family's Financial Need?

Families apply to college, complete financial aid forms, and ultimately receive financial aid award letters as they weigh their options. But how do schools take the information provided on financial aid forms to determine a family’s financial aid award? One aspect of this process is determining a family’s financial need. Financial need is one factor that helps determine a family’s financial aid award.

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College Aid: Financial Need

Let’s take a closer look at how colleges calculate a family’s financial need to determine their aid award.

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.

Financial Aid Negotiation: How To Get More Financial Aid >>

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.

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Non-Custodial Parent CSS Profile Waiver: Required Documentation