Calculating Costs and Financial Need

Due to the rising costs of post-secondary education, more than 80% of college students utilize some form of financial aid to help pay for college. Assistance comes from a variety of sources: Federal and state governments, public and civic organizations, and colleges and universities all provide resources to students. This section provides an overview of how a college creates an award package.

To qualify for financial aid, students must complete the Free Application for Federal Student Aid (FAFSA) for federal sources of financial aid and possibly other applications for institutional or privately sponsored programs. Check with your school to learn which applications are required.

A school's financial aid office generally determines the programs and amounts of aid an applicant receives. This involves determining the cost of attending the college, calculating a student's Expected Family Contribution (EFC), and then awarding aid to meet the difference between the two - the calculated financial need.

College's Costs: Schools will generally publish cost information in their admission materials and on Internet sites. Along with costs that the school directly bills the student such as tuition, fees, and room and board (for on-campus students), the college also determines standards for other items like books and supplies, transportation and other personal expenses. Together all of these cost items make up a student's "Cost of Attendance"

EFC: According to federally legislated calculations, submitting the FAFSA allows the determination of an Expected Family Contribution. This is the amount calculated by the federal government (based on the student's and family's income, number of family members, number of college student(s), etc) that the family is expected to be able to pay towards educational expenses over a year's enrollment.

Federal EFC: The EFC also serves a secondary purpose. Some aid programs use the EFC as an "eligibility index" - that is, if the student's EFC falls in a certain range he/she is eligible for a particular aid program/award amount. The Federal Pell Grant, for example, is awarded on such a basis.

Click here to calculate an unofficial EFC (provided by The Financial Aid Information Page)

Institutional EFC: Some colleges additionally calculate a second EFC. This "Institutional Methodology (IM)" EFC often takes additional factors (such as home ownership) into consideration. This IM EFC is then used to allocate awards of institutionally sponsored aid programs. 

Financial Need: The financial aid office will typically subtract the EFC amount from the cost to derive the amount of financial aid the student "needs" to afford that particular institution.

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Awarding Financial Aid