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“Even though financial aid was originally intended for those who needed it most; it actually goes to those who know the most about the process.” — US News and World Reports

Financial Aid Basics

There is a simple formula that is used to determine whether or not a family qualifies for need-based financial aid at a college.

Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need

Cost of Attendance (COA)

Includes tuition and fees, room and board, books, supplies, personal expenses and travel.

Expected Family Contribution (EFC)

This is the amount that you are "expected" to contribute toward the cost of college. In other words, it's how much the government thinks you can afford to contribute toward college costs. This is used to determine a student's eligibility for federal and in most cases state-funded student aid. The formula for determining this amount takes into account a family's (parents and student) income, assets and other relevant variables. This information is submitted on the FAFSA (Free Application for Federal Student Aid) form.

Financial Need

To determine whether or not you qualify for need-based financial aid at a specific school subtract your EFC from the school’s COA. If the COA is greater than your EFC, you are a candidate for need-based financial aid.

Determining financial need is one of the important factors to consider when identifying appropriate and effective strategies for a personalized college funding plan that will make college affordable for your family.

Financial aid is money awarded by colleges to help students cover the cost of their college education. This funding may be provided by any combination of the following organizations: the federal government, the state government, and/or the college itself.

There are two basic types of financial aid available:

  • Self-Help which consists of loans and work-study.
  • Gift Aid which consists of grants and scholarships.

Both the demonstrated financial need and the merit of the student (scholastic, athletic, performing arts talent, etc.) will determine the amount and type of financial aid offered by a college.

The case study below compares the cost of attending a private university versus a public university for a family whose FAFSA EFC was calculated to be $15,000.

  • PRIVATE University
  • COA: $50,000
  • -EFC: $15,000
  • Need: $35,000
  • 95% of Need is Met
  • Gift Aid: 80%
  • Self-help: 20%
  • EFC: $15,000
  • + Unmet Need: $1,750
  • TOTAL COST: $16,750
  • Total Gift Aid: $26,600
  • Total Self-help: $6,650
  • PUBLIC University
  • COA: $25,000
  • -EFC: $15,000
  • Need: $10,000
  • 50% of Need is Met
  • Gift Aid: 40%
  • Self-help: 60%
  • EFC: $15,000
  • + Unmet Need: $5,000
  • TOTAL COST: $20,000
  • Total Gift Aid: $2,000
  • Total Self-help: $3,000

The ability to meet the financial need of a student varies from school to school. In this example, the private school meets 95% of the demonstrated need while the public school is only able to meet 50%. Also, of the aid provided by the private school 80% was Gift Aid (“free” money) and 20% was Self-help (loans and/or work study). The public school was only able to offer 40% Gift Aid plus an additional 60% Self-help aid. The family’s total upfront cost is calculated by adding their EFC and the amount of unmet need. This is the amount the family will be required to pay each year.

Notice that although the private school has a COA that is $25,000 greater than the public school, the total annual out-of-pocket cost at the private school is $3,250 less than the public school. This is because the private school had more financial aid resources available than did the public school.

Our goal is to help maximize your student’s overall financial aid package with a greater percentage of Gift Aid (“free” money) than Self-Help Aid (loans and work study).