financial need

"What Is Financial Need?"

The term "financial need" is simply the amount of money you will need to finance your child's college education. How do you figure this out?

First you need your "Expected Family Contribution" or EFC. This is the amount you and your parents can reasonably contribute to your education.

The government or colleges will look at your parent's salaries, savings, assets, and debts to determine how much they can afford to pay. Your assets (i.e., earnings from your summer job) will also be figured into this equation.

From this number will be subtracted the "Cost of Attendance" or COA. This is simply the estimated annual cost of the college including tuition, room and board, books and supplies, and travel expenses from your home to school.

So we get something that look like this:

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

Financial need expresses the amount of money you will need to go to school.

So all the forms that you will fill in will basically be used to determine how much money your family has and how much they can "reasonably" afford to put toward your education. Of course, what is considered "reasonable" by the government or college may not seem so to your family!

"How Do I Qualify?"

Financial Aid takes many forms. Scholarships may be awarded for academic merit, achievement, leadership, artistic talent, and/or athletic prowess.

Grants may be based on financial need or your attractiveness to an admission committee.

Loans may be based on family ability to pay or just on enrollment.

"So how do you maximize your eligibility for financial aid?"

We'll agree that you are most interested in "gift" aid - that is, money that does not have to be paid back. Federal gift (and subsidized loan) aid is usually need based. It uses the formula above, that is quite straightforward and looks at family income and assets, family size, and the number of family members in college to determine eligibility. There are, however, a few places you can influence your eligibility:
  • Assets held in a parents name count much less than assets held in the student's name.
  • Home and retirement assets are not counted; though other non-retirement assets are included in the formula.
  • Multiple siblings attending college at the same time increase your eligibility.
  • Are your parents supporting other dependents? Grandparents? Family size is important in determining your eligibility.

Your college of choice gift aid may use completely different criteria than the government. Don't be shy about telling everything in your application to the admissions committee. They are looking for students who will make a difference while in school, and will also make them proud after graduation. This includes the genius, the creative artist, the talented athlete, the community service-oriented leader, the geographically and the ethnically diverse.

Of course, there are some things you just can't change, i.e. your ethnicity or your IQ. However, you can show your community spirit through volunteering, working at your local nursing home, feeding the poor on Thanksgiving, or working in a tutoring program for young children in need.

Do you have artistic or performance talent? Keep a portfolio of your work from high school. It will help others to assess your special ability. Be prepared to audition for some awards.

There is no magic to qualifying - the magic is in learning what is available and applying for everything, even if you think you may not be eligible. Rules change and deadlines change. Apply even beyond the deadline if you find something late. This is hard work - it requires organization, perseverance, and follow though. However, the returns can be significant.

Thank you for visiting,

Al Brouillard

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