Plenty of madness reigns in the methods used to compute
your EFC and, ultimately, your need. You can take advantage of this
madness to raise your costs, lower your EFC, and increase your aid,
but first you need to know how financial aid administrators come
up with these numbers.
The Federal Way
The primary method of determining your EFC is the one
used by the Department of Education in the Free Application for
Federal Student Aid, known affectionately by millions of students
nationwide as the FAFSA. The FAFSA will require you to provide personal
information such as family size, marital or dependent status, income,
and assets. An organization known as the Federal Processor then
calculates your level of eligibility for financial aid. The formula
used by the Federal Processor is known as the “federal methodology.” Life
would be simple, indeed, if this were the only formula used by colleges
to calculate your student financial aid package. Unfortunately,
this is often not the case.
The Institutional Way
Many schools require you to submit other applications
in addition to the FAFSA. More than 600 schools, for example, use
the CSS/Financial Aid PROFILE form to determine students’ eligibility
for nonfederal financial aid. Plus, colleges usually have their
own financial aid forms and make their calculations using the “institutional
methodology.” A college’s institutional methodology is often stricter
than the federal methodology, taking into account not only your
financial assets but also the value of any property you or your
family may own, including your home, which the FAFSA does not do.
Remember: Most financial aid forms have their own deadlines.
As soon as you’ve decided which colleges you’ll apply to, you should
contact the financial aid office at each one to find out which forms
they require so you have plenty of time to complete them.