Your financial aid eligibility is determined by a formula which calculates your Family Contribution (FC). Your FC is the amount of money that you are required to contribute annually towards the cost of your child's education. The gap between the Cost of Attendance at a college and the amount you are required to pay, your FC, is called your 'Need'. It is important to understand that some schools award a financial aid package that covers your entire calculated 'Need' and others do not. When schools do not cover all of your 'Need', the remainder is referred to as 'Unmet Need'. When 'Unmet Need' exists, it is added to the amount that YOU HAVE TO PAY! Therefore, your new Family Contribution = FC+Unmet Need. Wouldn't you rather attend a school that will award a financial aid package that covers all of your calculated 'Need'?

In addition, it is valuable to educate yourself on the TYPES of financial aid packages that different schools historically award. Some schools will compose an award package of mainly Gift Aid (free money) whereas other schools will meet your 'Need' with a financial aid package made up of mostly loans. You probably don't think of loans as 'meeting your Need' since you may already have to take out loans in order to come up with your Family Contribution. However, financial aid award packages usually do have loans as a component.

In summary, before you apply to a school, be sure you understand what percentage of 'Need' your school meets. Also be sure to know what percentage of the financial aid package is made up of loans and Work-Study (Self-Help) as opposed to Gift Aid.

It is interesting to note that some schools with a higher tuition will meet more of your 'Need' or meet your 'Need' with a greater percentage of Gift Aid than some schools with less expensive tuition. Therefore, the more expensive school may be equally affordable to you.

For Example:

School A: School B:

Cost $20,000 Cost $10,000
FC $5,000 FC $5,000
Need $15,000 Need $5,000
School A: School B:
Meets 100% need. Meets 60% need. (Of your $5,000 Need, only $3,000 will be covered.)
Gift aid 80% Gift aid 50%
Self help 20% Self help 50%


What you actually pay at each school!

School A: School B:
Total FC = $5,000 Total FC = $7,000 (FC +$2,000 unmet need)
Total Gift = $12,000 Total Gift = $1,500
Total Self-Help = $3,000 Total Self-Help = $1,500

Family at school B actually pays $2,000 more out of pocket to send their child to the “cheaper” school! Don’t make the huge mistake of picking schools based on cost of attendance only. Your children may not get the best education because you didn’t know the inside secrets of college funding!


Case Study 2

Be sure to look closely at what percentage of need each school meets. As you can see below, even schools whose cost of attendance is the same, can have different results based upon the percentage they meet.

School A School B

Cost of Attendance: $36,000 Cost of Attendance: $36,000
EFC : $16,000 EFC : $16,000
Need : $20,000 Need : $20,000

Cost of Attendance - EFC = Need

School A School B
100% need met 70% need met
100% gift aid 50% gift aid
50% self help

100% need met = $20,000 70% need met = $14,000
Final out of pocket cost = $16,000 $20,000 - $14,000 = $6,000 unmet need
EFC $16,000 + $6,000 unmet need = $22,000 out of pocket
But when school only covers 50% gift aid to met the need
Gift aid = $7,000
Self help = $7,000
Final out of pocket cost = $22,000 + $7,000 (loans) = $29,000