Financial Aid Eligibility

Financial Aid Eligibility is determined by a simple formula: Total Cost of Attendance less Exected Family Conribution equals Financial Need.

Loans based on cost such as the Unsubsidized Stafford, Grad PLUS, and private loans, can help meet any shortfall in financial need and may be borrowed (in combination with other aid) up to your entire COA; in effect, you can “borrow” your EFC. Your EFC is the result of information you supplied on the FAFSA.

When considering how much financial aid you need and how much to apply for, there are three questions you should ask before proceeding:

1. How much does it cost? (Cost of Attendance)
2. How much do I have? (Expected Family Contribution or Student Contribution)
3. How much more do I need? (Financial Need)

To really understand how your eligibility is determined, you will need to break down each of these questions and become familiar with the terms.

Cost of Attendance (COA) is also often referred to as the “Student Financial Aid Budget” or “Student Budget.” It consists of three parts:

• Tuition and fees
• Books, supplies, and equipment
• Living expenses

You will need to find out your school’s COA for the school year (or for the period of time for which you are applying for financial aid). The COA represents the outer limit as to how much financial aid you can receive in any given year—in other words, your total financial aid from all sources cannot exceed your total COA.

Of the three parts referenced above, you have little control over the tuition and fees you will be charged by your school, and also perhaps little control over the cost of any books, supplies, and equipment you may need.

However, you do have some control over your living expenses. The living expenses component of a student’s COA is often financed with unsubsidized loans (Unsubsidized Stafford, Grad PLUS, private loans) which accrue interest from disbursement. Reducing your living expenses is a great way to help reduce your total borrowing and subsequent repayment.

Expected Family Contribution (EFC) represents an amount resulting from the information you provided on the FAFSA—based on a formula approved by Congress, this is theoretically what you can “contribute” toward your COA during the time for which you are applying for financial aid. All graduate students are considered “Independent” for purposes of federal financial aid, so this figure is often also referred to as the “Student Contribution.” (Married students will need to include spouse information when completing the FAFSA.)

When a school’s Financial Aid Office determines eligibility for need-based grants and scholarships, they may use a higher EFC than that reported to you from the FAFSA they are. Ask your school if they use a different formula for determining your eligibility for institutional aid—they may even have a separate application for you to complete.

In the event your EFC is higher than you think it should be (especially if you worked full time during the previous year and will either not be working during school or will be working during school but only part time), you may want to talk with your school as to how—or if—this affects your eligibility for financial aid. The reality is that for many graduate students, including graduate business students, the only need-based aid that is available to them and for which they qualify is the US$8,500 Subsidized Stafford Loan. Even if your EFC is higher than you think it should be, if you are eligible for the full $8,500 Subsidized Stafford, the remainder of any aid you get (such as the Unsubsidized Stafford, Grad PLUS, or private loans) would be based on your total COA and not your EFC.

Financial Need is simply your total COA minus your EFC, and represents how much you are eligible for in “need-based” financial aid, such as the Subsidized Stafford Loan.

Here’s an example:

(Total COA: $50,000) - (EFC: $10,000) = (Financial Need: $40,000)

In this case, the student is eligible for $40,000 in need-based aid—he or she might only be awarded the $8,500 Subsidized Stafford in need-based aid, depending on other need-based funds available through the school.

If you receive any stipends from your school (perhaps through a Teaching Assistant Grant), those funds may be taxable and do not count against your Financial Need “dollar for dollar.” They may be counted, however, as part of your EFC since they are considered income. Contact your Financial Aid Office if you have questions.