The Process of Aid Allocation

What happens when you apply for financial aid will vary from institution to institution.

At the public universities the Financial Aid Office will process the FAFSA (Federal Application for Financial Student Aid - see Applying for AID), and once you are admitted, will make a financial aid offer based on its formulas for dispensing student aid. In-state and out-of-state students will be treated differently, as will other special groups that may apply for aid. Nevertheless the public universities will make a predictable financial aid award.

The private colleges and universities will react to financial aid applicants in one of three ways: they will base their offer on the FAFSA as the state schools do, or they will base it on the CSS computation, or they will combine one or both of these Estimated Family Contributions with their own formula for conferring aid. This practice is referred to as following institutional methodology (IM). These different methods of computing student financial aid explain the variation in aid awards from colleges with similar tuitions and cost of attendance.

Two terms will be helpful in understanding the awarding process. The first is need-blind admissions, meaning that the particular college does not take a family's ability to pay into account in making the admissions decision. In fact, the college keeps the admissions decision separate from the financial aid decision. Only the very wealthy colleges and universities are able to offer a need-blind financial aid program.

Need-sensitive financial aid describes a policy of awarding aid based on the desirability of the student to the college, the special talents or background that he or she brings to the college community. Need sensitive financial aid awards generally meet all the need that a family may have, based on its EFC, but the awards to students with identical financial need will differ in the amount of grant and loan in the award package This variation reflects the college's desire to have the student attend: the higher the grant portion the more enthusiastic the college is about the applicant. Need sensitive financial aid also includes the practice of awarding merit scholarships to students who have high ability in a particular area, but who do not qualify for financial aid.

As a rule of thumb students and parents should make sure to inquire about each institution' financial aid policy. The best way to begin this conversation may be to ask about the school's capacity to meet a family's full need and then find out about the availability of merit scholarships.

Students and parents should keep in mind that colleges and universities are competing with each other for the good students out there, and this competition benefits applicants and families. The trick is to find colleges who are really interested in your talents and potential contribution to their community. College Center can help you with identifying appropriate schools. More important, we can assist in setting your overall strategy for applying to colleges that can fulfill your financial as well as your academic and social expectations.

What if I don't qualify for financial aid?