Need-Based Financial Aid

By Frances Fee, Financial Aid Expert

The majority of college students receive some form of need-based financial aid.
Financial aid is funded by federal and state programs, college and university aid, and outside private scholarships. This aid is intended to supplement, not replace, the financial resources of the family.

There are two types of need-based financial aid – gift aid and self-help aid. Gift
aid consists of grants and scholarships. It is aid that does not have to be repaid and does not require a work commitment on the part of the recipient. Self-help aid,
however, does require either repayment or a work commitment. Self-help aid consists of student loans and student employment through either federal, state, or institutional work-study programs. Additionally, a student contribution from summer earnings is expected at many colleges.

For a student to be awarded need-based financial aid, families must demonstrate through the financial aid application process that there is financial need. Financial need is defined as the difference between the cost of attendance at a particular school and the amount the family is expected to pay for these costs (the expected family contribution). The cost of attendance varies by the type of school and costs associated with a particular school. It includes the direct costs of tuition, room and board, and required fees, as well as the indirect costs of books and supplies, personal and miscellaneous expenses, and transportation. While the cost of attendance will vary from one school to another, the expected family contribution (EFC) theoretically remains constant.

Cost of Attendance

– Expected Family Contribution

Demonstrated Need

In order to determine the expected family contribution, schools require financial
aid forms to be submitted. All schools will request the FAFSA (Free Application for
Federal Student Aid) and some private colleges will request the CSS Profile or their own institutional form. In the case of separated or divorced parents, colleges requiring the CSS Profile will usually also require the Noncustodial Profile. Many colleges will ask for federal tax forms and W2s, and supplemental forms may also be required.

After the financial aid forms are submitted, the expected family contribution is
calculated using a process known as need analysis. Financial aid is based on the premise that parents have the primary responsibility to pay for the education of their dependent children, and thus parental income, taxed and untaxed, and parental assets will be considered. Students are also expected to help pay for their educational costs, and thus student income and assets will be considered. Families are evaluated according to their present financial situation, and the financial information reported is that of the calendar year prior to the academic year for which aid is being requested.

If a family’s situation is such that the numbers themselves do not accurately
represent the family’s financial situation, it is advisable for the parents to write a letter to each school to which the student is applying clearly explaining the family’s financial circumstances. Perhaps a parent has been laid off or furloughed, or perhaps a family has high medical expenses, costs for family members not living in the home, private school tuition for younger siblings, or other extenuating circumstances which could affect the family’s ability to contribute to college costs. In such situations, financial aid officers will often use professional judgment in order to calculate a just award.

After the need analysis calculations are made, the financial aid administrator will
package aid for each eligible student. It is the financial aid administrators’ responsibility to equitably and fairly distribute limited funds. The financial aid officer will combine the various types of aid to meet all or a portion of the student’s financial need depending upon the availability of funds at any given school. Some schools guarantee to meet 100% of demonstrated need. However, many schools have limited funding available and often must leave unmet need. For schools that do not guarantee to meet 100% of demonstrated need, award offers may be based on need and merit with the strongest awards going to the most preferred applicants. Thus, stellar students may receive an award offer which meets full need, while other students may receive an award offer which leaves unmet need.

Demonstrated Need

– Financial Aid Award

Unmet Need or Gap

The financial aid office informs the student of his/her aid eligibility via an award notification, often called the aid package. The award letter includes the cost of attendance, the expected family contribution, and the award amount from each aid program for which the student is eligible. Most schools inform prospective students of their financial aid award at the same time as, or shortly thereafter, the student receives his/her admission’s offer. Colleges may adjust the award after receiving the year’s tax statements.

I encourage you all to be thorough and diligent as you and your student go
through the financial aid application process. The process of applying for financial aid can be time consuming and a bit anxiety provoking, but the more you prepare and find out ahead of time, the more comfortable and knowledgeable you will be as you go through the process. Furthermore, hopefully, you also will feel assured that your student will be awarded all the funds for which he/she is eligible. For more on Financial Aid, see our Resources and Links.

Contact Doing College to set up a complimentary 30-minute phone consultation with Elizabeth LaScala to discuss our services.

Doing College offers educational consulting services to students and their parents in Lafayette, Moraga, Orinda and greater California, as well as nationally and internationally.

Need-Based Financial Aid

“I just wanted to take the time out to tell you which college I’ve committed to. I decided that I will be attending Rider University in the fall. Rider University offered me a great scholarship and I’m very excited that I will be there in the fall. Also, the swimming coach recruited me to be on the team and also gave me a sizable scholarship. I’m really excited that it is on the East Coast and I know that I will fit in there.

I wanted to thank you again for all of your help. Without your help, I don’t know how I would have gotten through the admissions process. I hope all is well and I hope to talk to you soon.”

Cameron Hoyh
Rider University
$26,000 Rider U grant

Need-Based Financial Aid

“Our daughter, Serena Sam, received $84,000 in merit award offers including awards from USC, UC Davis and Carnegie Mellon as listed below. My husband and I are very satisfied with your services.

  1. USC – Deans Scholarship $10,000 per year for four years
  2. UC Davis – Regents Scholarship $7,500 per year for four years
  3. Carnegie Mellon – Carnegie Mellon Undergraduate Grant $13,632 (future years TBD)

Cindy and Seng Sam
Daughter, Serena
UCLA Pre Med

Need-Based Financial Aid

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It was nice to talk with someone who is so knowledgeable. I plan to get in touch with her much sooner for my next child.”

Rain Tague
Orinda, California