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What Determines Your Financial Aid Package?

Written by CB Experts

A full ride to college and the sky’s the limit? Is that what you are thinking when you apply to a high-priced college and seek financial aid? The reality is that less than 3% of colleges provide enough financial aid to cover all the costs of college, and even then that happens only if you are a US citizen and met the school’s financial aid deadline.

How is a student’s financial aid package figured? A college always starts with the information on the student’s Free Application for Federal Student Aid (FAFSA). Private schools also use information from another financial aid application, the College Board’s CSS/Financial Aid Profile. The information on these two applications is used by each college to calculate, each with different formulas, what the Expected Family Contribution (EFC) is. When the EFC is subtracted from the cost of the college—which includes room, board, books, travel, and miscellaneous expenses–you are left with the student’s need.

Each school will also meet student need in different ways, and a financial aid package is made up of various combinations of loans, work study, scholarships, and grants. Remember that only scholarships and grants are gifts. The rest means work and loan repayments.

To understand what a school might offer you in financial aid depends on their policy for treating student needs. If you have been accepted to several colleges, it might be worth your time to find out what those policies are before making a decision about where to go. And, don’t wait too long to get the financial aid offer. You can predetermine pretty well which school will give you the best financial aid help when you know how they handle the following:

• Some schools require families that make under $180,000 to contribute no more than 10% for the EFC.
• Some schools figure college costs at a higher level. The average should be between $1,400 and $2,000.
• Some schools never ask low-income students to take out loans and offer only scholarships, grants, and work study.
• Some schools expect a $1,000 contribution from the student’s earnings.
• For some schools home equity does not count in determining the EFC.
• Some schools offer merit scholarships, which are based on student qualification only and are blind to family income.

• Different schools handle divorced families in different ways. Some only look at the custodial parents’ incomes, some at the original parents’ incomes, and some at all incomes, both parents’ and step-parents’.

If you ask each college to tell you how they figure the factors above in determining financial aid, you will have a good idea how to weigh one possible offer against another, giving you a leg up in deciding what college will be most affordable for you and your family.

About the author

CB Experts

Content created by retired College Admissions consultants.