If You Receive Need-Based Financial Aid, Here’s What You Need to Know About Paying for College

need-based financial aid: how to make it work

If You Receive Need-Based Financial Aid, Here’s What You Need to Know About Paying for College

Published July 8, 2020 | Last Updated September 10th, 2023 at 07:58 am

need-based financial aid: how to make it work

On a recent Saturday morning, I begin musing about families with need-based financial aid worries…

This is my advice specifically for middle-to-lower income families trying to figure out how to afford college.

Especially those with barely any extra money as it is right now and for whom adding in the cost of college bills would seem insurmountable.

Understanding FAFSA and EFC

If you’re new to this, let me start by stating that FAFSA is just a reporting tool. It doesn’t guarantee you ANY money.

Unless your EFC (the number FAFSA assigns you) comes back at 5711 or below–only then will you be eligible for a Federal Pell Grant).

Understand that, regardless, you may not get a dime of need-based aid from some colleges.

In fact, most colleges WILL NOT give you anywhere near enough need-aid to make it affordable.

Expect this.

Know this right off the bat.

In fact, even if your EFC is zero, some colleges STILL WONT give you a cent of need-based aid.

So please, don’t bank on your actual, real, legitimate need resulting in ANY need-money from colleges.


The Net Price Calculator is Your Friend

Consequently, FIRST, before your child applies, before you even visit or they get their heart set on any college, run the net price calculator..

(Google “ {college name} + net price calculator” then enter your information.

This will help you avoid colleges that you won’t be able to afford unless you take out massive loans. (Which actually IS an option, but not one I recommend.)

Charging more than most people can afford is sustainable for many colleges because they rely on the fact that most parents will be approved for Parent PLUS student loans – even in amounts that exceed their annual take-home pay!

Colleges find A LOT of parents every year taking out massive loans to pay for an education at schools that they cannot afford.

This the hallmark of a broken system…one that can get you in trouble.

That’s why it is imperative to figure out how much you CAN afford and come up with a list of schools that will fit that category.

Thankfully, there is a work-around: a fairly simple solution.

I REPEAT…run the net price calculator on any college you’re considering FIRST.

See how much it will cost you out-of-pocket after institutional scholarships and state or federal grants are factored in.

Then you’ll know how much the college will expect from you — before you even plunk down the application fee to apply.

Any college that (after scholarships & grants) expects the full $5500 Stafford loan from the student + way more than even your EFC says you can afford should be considered a significant financial reach for you.

Keep looking.

Finding Colleges With Generous Merit Aid

Last year we found colleges we could (sort of) afford by Googling “colleges that accept C students and 1000 SAT” then going through the websites, one by one, to find those that offered merit scholarships for my kids, based on their actual stats.

This was an arduous task, and there is probably a better way to do this. But that’s how we did it.

1. Apply to colleges where your student’s Grade Point Average and ACT/SAT scores are far above the average for the college. Especially ones that offer sizable merit scholarships for their top incoming students. (This is a strategy that works for financially well-to-do applicants too.)

2. If you have an EFC that is low enough for Pell Grant eligibility (an EFC of 5711 or lower) – if your student has fairly good stats, consider also applying to a few colleges that meet 100% of need with no loans.

For example, if your EFC is actually zero this means that you will be getting $6345 in a Pell Grant. This is money from the federal government that doesn’t have to be paid back. And the student will also be eligible to take a $5500 Stafford loan in their name only, without a co-signer.

Stafford Loans eventually have to be repaid. However, one other bright spot–some states also automatically offer need-based grants that do not have to be repaid. Check to see if yours does.

So in the example of someone with an EFC of 0, it’s probably safe to assume that you legitimately don’t have ANY significant money you can put towards college.

In that case, you need to focus on colleges that show a net price calculator estimate where your budget of $11,845 (the $6345 Pell Grant + the $5500 Stafford loan) will be close to enough to cover the costs. (Your budget may be more if your state also offers need-based grants on top of this.)

There may be colleges close enough to your home for the student to commute to–which saves room and board charges. Would your student consider those?

There may be colleges where your child’s stats (GPA & test scores) mean they’ll also get academic merit scholarships on top of the ~12k budget you have.

A merit scholarship on top of the Pell Grant and Stafford loan just might be enough to cover their entire cost!

(Just be conscious of scholarship stacking)

This could even include the full tuition, room, board, books, fees, and miscellaneous expenses at some schools.

Consider those schools!

For High Stats, Low EFC Students

Lastly, (and this is for very high-stats, lower EFC students) consider also applying to a few of the extremely-selective elite colleges that meet 100% of need with no loans.

They’re SO hard to get into, but the out-of-pocket costs are often nil for students with significant financial need.

For example, the year one of my daughters was putting together her college list, her EFC was 16500 and her older brother’s was 17000. 

NOTE: This was an amount that we couldn’t POSSIBLY have EVER afforded, but I digress.

Miraculously, the net price calculator estimates at three elite colleges showed amounts less than half her EFC!

Those schools became top contenders, because they were going to be even more affordable than commuting to state school would have been.

She chose one, applied ED and got in!

NOTE:  If there is a change in your financial circumstances you CAN appeal for more aid at schools that offer need aid.

We have successfully appealed every year she has been there so far. It’s still a financial stretch for us with six kids, (four of them in four different colleges) – but every single dollar we save counts. 

Don’t Give Up!

All this to say, all hope isn’t lost, even if you don’t have much money and if you don’t have a straight-A, 1500+ SAT student either.

There are options and ways to be strategic about which colleges you’ll consider.

And those options will vary for each student, depending on their stats, what state you live in, and your EFC. They vary from kid-to-kid, even in the same family.

So this is an individually devised strategy for each student.

Look for schools that will offer:
– good merit scholarships or
– good need scholarships or
– ones that offer close-to-enough of both

Hope this helps!


Use R2C Insights to help find merit aid and schools that fit the criteria most important to your student. You’ll not only save precious time, but your student will avoid the heartache of applying to schools they aren’t likely to get into or can’t afford to attend.  

Other Articles You Might Like:

10 Ways a Parent Can Help Their Student Prepare for College

Determining Your College Budget: Affordability vs. What You’re Willing to Pay

Creating a Realistic List of Colleges We Could Afford




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