How is financial aid calculated?
Once you’ve filled your FAFSA and received your student aid report, a particular amount under the name of financial aid will be allocated to you, given that you meet all the basic eligibility criteria. You would need to apply for this financial aid for every year that you spend in college and each year this financial aid will vary on the basis of various changing conditions. Since every single unit counts, it is important for one to know how the financial aid is calculated, where it could be increased or where it has decreased and how one will manage with the changes in the aid.
On the basis of various factors, the financial aid office at your college will make a decision on the financial aid that should be allocated to you. Their first step of action would be determining the cost of attendance of the particular school. Given that you attend at least half-time, the cost of attendance includes tuition, room and board cost, the cost of books and supplies, costs related to disability (if any) including some other expenses. Your expected family contribution is then taken into consideration. Expected Family Contribution (EFC) is a measure of the capability of you and your family to pay for college through the family income and assets. So, the amount that the college has to look at would be the difference between your cost of attendance and expected family contribution which is nothing but your financial need. On the basis of this financial need, a need based aid will be generated. In order to calculate your non-need based aid, the college would subtract the financial aid you’ve already been rewarded (from other sources such as school or scholarships) from your cost of attendance.
The financial aid that does not depend on the expected family contribution is known as non-need based aid. For instance, if your cost of attendance is $18,000 and $6,000 has been covered through need based aid, scholarships and other sources, the remaining $12,000 could be covered in your non-need based aid.
One can also compare different financial aid to get a better understanding of the college aid and also look for free grant applications.
