How is financial need determined?
A U.S. family’s ability to pay, known as the Expected Family Contribution (EFC), is calculated using a formula adopted by Congress and the information submitted by the applicant. The EFC is subtracted from the student’s estimated education cost and leaves a gap, which is the determined need of that student. At least a part of an undergraduate student’s financial need is then met through a combination of scholarships, grants, loans, and Federal Work-Study. [Back to Top.
Need is a technical term defined by state and federal agencies. You will be evaluated according to a process called need analysis .* Through this process, a determination is made as to the amount your family can reasonably be expected to contribute toward your educational expenses. The difference between this amount and the cost of your education is called the established financial need and is the maximum need-based financial assistance you may legally receive.
Most financial aid is awarded based on financial need. When a student applies for financial aid, the information reported on the Free Application for Federal Student Aid (FAFSA) is used in a formula established by the U. S. Congress. This formula determines the student’s and/or family’s expected family contribution (EFC). If the EFC is below a certain amount, the student may be eligible for a Federal Pell Grant, assuming he/she meets other eligibility requirements.
