U.S. Financial Aid Basics

What makes one college more expensive than other? Consider more than tuition to figure out the cost of attendance at different institutions. The cost of attendance includes:

  Tuition & Fees
  Room & Board
  Books & Supplies
  Personal Expenses
  Cost of Attendance

Your Expected Family Contribution (EFC) is the minimum amount colleges expect you and your family to pay for a year of college. Your EFC is recalculated yearly based on information from your annual aid application(s). 

There are two formulas used to calculate your EFC: the Federal Methodology and the Institutional MethodologyIf you are a U.S. Citizen or Permanent Resident, you can file the Free Application for Federal Student Aid (FAFSA). The U.S. federal government then uses the data in that form (the student and parent's income and assets, and factors such as the age of the oldest parent) to assess your EFC; colleges must use this EFC when awarding federal and state aid.

The institutional methodology is another formula used mostly by private colleges to allocate institutional aid. This formula takes into account other factors not in the Federal Methodology, including the value of a home your family own. These colleges require an additional financial aid application, usually the CSS/Financial Aid PROFILE, in order to get a more informed view of a family's ability to pay for college.

Your financial need is then calculated as such:

  Cost of Attendance
Estimated Family Contribution
  Financial Need

Colleges may choose to meet your financial need through three ways:
  1. Scholarships (gift money that does not need to be paid back)
  2. Loans (money that needs to be paid back)
  3. Work Study (a part-time job, usually on campus; income from work-study does not reduce your aid eligibility)
Colleges may meet your full financial need, or they may only meet part of it, a situation known as gapping. Obviously, a financial aid award that includes more scholarships is favorable to a financial aid award that includes more loans.

What you will actually pay to attend any college is not necessarily the COA. Your real cost is called your net price, which includes your EFC, any financial need that your college doesn't cover, and any financial aid in the form of loans or earnings from work-study.

Examples of Public and Private Estimated Cost of Attendance

Here are some COAs that colleges reported for the 2018-19 academic year. These costs are for undergraduates living on campus and enrolled in liberal arts programs.

Public Institutions (for non-residents)
University of California, Berkeley - $64,250
University of California, Los Angeles (UCLA) - $63,669
University of Michigan - $64,386
University of Massachusetts, Amherst - $49,517

Private Institutions
Stanford University - $71,587
University of Southern California (USC) - $74,825
University of Notre Dame - $71,801
Boston University - $72,618

While the cost of attendance at private institutions is usually higher than at public institutions, note that they may be able to give larger scholarships than public institutions. You will have to compare the net price at each institution.

Published on November 28, 2018