Eligibility can vary significantly from one college to the next simply because of the COA. At College A, the student can receive up to $40,000 in financial aid, but is only eligible for up to $10,000 at College B.

Colleges determine eligibility for need-based financial aid by subtracting the Expected Family Contribution (EFC) from the college’s Cost of Attendance (COA).

Cost of Attendance (COA):

An institution’s total cost for the academic year including direct expenses (tuition, fees and room & board) and estimated indirect expenses (books & supplies, travel, and miscellaneous or personal expenses).

Expected Family Contribution (EFC):

Calculated using information reported on the FAFSA, it’s a measure of how much the family can contribute to college expenses for one year. Colleges that require the CSS Profile or their own application in addition to the FAFSA, will use those forms to determine eligibility for institutional aid.

The Financial Aid Package

Once financial need is calculated, the college will prepare a financial aid award or package, which can include a combination of the following types of aid from federal, state and institutional sources:

Grants/Scholarships: Free money awarded based on financial need or other factors such as grades and standardized test scores.

Work Study: Helps students meet indirect college expenses, such as books and supplies, by finding a job on campus and earning money throughout the year in a regular paycheck.

Student Loans: May be offered to students and/or parents to help cover college costs. Federal Direct Loans for students are the most common, and they have fixed interest rates, flexible repayment options and no credit requirement for students.

You may also like:


10 Financial Aid Terms to Know

10 Financial Aid Terms to Know

Going through financial planning for college, especially for the first time, can feel overwhelming. Luckily, you have us. Here are some key terms to get a jump on.   1. FAFSA The Free Application for Federal Student Aid (FAFSA) is required by all colleges. In...

What to Know About the CSS Profile

Even if you are new to the financial aid process, you’ve most likely heard of the FAFSA. But this might be the first time you are hearing about the “other” financial aid form, the CSS Profile. Used by roughly 400 institutions, the CSS Profile helps colleges,...

Saving for College Myths Demystified

Saving for College Myths Demystified

True or False? You can only enroll in one 529 plan. False! Amy Irvine, financial planner at the Rooted Planning Group, explains what's really possible.   True or False? You can only enroll in one 529 plan. Amy: That is absolutely not true. There are several...