College Financial Aid – Need-Based Aid

Jordan Schonig | Sep 24, 2010 | Comments 2

When it comes to paying for college, families have three main options. You can 1) Save enough money to cover all college expenses before your child enrolls, 2) Work to pay off expenses while your child is in college, or 3) Take out loans and pay them off after your child graduates.

Option 1 is often reserved for the wealthy, and option 2 is reserved for those fortunate enough to pull it off. The average cost of college is climbing every year, and financial aid is becoming a necessity for more and more families every year.

There are many financial aid tools available for families in need of them, including merit-based and need-based scholarships, work-study employment, and of course, student loans.

Need-based aid is based on two figures – the total cost of education and the family’s total income. Both of these figures will vary significantly by situation. The tuition of a private college will often far exceed that of a public college. And even among private colleges and public colleges themselves, tuition widely varies. Remember, the total cost of college includes tuition, room and board, books, and other living expenses, but tuition is often the biggest variable.

You can apply for need-based financial aid by completing the Free Application for Financial Aid (FAFSA) and the College Scholarship Service’s PROFILE application. The information you provide on these documents helps determine how much your family (that includes parents and student) can contribute to the cost of attendance.

To make sure all applicants are treated fairly, formulas are used to determine the EFC, or Expected Family Contribution. As a result, even families with relatively high income can still qualify for aid since the EFC is based on college expenses versus income. So, if the family has multiple students in college at once, and if those college expenses are particularly expensive, then even high income families can receive financial aid.

Every family, regardless of its tax bracket, should apply for need-based aid.

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