Paying the Bill: FAFSA( The Free Application for Federal Student Aid)

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The news is mixed when it comes to paying for college. The good news is that for many students, the cost of tuition, fees, room, and board printed in the college catalog is only loosely related to what the student actually pays. Although no one pays more than the “sticker price,” many students pay less, sometimes much less, depending on their family’s financial situation and their campus’s financial aid policies. The not-so-good news is that financial aid can be complex and confusing, and in some cases disappointing, if you don’t understand how it works both in general and at the specific colleges where you are applying. The additional tough news is that the nation’s economy is weaker than it has been in a generation or more, placing financial strain on both families and colleges.

Financial aid allowed us to send our daughter where she wanted to go, a private school in the East. With three children, we couldn’t have done it without that help. Financial aid really helped our middle-class family.  - Parent of college sophomore

Finding adequate financial aid is going to be more difficult in the years ahead than in the recent past. Nevertheless, the basic principles and objectives of the financial aid system are intact and will change only in degree. Colleges are still firmly committed to helping those who need financial aid because they want diverse student bodies and because, collectively, they adhere to the principle that financial need should not be a barrier to higher education. Aid budgets may shrink, but they will not be eliminated, and the federal government is likely to compensate somewhat as it works to stimulate the economy. The advice in this article holds for both good times and bad. It includes the tools you need to understand the different kinds of financial aid and how they are awarded. It is shown how you can roughly calculate how much aid you might expect to receive, and explained why the actual amount may be more or less depending on a college’s financial aid policies and practices.

How Do Colleges Determine Your Financial Need?

Need-based aid is financial assistance awarded on the basis of a family’s demonstrated need, the difference between the cost of attending a particular college (including tuition and fees, room and board, transportation, and books and incidentals) and what a student and family can reasonably be expected to pay for such costs (the expected family contribution, or EFC for short). Need-based aid is designed to reduce or eliminate financial need as a barrier to attending college. The determination of what a family can afford, however, is not left up to the family, for obvious reasons. Colleges have objective ways of measuring how much a family can reasonably contribute to its child’s education. An underlying principle is that parents and students have a primary responsibility to contribute to the cost of a college education, according to their ability, before receiving financial aid. 

I thought we would qualify for need-based aid, but the calculations showed we didn’t. It was probably just wishful thinking on my part. - Parent disappointed by the results of the need analysis