Calculate costs

Calculating Costs

Due to the rising costs of college education, more than 80% of college students utilize some form of financial aid to help pay for college.  Assistance comes from a variety of sources:

• federal and state governemnts,
• public and civic organizations, and
• colleges and universities.

To qualify for financial aid, students must complete the Free Application for Federal Student Aid (FAFSA) for federal sources of financial aid and there is a possibility that there may be other applications regarding institutional or private programs.  Check with your school's financial aid office to learn which applications may be required.

A school's financial aid office generally determines the programs and amounts of aid an applicant receives.  This involves:

• determining the cost of attending the college,
• calculating a student's Expected Family Contribution (EFC), and
• awarding aid to meet the difference between the two (the calculated financial need).

College Costs

Schools will generally publish cost information in their admission materials and on Internet sites.  Along with the costs that the school directly bills the student such as tuition, fees, room and board, the college also determines standards for other items like books and supplies, transportation, and other personal expenses.  Together all of these items make up a student's Cost of Attendance (COA).

EFC

According to federally legislated calculations, submitting the FAFSA allows the determination of an Expected Family Contribution.  This is the amount calculated by the federal government (based on the student's and/or parent's income, number of family members, number of college students, etc.) that the family is expected to be able to pay towards educational expenses over a year's enrollment.

The EFC also serves a secondary purpose.  Some aid programs use the EFC as an "eligibility index" --- that is, if the student's EFC falls in a certain range he/she is eligible for a particular aid program/award amount.  The Federal Pell Grant, for example, is awarded on such a basis.

Institutional EFC

Some colleges additionally caculate a second EFC.  This "Institutional Methodology (IM)" EFC often takes additional factors (such as home ownership) into consideration.  This IM EFC is then used to allocate awards of institutionally sponsored aid programs.

Financial Need

The financial aid office will typically subtract the EFC amount from the cost to derive at the amount of financial aid the student "needs" to afford that school.

Sample Student Expense Budget

To help calculate the cost of college, we recommend you visit  FinAid. This provides access to a College Cost Projector; Expected Family Contribution and Financial Aid Calculator; Loan Calculator; and Savings Plan Designer.

Also, investment firm T. Rowe Price has a fairly accurate online college-cost calculator that lets you estimate the costs of a degree at hundreds of school around the nation.  To find it, click here,  click on the "Individual Investors" tab, then select "Products & Services" and "College Savings".  The calculator also estimates how much you'd need to save monthly to end up with enough to pay for college in full in cash.