Behind the Curtain: How Much Will that Dream School Cost? 

By Jane Klemmer

Illustration by Giselle Lora

The real cost of attending a college often remains a mystery prior to receiving the actual financial aid award letter. This can lead to a great deal of disappointment for students if they are not aware of how financial factors may impact their final college decision. However, families do have access to information that can serve as helpful tools in estimating what the cost of attending a particular school might actually be and whether a student is likely to qualify for one or both types of financial aid: need-based and merit-based aid. 

Need-based aid is allocated based on a family’s demonstrated need for financial assistance to pay for college. Eligibility is determined by considering the income and assets of both student and parents. The two financial aid forms most commonly used to calculate need are the Free Application for Federal Student Aid, more commonly known as the FAFSA, and the CSS Profile. The former is required by all federally funded colleges, while the CSS Profile is an additional form used by roughly 300 private colleges and public universities to determine allocation of institutional resources. Aid may come from a variety of sources, including federal and state governments. 

Upon completing the FAFSA, the student receives a Student Aid Report, or SAR, which shows the Expected Family Contribution (EFC) or demonstrated need as determined by the financial aid formulas. But here’s an important caveat: Just because the FAFSA shows that you will qualify for a certain amount of aid does not necessarily translate to what the college package will offer. Many colleges do something called “gapping,” meaning the aid award falls short of the calculated demonstrated need. Furthermore, aid comes in three forms: grants, loans, and work study. Only grants are free money that does not need to be repaid like a loan, or require working a campus job. College assistance is typically the primary source of financial support for most students. A point to note is the upcoming overhaul of the methodology used to determine federal student aid eligibility. While the Department of Education continues to make adjustments to the FAFSA, the effective dates keep getting pushed back. Stay tuned for more updates to understand how these changes may affect you. 

Many colleges do something called “gapping,” meaning the aid award falls short of the calculated demonstrated need

Merit aid is often even less predictable, as it is usually not driven by pre-determined formulas but rather factors unrelated to a family’s financial need. Most often it is gift aid for academic performance, but merit aid can also be awarded for a special talent or athletic abilities, as is the case for some recruited athletes.  

How do we know if we will qualify for any financial assistance and determine the likelihood of receiving aid? 

If you think your family might be eligible for need-based aid, take the time to complete each college’s Net Price Calculator (NPC) which you’ll find on the financial aid, or tuition and fees pages of a school’s website. A NPC will give you an estimate, and since colleges choose a standardized form or create their own calculators, some are more predictive than others. Nevertheless, these calculators which all colleges receiving federal funding must make available, provide some idea for whether you’ll qualify and what you might be expected to pay. Some 75 colleges also participate in MyIntuition, an easy-to-use college cost estimator which incorporates merit aid estimates for colleges that provide non-need assistance. The list of participating schools is growing. 

To learn more about the possibility of receiving adequate aid to fund the college education or the likelihood of gapping, a useful resource is College Data. On the site, go to College Search to find a college and look for the Financials tab in the menu. For information on need-based aid, the most enlightening information can be found under Need Fully Met (the percentage of students who had their full financial need covered), Average Percent of Need Met (the degree to which students are gapped) and the Average Award offered. Ideally, you hope to see percentages at or near 100% and Average Awards that cover a good portion of the cost of attendance. Lower down on the same page, you’ll find information on merit aid and can calculate the percentage of entering freshmen who actually receive any, along with the average award. A handful of the most selective colleges offer no merit aid, devoting 100% of their financial aid resources to need-based aid. If receiving merit is an important consideration, use the College Data financial information page to avoid surprises later on. 

“A handful of the most selective colleges offer no merit aid, devoting 100% of their financial aid resources to need-based aid.”

Knowing the type of aid offered is only the first step to estimating one’s likelihood of receiving merit aid. It’s also important to determine how the applicant compares academically within the admitted pool of students. For example, if 20% of students receive some merit aid and the college is a stretch for the applicant, apply knowing that if accepted, the probability of receiving merit aid is low. Still, none of these tools will give you a definitive answer. Rather, use them as a guide, knowing that these are decisions made in the admissions and financial aid offices often based on how much they want the student to attend. Furthermore, both need and merit aid policies at colleges are never static. Tulane had been known as a generous provider of merit aid, a way to attract strong students and increase their yield, while gapping students with a financial need. As the university has become more selective and popular, they are reducing their merit awards and shifting toward serving more students who demonstrate a financial need.

As you begin the college journey, don’t ignore the elephant in the room. Knowing the cost of attendance, what you can afford to pay over four years, and the likelihood of receiving any aid should be discussed from the start. Having a family understanding about what’s affordable is essential to finding success in the college process and avoiding later disappointment. 


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