Will we qualify for need-based financial aid for college? – A question on the minds of most parents with college-bound high school students. The answer is going to depend on many things, with the biggest being parental income. Let’s go over some general factors on who qualifies for need-based aid for college and how to estimate whether your student will qualify.

Who Qualifies for Need-Based Financial Aid?

It is going to vary greatly from college to college.

  • As a generalization, families with yearly incomes under $150,000. Once you get above $100,000, the schools that will offer your student any need-based financial aid are going to start dropping off very quickly. Mostly what you have left are very competitive, very hard to get into colleges that claim to meet 100% of a student’s financial need.
  • Families with more than one student in college at the same time. 
    • Currently – When you have more than one student in college, your Expected Family Contribution (EFC) number gets cut pretty much in half. So if one student in college results in a $40,000 expected family contribution, two students in college will cut the EFC for each student down to around $20,000. Unfortunately, however, with the upcoming changes being rolled out by the Department of Education via the FAFSA Simplification Act, the sibling discount will cease to exist after the 2023-24 school year.
    • 2024-25 and beyond – Multiple siblings/students in college at the same time will no longer have an impact on your family’s Expected Family Contribution (EFC) starting in the 2024-25 school year. In other words, the FAFSA that becomes available on 10/1/23 will reflect this change. This, in our opinion is one of the biggest detrimental changes that have been proposed. This is very important to consider when planning for all four years of college if you happen to have multiple students in college at once. Private schools and a few public schools who require the CSS Profile are not required to follow this mandate to award their endowment money so this a significant planning opportunity for families.
  • Families with a large number of dependents. While schools weight the number of students in college at the same time more heavily, it will also matter how many overall dependents your family income is supporting.
  • Students who get into the most exclusive colleges. This is going to be heavily dependent on the family income and these schools are going to look at more than just the Free Application for Federal Student Aid (FAFSA) in determining how much aid to award, but colleges like the Ivy League and other top tier, low acceptance rate schools are more generous in awarding need-based aid.  

Estimating Your Student’s Potential Need-Based Financial Aid

Start with figuring out your estimated family contribution. How do you do this?

  1. Use MyCAP – MyCAP includes an instant net price calculator. By entering a few financial fields, you will be able to see what any college will expect you to contribute.
  2. Run Net Price Calculators on a variety of college websites. How do you find the Net Price Calculator on a college’s website?
  • You can type “net price calculator” into the search field on the school’s home page.
  • You can go to the Financial Aid or Admissions section of the school’s website and look around for it.
  • You can use the government’s Net Price Calculator Center or MyCAP’s calculator.
  • You can find the link on a college search website like collegedata.com by entering the school name to get data for that school.
  • You can try the College Board Big Future Net Price Calculator. This will allow you to calculate the expected family contribution  (EFC) for a large number of colleges.

Whether you use MyCAP or individual net price calculators, make sure you understand what your Expected Family Contribution will be at this variety of colleges:

  • In-State Flagship University
  • In-State Smaller Regional Public University
  • Out-of-State Public University that has a reciprocity agreement with your state (discounted out-of-state tuition)
  • Out-of-State Public University that does not have a reciprocity agreement with your state
  • Regional Private College
  • Top-tier, highly selective admissions schools
  • Any other colleges your student has expressed an interest in

Covering your bases by running net price calculators at the variety of colleges outlined in #3 above will give you a good idea where you stand overall related to need-based financial aid. Are all types of schools estimating you will receive need-based aid? Are only the most expensive and most competitive schools estimating you will receive need-based aid?

This difference in need-based aid offerings is primarily based on three factors. 

  1. EFC Methodology – First is what methodology the school uses to determine your expected family contribution. There are 3 methodologies: Federal, Institutional and Consensus. Federal schools use only FAFSA to determine need-based aid. Institutional schools use both FAFSA and the CSS Profile. Consensus schools have agreed to their own methodology. 
  2. Home Equity – Schools that use the Federal methodology do not care about home equity. However, schools that use Institutional or Consensus methodologies do. You would think that schools using the same methodology would be consistent in home equity treatment, but that is not the case. This is why it is important to look at many different schools to see how your EFC differs.
  3. Generosity – Colleges also differ on the average percentage of your need they will meet. The most generous schools advertise that they meet 100% of need. Of course that means the school’s calculation of your “need”, not your own!

We know this all seems a little overwhelming! At College Aid Pro™, we are here to help you figure out how to maximize your family’s chances for need-based financial aid. Sometimes a little personal guidance is what you need to get started looking in the right direction. Our Valedictorian plan gives you an hour with one of our college planning experts along with a full year’s subscription to MyCAP.

Along with understanding whether or not you will be offered need-based financial aid, it is also important to understand the types of need-based financial aid because some are “free” money, and some need to be repaid.