What is Financial Need?
As you fill out your FAFSA, you know that someone somewhere is going to apply a mystical formula to the information that you have filled out on the form, and that formula is going to determine your financial need. You may wonder why they don't just give you all the money you want. Of course, that will really not be in your best interest in the long run.
The formula is really very simple:
EFC - COA = Financial Need
EFC: Expected Family Contribution
The EFC is the amount of money that you and your parents (or guardians) are expected to contribute to your education. This is calculated based on your parents' income, assets and outstanding debts. Any assets that you have are also included in this calculation.
See below and throughout our guide for notes on the flexibility you might have in terms of reporting assets, debts and income. There is bound to be one thing you or your parents will find helpful or informative in our complete guide to the FAFSA, linked to below.
COA: Cost of Attendance
The COA is the sum of all the costs you will accrue while attending college or university. This includes your tuition (of course), room and board (or rent and food, as we usually call them), books and other supplies, as well as travel expenses to and from home.
In the end, that sounds pretty simple, but the actual figures they use to calculate it may surprise you. There are simple tips such as filing the FAFSA before the deadline, as well as some trickier tips such as how to report your gross income. You can read more about this and how you can maximize your total financial need by following more of the steps in our guide to the FAFSA.
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