Determining Financial Aid Need

In the world of financial aid, financial need is determined by subtracting the total Expected Family Contribution (EFC) from the Cost of Attendance (COA), and the resulting number is the calculated financial need amount. The Financial Aid Office will use the calculated financial need amount to ultimately determine specific financial aid program details and award amounts.

To give you a better understanding of how it all works, let’s walk through the financial aid awarding process by looking at the following example. In the following sample case, the student has a calculated Expected Family Contribution (EFC) amount of $7,000, and is attending a college with a Cost of Attendance (COA) equaling $40,000—thus, their calculated financial need equals $33,000. Please review the sample case below to gain an understanding of how these numbers are used when awarding financial aid:

Sample Student Case

Cost of Education (COA)


Expected Family Contribution (EFC)


Calculated Financial Need


Grants and Scholarships*


Student Loans (Stafford & Perkins)*


Federal Work Study*


Total Aid *


Unmet Need (Calculated Financial Need minus Total Aid)


Family’s Total Responsibility (EFC + Unmet Need)


*This is just an example to illustrate how the formula works – purely a generic financial aid package example for conceptual purposes.

Need-based financial aid may be awarded up to the calculated financial need; however, financial aid offices may or may not be able to award a student up to their full calculated financial need, thus there will be a “gap” in the financial aid package. A gap exists when the total financial aid awarded does not equal the total calculated financial need. In this situation, a family would need to plan their financing accordingly. More specifically, the family would need to cover both the Expected Family Contribution (EFC) amount and any amount of unmet need, or gap. Some colleges will award a student to their full need; others may not. A college’s funding levels, their awarding policies, and federal funding levels and appropriations determine financial aid awarding policies.

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Although we have a number of solid examples and case studies on this site, we have even more in our newly updated Financial Aid Sense publication. Don’t be in the dark about financial aid opportunities, check out Financial Aid Sense today! "Customer Reviews for Financial Aid Sense"

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Jan Marie Combs, EzineArticles Basic Author