Talking Brass Tacks on Financial Aid: Institutional Aid

The federal government doesn’t expect you to finance a college education on Pell Grants and loans alone, and neither do most four year institutions. Colleges have money set aside to give to students as a way to offset the cost of their education, and this money comes in two forms: merit aid scholarships and need-based grants. Merit aid scholarships are scholarships awarded to the top percent of students within the applicant pool of any given year. These scholarships can range in amount according to how competitive an applicant is within the applicant pool. For instance, the most competitive applicants can be awarded full tuition scholarships and less competitive applicants might receive smaller tuition awards. Larger scholarships tend to look at the applicant as a whole, including community service and personal attributes, while smaller awards may only take a few factors into account, such as standardized test scores and unweighted GPA.

Need-based grants are awarded automatically based on need and are not competitive. Because they are given automatically to needy applicants, these grants are usually exclusive to smaller, well-endowed, private institutions and not prevalent at larger public colleges. For most needy families, this can significantly decrease the cost of a private education, especially if the school meets one-hundred percent of financial need. Schools that meet one-hundred percent of a family’s need fund the student’s education completely, excluding the family’s estimated family contribution (EFC). This EFC is calculated by the institution, and the institution’s aid formula would look like this “Cost of Attendance – Grants = EFC.” Not all institutions meet one-hundred percent of a family’s need, and not all institutions use the same formula to calculate an EFC, so it is always best to fill out a net price calculator specific to that institution.

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