How is Financial Need Calculated?

Financial Need (FN) is a calculation made to determine the amount of money that a school would need to help your family find a way to afford so that you may attend that school. This amount is calculated by taking the total Cost of Attendance (COA) and subtracting from it the Expected Family Contribution (EFC). The amount left is then usually taken into consideration by the college to calculate the size of your financial aid package. So, FN=COA-EFC.

Calculating the Cost of Attendance

The Cost of Attendance means the total costs and fees of attending the college for a year, including tuition, living expenses, transportation, college textbooks and supplies, and so on. This amount can usually be found on the website of the college that you are interested in attending, usually in the financial aid section of their website.

Expected Family Contribution

The Expected Family Contribution is the amount of money that the school believes that your family is capable of paying for a full academic year of college. To determine your Financial Need, you need to calculate your Expected Financial Contribution carefully. First, are you a dependent of your family or not? This means, are you a minor (under the age of 18) and are your parents listing you as an independent on their federal tax returns for the year that you will be entering college? If you are dependent of your parents, then you will need not only information about your own finances, but about theirs as well. After this, you will need to calculate a certain percentage of your own annual income and assets, and then calculate a certain percentage of your parents’ adjusted income and assets. The number of other children that your parents have and that are or will be attending college at the same time as you will also have an effect on your Expected Family Contribution. The calculations can be a little complex, so most colleges will require that you and your family fill out some standardized forms that provide the information needed to calculate your EFC. These forms are the FAFSA (Free Application for Federal Student Aid) and the CSS/Financial Aid Profile (College Scholarship Service/Financial Aid Profile). However, there are also some online tools that will help you calculate your EFC. You can try using the EFC Calculator at: http://webapps01.act.org/fane/docs/. Remember, however, that in the end, it is the college that will end up deciding how to use your calculation of Financial Need to determine what, if any, financial aid the school can actually offer to you.