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  • Writer's pictureNeil Chacko, CFP®, CKA®

Will My Child Qualify for Financial Aid?

This is a question that many parents ask. However, there is no simple answer to this question because there is no automatic income cut-off that exists that disqualifies students for need-based aid. However, do not let this reality discourage you.

There is a valuable tool that will calculate a figure known as your Expected Family Contribution, or EFC*. This is a dollar amount that represents what a financial aid formula has concluded that you should be able to pay for one year of your child’s education. It is based on a number of factors including, but not limited to, income, assets, marital status and whether or not you have other children in college.

As an example, an average American family of 4 making an adjusted gross income of $87,000 would have an EFC in the $6,000-$9,000 range. There is no EFC ceiling for high-income parents. You can calculate your EFC by going to and typing in “EFC Calculator” in the search field.

Determining if your child would be eligible for need-based aid requires subtracting your EFC from a school’s cost of attendance. For example, if the cost of attendance for an in-state student at a state university is $22,000 and the EFC for a family is $9,000 there is $13,000 in demonstrated financial need. Some institutions will meet this need with aid in the form of grants, or merit-based scholarships. Others may only meet it in the form of student and/or parent loans. Some institutions will use a combination of both of these. Also, not all institutions will meet 100% of demonstrated financial need. Some will only go to 75% or even less. Every institution is different and has different levels of generosity when it comes to financial aid.

In the past, parents were unable to know what any college was going to cost until their children received their award letters. However, many colleges don’t send their award offers until the spring which gives families very little time to select a school by the deposit deadline of May 1st . However, you can now use a tool called a net price calculator before your child applies to any college. The aim of a net price calculator is to provide a personalized estimate of what a particular school will cost your family before your child falls in love with it. The net price represents what a student will have to pay after any scholarships and grants from the federal and state government, as well as the school, are subtracted. You can find a school’s calculator by Googling for the school and “net price calculator” in the search field.

However, there are good net price calculators and not-so-good ones out there. A good one will require figures from your tax return and account statements for non-retirement assets. It will also ask detailed questions about your child’s GPA and test scores as well as the size of the household and marital status of the parents. Unfortunately, more than 50% of public universities and about 25% of private universities use inferior calculators which clouds the college purchasing decision even more for parents.

Our firm uses the premier software that has been over 90% accurate in determining what the net cost would be at almost any school in the country. We have been able to use it to help families of high school sophomores and juniors create a tangible game plan on which colleges belong on their target list and which ones are unaffordable without taking on massive amounts of debt.

If you would like to discuss this or have any other questions on the financial aid process, please book a free consultation using the link below:

In next month’s blog post, we will cover the documents that a parent or student would complete to qualify for financial aid: the FAFSA (Free Application for Federal Student Aid) and the CSS Profile.

*Expected Family Contribution will be replaced with Student Aid Index in 2024

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