Aid Eligibility

The financial need formula simply stated is: College Cost - Expected Family Contribution = Financial Aid Eligibility (that is, your financial need). Colleges determine the cost at their institution (including tuition, room, board, fees and about $2000 for other personal expenses) and they subtract the EFC to establish your maximum aid eligibility. Higher cost should equate to higher eligibility, since the expected family contribution remains the same.

Colleges also determine their "aid packaging" policy. This policy drives the composition of your total aid ? gift, loan, and work. Growing competition for students means that many colleges provide students more desirable aid packages (more gift aid) if they have characteristics desired by the college (high grades, leadership, talent, etc). Since aid packages may vary significantly, it pays to compare offers from several colleges.

Loans are counted as financial aid but must be repaid after graduation. An offer of part-time employment on campus should not be rejected outright. Many students have found that their jobs have actually helped their adjustment to college and can lead to experiences that enhance post-graduation work or study opportunities.

Financial aid programs normally require a renewal application annually. Eligibility may change due to family changes (income, divorce, number in college, etc). The deadlines for renewal aid are usually later than for freshmen or transfer students - be sure to check with your college for specifics.

Fact or Fiction

Some "myths" regarding the aid application process persist:

Myth: Families with assets will probably not be eligible for aid. Major assets like retirement funds and the home are not considered in the calculation. Family income and size are still the biggest factors. 35% of student assets are considered to be available for each school year, but only 5.6% of parent's assets, so it is normally not wise to shift family assets into the student's account.

Myth: A student can claim independence from the family and receive more aid. The rules make it very difficult for undergraduate students to not have the parents' "ability to pay" taken into consideration.

Myth: Dishonest applicants are rewarded for falsely reporting income and assets. Financial information is subjected to verification by most colleges (tax return) and violations are subject to loss of aid and other penalties.

Myth: Lots of aid goes unused. Most colleges are challenged to make gift aid sources stretch to meet the demand. Private scholarship search companies promote their service by encouraging the idea of uncovering pockets of unused gift aid. The fee paid is normally not worth the service received. Using free services like fastweb.com is the best way to conduct a search.

The Bottom Line