How Colleges Determine Need and Need-Based Financial Aid Awards

Need Based Financial Aid

How Colleges Determine Need and Need-Based Financial Aid Awards

Published September 14, 2019

Need Based Financial Aid

If the idea of figuring out how to pay for college is keeping you up at night and even causing panic attacks, you’re certainly not alone. Almost every family needs help in this critical area.

One of the most challenging parts is understanding what your financial need is for specific colleges and figuring out if schools are going to give you enough financial aid to make a difference. Fortunately, you CAN know – before your student even applies to college!

Here’s what you need to get started!

Download the list of colleges most generous with need based financial aid.

This list includes information for each college on admissions rates, cost of attendance (in-state and out of state), percent of financial need met, average need based financial aid award, four-year graduation rate, average SAT/ACT scores, test optional, and CSS requirement:

Download the List of Colleges Meeting 90% and More Financial Need

Filling Out Financial Aid Forms

An important step to figuring out a family’s financial need and aid is to fill out the Free Application for Federal Student Aid (FAFSA) and, if required, the CSS Profile.

Even if you don’t think you’ll qualify for need-based financial aid, it’s still important to fill out all financial aid forms. Some schools don’t award merit aid to students unless a FAFSA is received!

The FAFSA is the standard financial aid form and it will help you see if you’re eligible for federal student aid. The CSS profile is an additional form required by a few hundred schools who ask for more information than the FAFSA requires.

Once you’ve submitted the forms, you’ll receive information about your expected family contribution (EFC), which will be used by the schools to determine your financial need.

Receiving Your EFC

Many families are shocked by the government’s or school’s statement of how much they are expected to pay. The EFC can seem far out of reach, but it’s based on the standard information gathered on the forms.

Knowing your EFC as early as possible in your college planning process, gives you a chance to plan how you can cover the EFC amount through a variety of sources like savings, daily income (by cutting back on expenses) or student loans (from the government or a private lender, like College Ave Student Loans).

Families in our Paying For College 101 Facebook group have expressed disbelief when they finally get their EFC after filing FAFSA.

One parent said, “We got clobbered by the EFC amount when I filled out the FAFSA for the first-time last year. At first, I thought the EFC number had to be a mistake.”

Another parent was brutally honest, “Good news: FAFSA done! Bad news: EFC is obscene.”

So, if you’re a parent who has never gone through the financial aid process, or even if you have, you may (and in my opinion you should) be curious about how your EFC is calculated.

For a deeper understanding of how the federal government calculates your EFC from the FAFSA, the Department of Education has a guide you can explore or you can review our easy to follow explanation of the calculation.

Once you understand what’s behind the calculation, there are also steps you can take to reduce your EFC, especially if you plan ahead.

If your student’s target school also requires the CSS Profile, you may find that your EFC is different than the FAFSA for that particular school. Once you send in the CSS form, each school has their own formula (called the Institutional methodology) to determine EFC and need.

Using the Institutional method, each college can modify the calculation to meet their specific goals. Unfortunately, schools are not required to make public what the details of their formula is.

The CSS version of the EFC will include other items not included in the Federal EFC or FAFSA. In some cases, the CSS version of a family’s EFC is higher due to the inclusion of other items colleges ask for. The college will typically use the higher of the two numbers when designing a student financial aid award.

Will You Have Financial Need at a Given School?

Understanding how a college decides to offer financial aid and how much, can be confusing, as this parent in our Paying For College 101 group explained.

“I’m confused about financial aid. According to FAFSA, my son can only get a $5500 loan. Our EFC is $15,000. Will the college help us with the cost so that we only have to be responsible for $15,000? When people say the college gives financial aid, is that a loan or something else?”

Here are some steps to help you figure out if your family will be determined to have financial need and how much financial aid a school might offer…

Once you have your EFC, you should find out the college’s cost of attendance (COA). It’s generally listed on the school’s website, and includes tuition, books, fees, room and board. The difference between the COA and your EFC is your financial need for that school.

Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need

It’s possible, depending on the types of schools your student is targeting, that your EFC will be higher than the cost of attendance. If that happens, your student won’t qualify for need-based financial aid, but they will have access to unsubsidized federal student loans.

If EFC is greater than > COA then NO need-based aid à Look for scholarships

In this case, your student can still be awarded merit aid and your family may also lower college costs and debt by choosing a less expensive school.

If your EFC is less than the school’s cost of attendance, you will have financial need.

Depending on the college financial aid policy, the school MAY offer your student financial aid to cover some or all of your family’s determined financial need. When colleges use money from their own resources, not the government’s, to offer a student money to cover their financial need it’s called an institutional grant.

Colleges are not obligated to offer institutional grants, that’s why it’s important to research the financial aid policy and data at school’s your student is interested in applying to.

Here’s an example:

The Frank family’s EFC is $27,000.

Their son is interested in applying to Rice University, which has a cost of attendance for the 2018-19 year of $65, 145.1

At Rice University, the Franks would have a financial need of $38,145 ($65,145 – $27,000).

Rice is a very generous school for need based aid and meets 100% of a family’s financial need. In this case, the Franks could expect Rice to offer their son $38,145 in need-based aid, if he were to be accepted. (Rice is a very selective school. Last year their admissions rate was 11%.)

The Frank family is from Florida. Their son is also applying to University of Central Florida, which has a cost of attendance of $22,1342. In this case, since the Franks’ EFC is higher than the school’s COA, the Franks would not have any financial need if their son chooses to attend UCF.

As the above example demonstrates, whether a family has financial need depends on their EFC relative to a school’s cost of attendance. The same family may have financial need at one school but no financial need at another.

Focus on Schools That Are a Good Financial Fit

We often understate the importance of affordability and focus only on admissions.

A student may be accepted at an academically “right” school but not be able to afford it. To avoid this type of outcome, families need to focus on two important pieces of data:

First, know your financial need at each school. Second, find out the percentage of financial need each school meets.

Very few schools meet 100% of need. Before your student gets their heart set on a school, make sure they have a high percentage of need met and a generous average need-based financial award.

Often times, you can find the information about how much need is met on the college’s website or in a college’s Common Data Set. If you can’t find, call the financial aid office up and ask!

If a school only meets 75% of a student’s need on average, they’re going to be a lot less desirable for your student than one that meets 95% on average.

It’s important to apply to a variety of schools so you can compare their financial aid award letters to choose the right school for your student and your budget. If none of the financial aid offers fit your budget and you choose to take loans, always max out federal student loans first and then compare interest rates from

private student lenders carefully. Many, like College Ave Student Loans, offer borrowers pre-qualification, so you can know your interest rate before fully applying for the loan.

A Helpful Resource to Find Schools Generous with Need-Based Financial Aid

To help families target colleges that are more generous for need based financial aid, we’re offering a list of schools that meet 90% or more of students’ need.

Download the list here with information for each college on admissions rates, cost of attendance (in-state and out of state), percent of financial need met, average need based financial aid award, four-year graduation rate, average SAT/ACT scores, test optional, and CSS requirement:


Colleges Meeting 90 - 100% of Financial Need

Amherst CollegePrivateMA
Augustana UniversityPrivateSD
Barnard CollegePrivateNY
Bates CollegePrivateME
Boston CollegePrivateMA
Bowdoin CollegePrivateME
Brown UniversityPrivateRI
Bryn Mawr CollegePrivatePA
California Institute of TechnologyPrivateCA
Carleton CollegePrivateMN
Claremont McKenna CollegePrivateCA
Colby CollegePrivateME
Colgate UniversityPrivateNY
College of the Holy CrossPrivateMA
Colorado CollegePrivateCO
Columbia University in the City of New YorkPrivateNY
Connecticut CollegePrivateCT
Cornell UniversityPrivateNY
Dartmouth CollegePrivateNH
Davidson CollegePrivateNC
Dickinson CollegePrivatePA
Duke UniversityPrivateNC
Emory UniversityPrivateGA
Franklin and Marshall CollegePrivatePA
Georgetown UniversityPrivateDC
Grinnell CollegePrivateIA
Hamilton CollegePrivateNY
Harvard UniversityPrivateMA
Harvey Mudd CollegePrivateCA
Haverford CollegePrivatePA
Johns Hopkins UniversityPrivateMD
Kenyon CollegePrivateOH
Lafayette CollegePrivatePA
Macalester CollegePrivateMN
Massachusetts Institute of TechnologyPrivateMA
Middlebury CollegePrivateVT
Mount Holyoke CollegePrivateMA
Northeastern UniversityPrivateMA
Northwestern UniversityPrivateIL
Oberlin CollegePrivateOH
Occidental CollegePrivateCA
Pitzer CollegePrivateCA
Pomona CollegePrivateCA
Princeton UniversityPrivateNJ
Reed CollegePrivateOR
Rice UniversityPrivateTX
Scripps CollegePrivateCA
Skidmore CollegePrivateNY
Smith CollegePrivateMA
Southern University at New OrleansPublicLA
Stanford UniversityPrivateCA
SUNY Polytechnic InstitutePublicNY
Swarthmore CollegePrivatePA
Trinity CollegePrivateCT
Tufts UniversityPrivateMA
Union CollegePrivateNY
University of ChicagoPrivateIL
University of North Carolina at Chapel HillPublicNC
University of Notre DamePrivateIN
University of PennsylvaniaPrivatePA
University of RichmondPrivateVA
University of Southern CaliforniaPrivateCA
University of Virginia-Main CampusPublicVA
Vanderbilt UniversityPrivateTN
Vassar CollegePrivateNY
Wake Forest UniversityPrivateNC
Washington and Lee UniversityPrivateVA
Washington University in St LouisPrivateMO
Wellesley CollegePrivateMA
Wesleyan UniversityPrivateCT
Williams CollegePrivateMA
Yale UniversityPrivateCT
Northeastern State UniversityPublicOK
St Olaf CollegePrivateMN
University of FloridaPublicFL
Berea CollegePrivateKY
Lehigh UniversityPrivatePA
Tulane University of LouisianaPrivateLA
Anderson UniversityPrivateIN
Babson CollegePrivateMA
Trinity UniversityPrivateTX
University of MiamiPrivateFL
Valdosta State UniversityPublicGA
Oakland City UniversityPrivateIN
Southwestern Oklahoma State UniversityPublicOK
Southwestern UniversityPrivateTX
SUNY College at PotsdamPublicNY
Syracuse UniversityPrivateNY
University of RochesterPrivateNY
Walla Walla UniversityPrivateWA
Austin CollegePrivateTX
Beloit CollegePrivateWI
Brandeis UniversityPrivateMA
Doane University-Arts & SciencesPrivateNE
Fort Lewis CollegePublicCO
Hampshire CollegePrivateMA
Hiram CollegePrivateOH
Kalamazoo CollegePrivateMI
Lawrence UniversityPrivateWI
The College of WoosterPrivateOH
Westminster CollegePrivateMO
Wheaton CollegePrivateMA
Alcorn State UniversityPublicMS
Bentley UniversityPrivateMA
Fort Valley State UniversityPublicGA
Marymount California UniversityPrivateCA
Valparaiso UniversityPrivateIN
Wabash CollegePrivateIN
Wiley CollegePrivateTX
Earlham CollegePrivateIN
Gustavus Adolphus CollegePrivateMN
La Roche CollegePrivatePA
Northwestern CollegePrivateIA
Rhodes CollegePrivateTN
Saint Johns UniversityPrivateMN
Albion CollegePrivateMI
College of Saint BenedictPrivateMN
Hardin-Simmons UniversityPrivateTX
Indiana Wesleyan University-MarionPrivateIN
Lewis & Clark CollegePrivateOR
Luther CollegePrivateIA
Ohio Dominican UniversityPrivateOH
Alderson Broaddus UniversityPrivateWV
Allegheny CollegePrivatePA
Angelo State UniversityPublicTX
Bucknell UniversityPrivatePA
Clark UniversityPrivateMA
Concordia College at MoorheadPrivateMN
Friends UniversityPrivateKS
Knox CollegePrivateIL
Mercer UniversityPrivateGA
Oklahoma Baptist UniversityPrivateOK
Oral Roberts UniversityPrivateOK
Sewanee-The University of the SouthPrivateTN
Wofford CollegePrivateSC
American UniversityPrivateDC
Centre CollegePrivateKY
Cooper Union for the Advancement of Science and ArtPrivateNY
Dalton State CollegePublicGA
DePauw UniversityPrivateIN
Gettysburg CollegePrivatePA
Ithaca CollegePrivateNY
Loras CollegePrivateIA
McDaniel CollegePrivateMD
Rockhurst UniversityPrivateMO
Southern Methodist UniversityPrivateTX
St Bonaventure UniversityPrivateNY
Talladega CollegePrivateAL
Texas Southern UniversityPublicTX
University of Massachusetts-LowellPublicMA
University of North FloridaPublicFL
Warren Wilson CollegePrivateNC
Whitman CollegePrivateWA
William Carey UniversityPrivateMS
The list is made up of 154 colleges that meet 90% or more of a student’s financial need. This represents just under 10% (9.6%) of all 4-year schools that have 500 students or more.

Some interesting statistics about these schools:

  • 73% require that students submit either an ACT or SAT score to apply
  • 57% require the CSS Profile, in addition to FAFSA
  • 89% are private schools
  • 18% are located in the New England; 18% in the South East; 8% in the South West; and 9% in the Far West.
  • The average amount of need based award for freshmen is $36,854. Colleges within this list that require the CSS Profile are more generous than most others, with an average award of $43,630.
  • 10 schools do not require the CSS Profile and do not require SAT or ACT test scores

Comparing schools on the list that are private vs. public schools we find private schools tend to be more selective, have higher 4-year graduation rates, are more generous with their average need-based awards for freshmen, but cost twice as much in terms of cost of attendance.

Need Based Financial Aid

Comparing Financial Aid Award Packages

Once you have your financial aid forms turned in and an EFC determined, your student will finalize their applications with their target schools. If they are accepted, the school will send a financial aid award package.

Comparing the offers can be difficult since they may include different elements. The first thing you want to look at is how much of the financial need is covered by grants and scholarships vs. student loans.

Even if both schools seem to meet your full need, if one is 75% loans, your student will be in serious debt by graduation!

Part of the reason that your student will get different offers from various schools is that each school assesses your student differently. If your student is more desirable, there might be fewer loans and more school-based aid. Otherwise, you may see a lot of loans and little or no institutional help.

In other words, it’s often better to be highly desired at a state school than “just ok” at a name-brand university!

When There’s a Financial Aid Gap

Hopefully, you’ve found a school that meets a significant portion of your need. Even so, you may not get 100% of the money you need.  And even if you do, your EFC may not be something you can actually afford. In both cases, you’re facing a financial aid gap.

Sometimes it may make sense to appeal the financial aid award. However, unless there are really good reasons to reconsider, you may get turned down.

Addressing the financial gap is something that private lenders can help with. You’ll want to look for one with excellent terms – good interest rates, flexible repayment, and cosigner release options, like College Ave Student Loans, for instance.

Most private lenders make it easy to apply. Try to choose a lender that allows a pre-qualification with a soft credit check. This will give you the best chance of knowing exactly what will be offered if you do a full application. If it doesn’t look good, you don’t have to impact your credit by moving forward!

Being able to apply for loans online is another significant convenience. For instance, College Ave Student Loans allows you to fill out a short application that only takes a few minutes, and then gives you an instance credit decision.

Finding a Generous School

Bottom line is it’s important to have a college list that’s financially balanced, so your child doesn’t find out they can’t attend any of the schools they were accepted to.

Depending on your EFC and financial resources, it’s vital to pinpoint which schools are most generous with aid. If you know your student will have a lot of financial need, you need to find schools that cover a high percentage of financial need and can award your student need-based aid.

Download our list of the top colleges that meet the highest percentage of financial need and have generous average need-based awards. And when you want to find out about Merit Aid, check out our  R2C Insights tool, your essential guide for researching colleges and developing a list of affordable schools.






1 https://financialaid.rice.edu/cost-attendance

2 https://finaid.ucf.edu/applying/costs/

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