Paying the Bill: How Is Your Financial Aid Package Put Together?

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Grants are clearly the most desirable source of funding, since they require no extra work and do not need to be repaid. Almost all colleges, however, include some form of self-help as part of their financial aid packages. What varies is the proportion of the aid package that is self-help. Colleges with large endowments can usually afford to award a larger portion of the package as grant aid. For example, in 2001 Princeton University announced that it would no longer include loans in any of its financial aid packages, a first among major institutions. Work-study and grant funding would be the only components. By 2008, nearly fifty other colleges had pledged to eliminate loans from financial aid awards for some or all of their accepted students.

Although no-loan schools are the notable exception to the general rule that colleges include loans in a financial aid package, many colleges can and do exercise discretion in awarding aid. Two students may have identical need and receive the same amount of aid, but it may be packaged very differently. If a college is particularly eager to recruit a student, it may offer a higher percentage of grant money in the total package, making it more desirable to the recipient. Colleges also have flexibility in determining the final EFC—much more with institutional methodology than with federal methodology—based on the professional judgment of the financial aid staff.

In general, when awarding money from programs they administer but do not fund (i.e., federal programs), colleges give priority to the neediest of the able. When awarding money from their own funds, colleges give priority to the ablest of the needy.  - Anna and Robert Leider, authors of Don’t Miss Out: The Ambitious Student’s Guide to Financial Aid

When you eventually compare packages from different colleges, you’ll need to look at both the individual components of the package and the total package amount. Be sure to check the college’s figure for the cost of attendance, including tuition and fees, room and board, books, incidentals, and transportation. An unrealistically low estimate of these costs is equivalent to less financial aid, even if the awards are the same size. When you receive your aid offer, all the components of the package will be itemized and listed separately, and you will be asked to accept or reject each part if you choose to attend that college. If the package is inadequate or less than another you have received, you or your parents can ask the financial aid office to review your case for possible adjustment.

Will Your Need for Financial Aid Affect Your Chances of Admission?

Only a small number of private colleges have the financial resources to admit students without regard to need and then to meet the full demonstrated need of those admitted. These colleges are referred to as “need blind” in admissions and “full need” in their financial aid policies. Most of them direct all of their available financial aid, with the exception of athletic scholarships where offered, to students demonstrating financial need.