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I am currently a senior at a high school. If I want to dorm at a
private university, which adds $10,000 more to the $40,000 tuition, do
the universities take into account the financial aid as a whole thing
with tuition and room and board, or do they just give financial aid
for the tuition? To simplify this, my total costs of one year in
college would be $50,000, so would they give me financial aid for that
money, or would they give me aid just for the tuition?
— S.S.
Financial aid is based on the full cost of college, including room and
board, not just tuition and fees. But the amount of financial aid is
reduced by a measure of your ability to pay, so you are unlikely to
get a completely free ride at any college, even if you are very
poor. Also, financial aid packages usually include loans, which have
to be repaid (with interest).
The amount of financial aid depends on financial need, which is
defined as the difference between the cost of attendance and the
expected family contribution (EFC). The EFC is a measure of ability to
pay based on the family income and assets. It is determined after the
student submits the Free Application for Federal Student Aid (FAFSA)
and other financial aid application forms. The cost of attendance
— sometimes called the student budget — includes tuition
and fees, room and board, books and supplies, transportation and
personal expenses. The cost of attendance may be adjusted on a
case-by-case basis at the discretion of the college's financial aid
administrator to include dependent care costs, disability-related
expenses and/or the cost of a computer.
Most colleges have three student budget figures, depending on whether
the student lives on campus in a dormitory, at home with his or her
parents or off campus in an apartment. If you live on campus in a
dormitory, the room and board figure will be based on the actual
charges for the dorm room and the required meal plans. If you live off
campus in an apartment or with your parents, the student budget will
include an allowance determined by the college.
Most colleges base the off-campus room and
board figures on a local rent survey, the College Board's
Living Expense Budget
or inflationary adjustments to the previous year's allowance. If your
costs are higher, most colleges will not adjust the cost of attendance
figures to compensate because student financial aid is not intended to
subsidize lifestyle choices. The main exception is when the higher
costs are due to accommodations for a disability.
Not every college awards enough financial aid to cover the full
demonstrated need of the students. Some colleges practice gapping,
where the student is left with some unmet need. This may
increase the amount that must be borrowed to pay for college. Typically,
Bachelor's degree recipients who have unmet need in
their senior year graduate with more debt than those
without any unmet need.
Even when the college meets a student's full demonstrated financial need,
the financial aid package will usually include some student loans. (The
main exception is the
six dozen elite colleges that have adopted no loans financial aid policies.
Students at these "no loans" colleges still borrow to pay for the
family's contribution to college costs, but do graduate with less
debt.) While the amount of gift aid increases with increasing college
costs, total grants typically represent only about 30 percent of the
cost of attendance, even at the more expensive colleges. Debt at
graduation correlates very strongly with the cost of attendance and
tuition, so you are more likely to graduate with excessive debt at a
college with a sticker price of $50,000 or more than at a college that
charges half as much.
The colleges you are considering are among the most expensive colleges
in the US. You should consider some less expensive colleges, such as
an in-state public college or a college located in a less expensive
area of the country. It is also a good idea to apply to a "financial
aid safety school", which is a college that will not only accept you,
but where you could afford to enroll even if you got no financial aid.
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