Will we qualify for need-based financial aid for college? – A question on the minds of most parents with college-bound high school students. The answer is going to depend on many things, with the biggest being parental income and number of kids in college at the same time. Let’s go over some general factors on who qualifies for need-based aid for college and how to estimate whether your student will qualify.
Who Qualifies for Need-Based Financial Aid?
It is going to vary greatly from college to college.
- As a generalization, families with yearly incomes under $150,000. Once you get above $100,000, the schools that will offer your student any need-based financial aid are going to start dropping off very quickly. Mostly what you have left are very competitive, very hard to get into colleges that claim to meet 100% of a student’s financial need.
- Families with more than one student in college at the same time. When you have more than one student in college, your Expected Family Contribution (EFC) number gets cut pretty much in half. So if one student in college results in a $40,000 expected family contribution, two students in college will cut the EFC for each student down to around $20,000.
- Families with a large number of dependents. While schools weight the number of students in college at the same time more heavily, it will also matter how many overall dependents your family income is supporting.
- Students who get into the most exclusive colleges. This is going to be heavily dependent on the family income and these schools are going to look at more than just the Free Application for Federal Student Aid (FAFSA) in determining how much aid to award, but colleges like the Ivy League and other top tier, low acceptance rate schools are more generous in awarding need-based aid. Read Best Colleges For Need-Based Financial Aid to learn more about these schools.
Estimating Your Student’s Potential Need-Based Financial Aid
- Start with FAFSA. Go to the FAFSA4Caster, a calculator to estimate what the government thinks your expected family contribution will be. In addition to being the jumping off point to estimate your expected family contribution, the page I linked to provides a lot of helpful information.
- Next, run Net Price Calculators on a variety of college websites. How do you find the Net Price Calculator on a college’s website?
- You can type “net price calculator” into the search field on the school’s home page.
- You can go to the Financial Aid or Admissions section of the school’s website and look around for it.
- You can use the government’s Net Price Calculator Center.
- You can find the link on a college search website like collegedata.com by entering the school name to get data for that school.
- You can purchase the DIY College Rankings spreadsheet to get an Excel file of data for almost all 4-year colleges in the country to use as a huge time saver in your college search. There is a link to each school’s net price calculator in the file.
- You can try the College Board Big Future Net Price Calculator. This will allow you to calculate expected family contribution for a large number of colleges.
- As you run Net Price Calculators, make sure you understand what your Expected Family Contribution will be at this variety of colleges:
- In-State Flagship University
- In-State Smaller Regional Public University
- Out-of-State Public University that has a reciprocity agreement with your state (discounted out-of-state tuition)
- Out-of-State Public University that does not have a reciprocity agreement with your state
- Regional Private College
- Use MyIntuition.org to calculate expected family contribution at a large number of top-tier, highly selective admissions schools
- Any other colleges your student has expressed an interest in
Covering your bases by running net price calculators at the variety of colleges outlined in #3 above will give you a good idea where you stand overall related to need-based financial aid. Are all types of schools estimating you will receive need-based aid? Are only the most expensive and most competitive schools estimating you will receive need-based aid?
Along with understanding whether or not you will be offered need-based financial aid, it is also important to understand the types of need-based financial aid because some are much better than others.
Types of Need-Based Financial Aid
When you receive a need-based financial aid package from a college, it may include any of the following types of aid.
- Federal Student Loans – The Federal Government offers both subsidized and unsubsidized student loans. Being offered a subsidized loan is based on your expected family contribution calculation, whereas any student who fills on the FAFSA can receive an unsubsidized Federal student loan. There are also the PLUS loans offered to parents to cover the costs they cannot cover through other financial aid. Here’s a PDF listing of the Federal Student Loan Programs.
- Federal Work Study – In my opinion, this sounds better than it is. Basically, your student gets a job on campus or off campus at specified types of organizations and earns a paycheck like any other student with a job. Your student earns at least the federal minimum wage. The money is not paid directly to the school so your student can use it as he or she sees fit. Some colleges reserve specific on campus jobs for Federal Work Study students.
- Federal Grants – The Pell Grant is the most common one. Here’s a PDF listing of the Federal Grant Programs.
- State Need-Based Grants and Scholarships – Many states offer specific need-based grant and/or scholarship programs for college students. You can find out about these through the National Association of Student Financial Aid Administrator’s website under State Financial Aid Programs.
- School’s Own Need-Based Grants and Scholarships – Most colleges offer some grants and scholarships that are based at least in part on a student’s financial need. These usually require the student to submit the FAFSA to determine eligibility. There are often “combo” scholarships that are based on both merit and financial need.
What you want to see in a financial aid package is the “free” money – that would be the grants and scholarships that don’t need to be repaid. Sometimes a financial aid package can look great at first glance until you dig into the detail and find out the school is offering you a bunch of loan money!
In addition to the need-based component, a school’s financial aid package may also include merit scholarships. These come in all different amounts and have a variety of qualifications. For more information on merit scholarships, read Merit Scholarships – Types and Sources.
Financial Aid Resources
In addition to all the great links included above, I recommend reading the following to learn what you need to know.
- Forbes Guide to College Financial Aid, The FAFSA and CSS Profile
- The EFC Formula, 2019-2020 – This guide focuses on how the FAFSA calculates your Expected Family Contribution
When it comes to the topic of need-based financial aid, you will want to know everything you can about FAFSA, the CSS Profile, and also the consensus methodology used by a small number of high profile schools to calculate your expected family contribution. The more you understand your expected family contribution and what schools to target for the maximum amount of aid, the more likely you will be to get the best deal on college.