If you find yourself in need of financial aid, there are four things you need to know in order to determine your chances of receiving aid.
1. Federal methodology versus Institutional Methodology
2. Student Profile
3. % of Need Filled
4. Typical Financial Package
I work in this area everyday and these are the most important factors for determining the level of financial assistance you will receive.
More than 90% of the colleges and universities use the Federal Methodology for determining a family’s Expected Family Contribution (EFC). However, some colleges use Institutional Methodology or CSS Profile. It is important to know what methodology the schools you are applying to uses because your family EFC will be different under the two different methodologies.
Further, you may want to use an on-line EFC calculator to see what your unofficial EFC is prior to applying for financial aid. It will help you know how much your family will be expected to contribute to your student’s education before you receive any potential financial aid.
Second, you need to understand how your child fits into the college’s target population. Is she going to be the big fish in the pond? Or is like everyone else who applies? Your best chance of receiving merit based financial aid is if your child stands out in some way.
For example, last year I was talking with some parents who had a child who was a world class fencer. Now there are not many schools that have fencing team, but the few that do would welcome a world class fencer into their freshman class. So think about does my student have something to add to the freshman class? If she does, it increases the chance of receiving a favorable financial aid package based on merit.
The other way to qualify for merit based financial aid is for your student to be in the top of a class. Colleges release the demographics of their last freshman class each year. If your student would fall in the top strata of a freshman class, she has a good chance of getting a great financial aid offer. Knowing how your student ranks against the other students who are applying to college puts you ahead of other parents who just have their kids apply with no idea where they place.
Third, not all colleges can afford to pay all the financial need your family may have above your EFC. What that means is, suppose your EFC says that you can afford to pay $10,000 and you will have an unmet need of $15,000. Not all schools can afford to put together a financial aid package that meets the entire $15,000 of unmet need. Some colleges may only be able to offer to meet 70% of the unmet need. Meaning you are on the hook for an additional $4500 – making your total contribution, instead of $10,000 equal to $14,500.
Which makes my fourth point even more critical. If you know what the typical financial aid package awarded at the college of your choice, you can make a determination before your daughter falls in love with a college that it’s not a good fit for your finances.
As a family, it is important to find colleges that are good academic and financial partners. A college is a good financial partner if they have the resources to provide most, if not all, of your financial need above your EFC. Colleges are also good financial partners if the financial aid provided comes primarily from grants and scholarships (free aid) rather than student loans which have be paid back by either the students and/or parents.
Doing your homework now prior to applying for financial aid will keep you from being unpleasantly surprised when the financial aid award letters arrive in the spring.