Institutions granting financial aid (universities and the federal government) assume that the family (parents and student) is the first source of support for the student, and that the family will contribute to the student's education to the extent that they are able.

Need-based aid is awarded to families based on the amount of money the colleges and government believe that a family can pay. Need-based aid is explained in more detail in the section on Determining a Family's Need.

Merit-based awards are generally quite competitive, and not all schools offer them.  They offer a student a financial award for a special talent or for academic strength or strong test scores. Not all schools offer merit awards.  Merit awards may include:

• academic scholarships (often called Dean's Awards or Presidential or Trustee Scholarships);
• recognition for special talent in art, music or drama (often, a student must be nominated or perform an audition or present a portfolio to be considered);
• athletic scholarships (Division I and II schools only);
• Community service or leadership awards. 

Estimated Family Contribution (EFC)
Obviously, the amount that a family can contribute will vary greatly (from $0 to the total cost) and will be determined individually. Need is determined by subtracting the estimated family contribution (“EFC”) from the full budget cost of attendance at a given school. Hence, your ‘need' may differ from school to school.

Cost of attendance (“price tag”)  -  Estimated Family Contribution = Need

Ability to pay (what your family is able to contribute) is determined by the information provided on the FAFSA (Free Application for Federal Student Aid, required at all colleges) and the College Scholarship Service (CSS) PROFILE (required at some colleges.) In addition, some colleges will have their own special Financial Assistance form. It is your responsibility to check with each school to know which forms they require.

Financial aid comes to a student in the form of a “package” from each Financial Aid office, and may include both gift aid, which does not have to be paid back (i.e., grant or scholarship from the federal government, the state, or the school), and self help, which includes loan and Work Study. Packages may vary from school to school, depending on each school’s philosophy and institutional funds.  Most schools are not able to fund every admitted student who demonstrates need.

Need-blind admission means that the admissions office does not consider a family’s “ability to pay” in the application process.  Some schools make “need-conscious” or “need-aware” admission decisions, meaning that they may take into account a student’s financial means (or even the fact that a student is an applicant for financial aid.)

International Student Aid is limited, as non-U.S. citizens do not qualify for money from the U.S. Federal Government, and do not file a FAFSA.  A few institutions do have financial assistance (need-based or merit-based) for international students, and may ask the students to file a financial aid form to determine eligibility.  Students who are permanent residents (“Green Card Holders”) DO qualify for need-based aid.

Borrowing may come in several forms: parent loans or student loans; loans through a college or private loans.  Most college students will borrow, at a minimum, the following amounts in Federal Stafford Loans (federally guaranteed loans) during the course of their undergraduate education:
First Year=$3,500

Second Year =$4,500

Third Year =$5,500

Fourth Year =$5,500

TOTAL=$19,000

If you borrow this amount, your average monthly repayment after graduation will be somewhat more than $200 per month.

If you attend graduate school, you may borrow up to an additional $18,500 per year.

Although this may seem an enormous amount of debt, it is an investment in yourself – and the most valuable one you'll make!  Consider this: Most people borrow this much to buy a car – and the car will last only a few years.