Who Gets What?
An inside look at how colleges gauge your financial need
The Players
First, you need to know the major players:
The U.S. Department of Education. This federal agency is the single most important arbiter of your financial-aid fate. Government computers spit out an "expected family contribution," or EFC, after a student fills out the Free Application for Federal Student Aid, or FAFSA, which is available on the Web at www.fafsa .ed.gov/. This form is used to decide student eligibility for federal Pell Grants, Stafford Loans, and most state aid. A family of four with $65,000 in income and $20,000 in nonretirement savings, for instance, would be expected to come up with about $8,600 for the year.
The College Board. This private, non-profit organization, which also runs the SATs, charges applicants $5 to process its Web-based College Scholarship Service Profile application (http://profileonline .collegeboard.com/index.jsp), which is required by many private schools. It charges an additional $17 for every college to which you have the profile sent. The profile asks more about assets and investments than the FAFSA to gauge whether a family may be able to afford more than its earned income would suggest. And the profile generally spits out a higher EFC. The College Board says that the same $65,000 family would get an EFC of about $9,000 from the profile.
Your college's financial aid officer. Each officer applies the school's own methods in determining each award and can also factor in extenuating circumstances such as a recent job loss. At Princeton University, which has one of the most generous aid policies in the nation and doesn't require loans at all, the $65,000 family could get about $30,000 of the $39,000 cost paid for by grants. If it had two children in college, even a family with total income of $120,000 and $50,000 in nonretirement savings could receive as much as $29,000 for the Princeton student.
Most schools aren't so generous. Public universities typically leave a $3,800 gap between students' official need calculation and their actual aid, while private colleges leave a gap of more than $6,000. That gap will very likely grow next year, as colleges face continued economic troubles.
To make what they consider strategic use of their limited aid dollars, colleges are increasingly awarding more money to kids with top grades and test scores or who bring ethnic or geographic diversity. That's one reason Alex Fenske, a straight-A student with high test scores, will be getting a full $25,000 ride at Purdue University in Indiana this year, even though the FAFSA calculated his family should contribute $4,677 to his education. His older brother, Doug, a B student with exactly the same EFC, got only a $500 grant to help pay the $9,000 cost of studying at Eastern Illinois University in Charleston.
The 568 Group. This newcomer on the financial aid scene is made up of 28 of the nation's top colleges, including Amherst College, the University of Chicago, the Massachusetts Institute of Technology, Columbia, Duke, Georgetown, Rice, Stanford, and Yale. (Four of the Ivies are not participating: Brown, Dartmouth, Harvard, and Princeton.) The group, named after a law that waives antitrust provisions to allow the members to meet, wants to lessen the confusing variation in offers by requiring aid officers to use the same method for determining need. Applying for aid "should not be like bargaining in a bazaar," says Morton Owen Schapiro, president of Williams College and a member of the group. Critics fear the new approach will reduce competition (box). But colleges in the group respond that they can still package aid differently from one another (offering a more favorable ratio of grants to loans, for instance).
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