Many families will confuse their financial need, as determined by subtracting the Expected Family Contribution from the Cost of Attending a college, with the actual financial aid that they will receive from the colleges and universities. They often
make this assumption after they apply to schools that as a matter of policy carry out their admissions process in a “need-blind” manner. The assumption is that need-blind admissions leads to meeting all your financial need. Making such an assumption can be a big mistake.
A need-blind admissions process simply means that a college or university will not take into account your ability to pay for college when it considers the student for admission. This is a good thing. It is not a guarantee that you will receive financial aid to meet your financial need. Many schools that carry out a need-blind admissions process have terrible financial aid. Just because you can get accepted at these schools does not mean you will receive all the money you need to pay for the school after acceptance.
Families also need to understand that financial need will be determined by the individual schools based on the families perceived ability to pay, as summed up by the Expected Family Contribution. This number may be determined differently at each school to which a student applies. The other variable, the Cost of Attending, is also determined by each individual school. Therefore financial need is a moving target.
A family must first determine whether they can meet the Expected Family Contribution as determined by each school. Just because the federal government or a school says you can meet this obligation does not mean you really can. Take a close look at this number based on your own knowledge of your finances.
It is also important that a family understand the likely percent of need met at each school to which their student applies. Many schools as a matter of policy are very generous and will meet 100% of your need. Other schools cannot be so generous. Looking at historical numbers for each school’s ability to meet need is a good indicator of whether a school is likely to meet your need. Knowing this ahead of time can usually reduce the cost of an education significantly.
Understanding the financial aid process at each school before a student applies is a necessary part of your financial aid plan. Having an accurate estimate of your Expected Family Contribution at each school, and the expectation of need met, will more likely lead to a better financial aid award.