Your Expected Family Contribution
- What is expected family contribution?
- There are two different methodologies as to how they calculate a family’s expected contribution: the Federal methodology and the Institutional methodology. In both formulas, it takes different percentages of the parents’ and students’ income and assets. Then it calculates the figure that a family can “technically,” according to this somewhat unfair formula, afford to pay towards college.
- The financial aid formulas are not typically favorable towards middle and higher income earning families. The key is to learn in advance what your potential base cost will be for your children and begin to plan as soon as possible.
- Can you tell me a little about the different methodologies?
- Federal Methodology: If the colleges use the Federal methodology, more than likely they typically request only the FAFSA form to be submitted to the university. Most public universities use only the FAFSA and some (but not all) private universities use this form solely as well.
- Institutional Methodology: If the colleges use the Institutional methodology, then more than likely they request both the CSS profile and the FAFSA forms to be submitted to them as well.
- What is the main difference between the federal methodology and the institutional methodology?
- While there are many variables that go into the calculation behind both of these financial aid formulas, there is a main difference between the two formulas. In the Federal methodology, your primary residence home equity is not counted as an asset in the financial aid formula, but the equity in an investment property you personally own does. In the Institutional methodology, your primary residence home equity does count to some degree (varies per school) as an asset of the parents’ AND also the equity in an investment property you own.
Financial Aid Formula
What is the Financial Aid Formula?
- The formula that all colleges use to determine your student’s financial aid eligibility is:
- Cost of Attendance – Expected Family Contribution = Need
- Something to consider here is NOT all schools provide 100% of the “need.” Your family’s out of pocket costs will be the EFC + Unmet Need.
- Please watch our Online ‘Quick Start’ College Funding & Aid Video to learn more about this! (link to video sign up)
Types of grant
- PELL GRANT
- NATIONAL SMART
- STATE GRANT
- INSTITUTION GRANT
Is Your Student Eligible?
- Have a high school diploma, GED certificate.
- Enroll as a regular student in an eligible degree or certificate program.
- Attend a college that participates in the Federal Student Aid programs.
- Be a US citizen or eligible non-citizen.
- Have a valid Social Security Number.
- Came to USA before 16th Birthday.
- Make satisfactory academic progress.
- Register with the selective services, if required.
- Must not owe a refund on a Federal grant or be in default on a Federal educational loan.
- Sign a statement of Updated information, Anti-Drug Abuse Act certification, Educational Purpose.
3 Types of Financial Aid Planning
- Grants: Financial Aid that does not have to be repaid
- Work-Study: Allows you to earn money for your education
- Loans: Allow you to borrow money for school. You must repay your loans with interest.
Cost of Attendance
What is the Cost of Attendance?
- The Cost of Attendance is different at each school. It is one of the figures that they use in the financial aid formulas to determine a family’s financial aid eligibility.
- Cost of Attendance includes: Tuition, Fees, Room and Board, Books, Transportation and Personal expense money.
- The average Cost of Attendance is currently at:
- California State University: $25,000/year*
- University of California: $33,000/year*
- Private University: $54,000/year*
- *Varies per university, see each university’s website for exact costs
- University A
Room & Board: $13,000
Personal Expenses: $2800
Total COA: $32,400/year
- University A