The ABC's of Financial Need

Eligibility for financial aid is based on an analysis of student and family financial need, supplied by information provided on the FAFSA, the Free Application for Federal Student Aid.

Financial Need = Cost of Attendance -- Expected Family Income Contribution.

Cost of Attendance -- COA

Cost of Attendance (COA) is made up of all the direct and indirect costs of attending a college.

Direct costs are paid directly to the college.

  • Tuition
  • Fees
  • Room and Board

Indirect costs are expenses not necessarily paid directly to the college, but are part of attending college. While each college provides an estimate, these costs vary depending on your personal requirements. Indirect costs may include:

  • Books
  • Transportation
  • Personal care items
  • Spending money
  • Dependent care expenses
  • Expenses related to a disability

Because tuition and living expenses differ from college to college, the cost of attendance can vary widely. The college’s estimate of its Cost of Attendance is part of the equation that determines your amount of financial need.

Expected Family Contribution -- EFC

The other part of the equation is the Expected Family Contribution (EFC). The EFC is the amount of money a family can reasonably be expected to contribute toward the student’s college costs, which is determined by information provided on the FAFSA including:

  • Your family’s income (taxable and untaxable)
  • Assets and benefits (for example, unemployment or Social Security)
  • Family size and the number of family members who will be attending a college

Your EFC stays the same, regardless of the college selected.

Some colleges provide flexibility for special circumstances such as the family’s unusual medical expenses or unemployment. If you have unusual circumstances, be sure to discuss them with the college financial aid administrator and provide any required documentation.

  College A College B College C
COA 5,000 10,000 30,000
EFC 4,000 4,000 4,000
Financial Need 1,000 6,000 26,000


Need = COA - EFC

Financial Need then, is the difference between the Cost of Attendance and the Expected Family Contribution. Because the COA varies from college to college, the amount of financial need will also vary. Your financial need is a factor in determining how much student aid you may be offered.

The determination of financial need may be affected by other resources you may have such as private scholarships, employee tuition assistance or other high school and community awards. Your high school counselor or college financial aid administrator can give you specific details.

HESC offers financial aid advisor tools, including the College Finance Advisor and the College Financial Aid Award Comparison Tool to help determine your college costs.

Net Price

The actual or net price that you pay for college may be very different from the published, or “sticker price,” because of financial aid. Net price is determined:

Net Price = Sticker Price – Gift Aid (grants, scholarships and awards)

Before deciding which college to attend, make sure you calculate the net price. It may be that a college with a cost of attendance that appears out of your price range offers more gift aid, making the actual cost affordable.

To help you determine your cost, colleges are required to provide net price calculators and are usually found on the college admissions website.