Need-based Financial Aid

Having worked with hundreds of students through our College Planning Cohort Program, and having reviewed hundreds of Financial Aid Award Letters, we have gained first-hand insight into the array of financial aid policies across the college admissions landscape. Students and parents typically believe that the EFC (Expected Family Contribution), as computed by the U.S. Department of Education, after processing a student’s FAFSA (Free Application for Federal Student Aid), is the amount that parents (or independent students) are required to pay toward the costs of attending college.

Many institutions will play on the naiveté of students and parents by providing intentionally misleading Financial Aid Award Letters, which suggest that students with ‘0’ or low EFCs will not pay anything toward their college costs. The most common practice involved in this deception is to list Federal Student Loans under the caption, ‘Awards,’ or using such language as, “We are pleased to offer.” while also failing to disclose the estimated Cost of Attendance.

As a result, students and parents assume thousands of dollars in student loan debt as a means of reaching their ‘0’ EFC. Any remaining financial aid gap is oftentimes closed with a combination of small scholarships such as, Achiever’s Scholarship, Trustee Scholarship, Dean’s Scholarship, etc., which are not renewable after the student’s first year. To register for second-year classes, students simply take out more student loan debt and the process continues year after year until students reach their federal student loan maximums, at which time, many students simply stop attending college.

So what does ‘Need-based’ financial aid really mean?

Need-based financial aid simply means that a college will assist in meeting a student’s full financial need, based on either the EFC, as generated by the FAFSA, or the financial need as determined by the CSS/Financial Aid Profile. However, the means through which a student’s financial need is met will vary widely from being met with generous need-based institutional scholarships and grants, to being met with thousands of dollars in student loans. In this regard, there are institutions that have ‘no-loan’ financial aid policies, where student loans are not considered as part of their financial aid formula, and other institutions where student loans represent the most significant part of their financial aid formula.

How do I identify the institutions that offer the most generous institutional scholarships and grants?

Go to the US News and World Reports college rankings and the colleges with the most generous need-based financial aid policies are atop the rankings and among the most selective institutions to which a student can be offered admission. For example, Williams College is the top ranked liberal arts college in the United States and has the most generous financial aid policies that we have experienced through our students. Students with demonstrated financial need receive free books, assistance with their health insurance, transportation, and other unexpected costs associated with attending Williams College. Amherst College, the number two ranked liberal arts college is nearly as generous. Our students with demonstrated financial need have received institutional scholarship offers from Amherst College covering overing 94 percent of the $72,000 per year estimated Cost of Attendance (after application of the US Pell Grant).

Students and parents must carefully research colleges long prior to submitting applications if students are to position themselves for being offered admission to institutions with the most generous need-based financial aid policies. We have listed institutions, of which we are aware, with some of the most generous need-based and institutional scholarship programs:

Top liberal arts colleges: Williams, Amherst, Bowdoin, Swarthmore, Middlebury, Pomona, Carleton, Claremont McKenna, Davidson, Washington & Lee, Colby, Colgate University, Harvey Mudd, Smith, Vassar, Grinnell, Hamilton, Haverford, Wesleyan University, and Bates.

“Williams has one of the most generous financial aid programs in the country, thanks to generations of gifts from alumni, parents, and friends. It allows us to award more than $50 million a year in financial aid to more than half of all Williams students. Our financial aid program is based entirely on need, and we meet 100 percent of every student’s demonstrated need.  We are committed to working with you and your family to make a Williams education affordable.”

“We aim to ensure high-achieving students from all backgrounds realize a Colby education is accessible regardless of their families’ means,” said Vice President and Dean of Admissions and Financial Aid Matt Proto. “Colby has many ways of expressing this commitment, most notably that we meet the full demonstrated need of admitted students using grants, not loans, in financial aid packages. This cost estimator is another tool for families to see that a Colby education is possible.”

The Ivy League: Brown, Columbia, Cornell, Dartmouth, Harvard, Princeton, University of Pennsylvania, and Yale.

“Princeton has a long history of admitting students without regard to their financial circumstances and, for more than a decade, has provided student grants and campus jobs — not student loans — to meet the full demonstrated financial need of all students offered admission.”

Top national universities: University of Chicago, MIT, Stanford, Duke, CalTech, Johns Hopkins, Northwestern, Rice, and Vanderbilt.

“Providing for college is one of the largest single investments a family will make, and we strongly believe that a Vanderbilt education is well worth the investment. Opportunity Vanderbiltreflects our belief that a world-renowned education should be accessible to all qualified students regardless of their economic circumstances.”

“We make three important commitments to U.S. Citizens and eligible non-citizens to ensure that students from many different economic circumstances can enroll at Vanderbilt. Vanderbilt will meet 100% of a family’s demonstrated financial need. Instead of offering need-based loans to undergraduate students, Vanderbilt offers additional grant assistance. This does not involve income bands or “cut-offs” that impact or limit eligibility.”

How many colleges should I apply to?

Because financial aid policies so widely vary by institution, the rule of thumb for students who qualify for need-based financial aid, is to apply to as many selective institutions as possible, to which the student is a strong candidate for admission, so that they student and their parents will have many financial aid award letters upon which to base their financial college choice.

The devastating impact of making the wrong college choice