Dollars and Sense: Demystifying College Financial Aid – Part Two

By Francine Schwartz - Pathfinder Counseling LLC

In the last edition I discussed college costs and the various types of financial aid available.  In this issue I will show you the steps to apply for financial aid, and how the award is determined.  While the process may seem like a big mystery, it is really quite straightforward, as you will see.

How is Financial Aid Determined? The formula used to compute how much financial need a family has is derived by taking the total Cost of Attendance (COA) for the college and subtracting the Expected Family Contribution (EFC). The remainder is the Financial Need. All need-based aid is figured from this bottom line.

In order to determine the EFC, the student and family must complete the FAFSA (Free Application for Federal Student Aid). It is available online at starting on October 1 for the next school year. Since each college has their own deadlines, complete theFAFSA as soon as possible. It is now based on your prior year income taxes. There is a data retrieval tool that allows you to download tax information directly from the IRS. It is easy to go back to update and make corrections online. There is help available on the website. 

Once the application is reviewed the student will receive a Student Aid Report (SAR), which lists the Expected Family Contribution and whether the student is eligible to receive a Pell Grant.  Each college the student has listed on the FAFSA will receive an Institutional Aid Report. Some private colleges require an additional application such as the CSS/Financial Aid Profile. It is available online as early as October 1st, at There is a fee for this application with charges for each college that it is sent to. 

The Financial Aid Award Letter:  Most college award letters will list the type and amount of financial aid the student is eligible to receive.  Students can accept or decline all or part of the award. Not all colleges are able to meet a student’s full financial need. There may be a gap between the amount of aid awarded and the EFC.
The EFC itself may be higher than what you feel you are able to pay. That is because needs analysis is based on the principles that parents and students have the primary responsibility to provide for a college education. The FAFSA is income driven in order to be fair and equitable to all students and does not take into account the family’s level of debt. Be sure to find out if private scholarships affect the schools aid package and the requirements to keep the award from year to year.

Negotiating with a college: College financial aid officers may have some discretion in how they award financial aid. Therefore it is important to make a contact with a real person in the financial aid office as early in the process as possible. Special family circumstances such as a parent’s illness or job loss are often taken into consideration. Once a student has been admitted to colleges in the spring you may be able to tell one college about a better financial aid package offered at another school. The college just might be able to match the better offer.

The Bottom Line:  Take heart. There is money available to go to almost any college. Don’t rule out a college based on its sticker price alone. Sometimes the school with the higher cost of attendance will actually provide a better financial aid package than one with a lower cost.  Remember to start early, complete all forms as soon as possible and look for scholarship opportunities. Always have a financial safety schoolone the student can afford to attend should they not receive sufficient financial aid or if family financial circumstances change. Get to know the financial aid officer at the colleges you are considering for additional help and advice.

Pathfinder Counseling LLC – All rights Reserved


Pathfinder Counseling LLC
College Bound Direction

Phone: 860-460-8829

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