Financial Aid Case Study

Because the financial aid process can be daunting and confusing, there is a sample case included below for the purpose of illustrating how the financial aid formula is used to determine financial aid. This is a generic financial aid package example for conceptual purposes only. When thinking about Cost of Attendance (COA) and Expected Family Contribution (EFC), many have benefitted by working though case studies such as the one included below:

In this example, Sally Student will attend a private college, Sunny University, located in Florida, although she is a legal resident of Massachusetts. Sally lives with her parents and is one of three children, two of which will be in college during the upcoming academic year. Sally filed the FAFSA and the CSS Profile Form by the stated deadlines.

Cost of Attendance (COA) *

$ 44,000

Expected Family Contribution (EFC)**

$   5,468

Financial Need

$ 38,532

    Financial Aid Package

         Sunshine Grant ***

$ 20,000

         Restricted Scholarship ****

$ 10,000

         Federal Direct Stafford Loan

$   3,500

         Federal Work Study

$   3,000

     Total Aid Package    

$ 36,500

Unmet Need (gap)        

$   2,032

 Family Responsibility (EFC + GAP)

$   7,500

 Family Budgeted Amount (Family Responsibility Amount + Any Additional Needs)       

$   9,400

        

The Expected Family Contribution (EFC), in part, is what the family needs to cover for ONE YEAR of college. The family will also need to account for any gap in the aid package, plus any additional expenses that the student has that are not already included in the Cost of Attendance (COA) provided by the college.

EXPLANATIONS FOR FINANCIAL AID CASE STUDY ABOVE

 *COA = $44,000 ($30,650 Tuition, $250 Athletic Fee, $500 Health Insurance Fee, $8,500 Room and Board, $1,000 Books and Supplies, $2,500 Personal Expenses, $600 Transportation = $44,000 Total).

**Federal Expected Family Contribution (EFC) was determined by filing the FAFSA. The Federal formula took into consideration that two children were in college at the same time.

Financial Need is determined by subtracting the Expected Family Contribution (EFC) from the Cost of Attendance (COA).

*** Sunny University is a private school and required the CSS Profile Form, which was used to determine eligibility for the Sunshine Grant, an institutional grant program.

 **** The Restricted Scholarship, in this sample case, is a one-time grant awarded to freshmen only. Always ask a college if a restricted scholarship is renewable in future years and carefully review the renewal criteria.

 Family Responsibility is composed of the Expected Family Contribution (EFC) amount of $5,468 plus the calculated unmet need (or gap) of $2,032. Some colleges will award financial aid up to full financial need; however, having a gap is very common.

Family Budgeted Amount is determined by the Family Responsibility amount of $7,500 plus anything specific that the individual student may need. In this case, the extra $1,900 that the family is budgeting includes 3 round-trip plane fares between Massachusetts and Florida ($300 each trip) plus a laptop ($1,000) which brings the total up to $9,400.

This case was included to demonstrate how financial aid is calculated and some of the things to consider when making your college financing plan. There are many sample cases of this kind in Financial Aid Sense which are a helpful resource to families with college bound children.

For more case studies and information on financial aid, check out Financial Aid Sense – newly updated publication replete with what you need to guide you through the college financial aid process. See what our readers are saying about Financial Aid Sense.

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Jan Marie Combs, EzineArticles Basic Author