Typically the family.  The family’s contribution, “need-based” aid, and any assistance unrelated to demonstrated financial need (non-need or merit-based aid) are the principal sources available to families to meet college costs.  Need-based, non-need and merit-based aid can come from the Federal and/or state governments, colleges and universities or independent sources such as private agencies.  The primary source of money for college still comes from the family contribution.

The federal calculation that determines how much your family will be asked to contribute is reviewed yearly.  The Free Application for Federal Student Aid (FAFSA) and other forms collect income, assets and other family information which is applied to this calculation to produce a family contribution that is expected to be used to help pay for the cost of the student’s education.  This contribution is called the Student Aid Index (SAI).  Other financial assistance, such as scholarships, grants or other forms of aid awarded to the student will be included later by the school in a financial aid offer.

Financial aid offers are keys that can help you unlock how you’ll pay for school, including how much you’ll have to pay on your own.  To be considered for financial aid, the student (and parent/guardian) must first complete the FAFSA, and possibly the College Scholarship Services Profile (CSS Profile) as a separate application through the College Board. 

About 2-3 weeks after submitting the online FAFSA application (or 4-6 weeks if you completed the paper FAFSA), you will receive your FAFSA Submission Summary. The FAFSA Submission Summary provides the information you provided on the FAFSA, and indicates the Student Aid Index (SAI).  Completing the FAFSA is VERY important as many scholarships will require a copy of your FAFSA Submission Summary to confirm personal demographic information.

The SAI is the amount of money your family will be expected to contribute to your education. While the SAI will not change substantially from school to school, the family’s “need” will.   Each family’s financial need will be determined by the college Financial Aid Office by subtracting your SAI from the total cost of education determined by the school you plan to attend.  Your SAI (determined by the FAFSA or CSS Profile) is subtracted from your Cost of Attendance (COA), also known as the “student budget” includes tuition, room, board, fees, travel.  For example, Financial Need = COA – SAI. 

The lower your SAI, the more financial aid you will get. The school will try to meet this need through a financial aid “package” that combines aid from federal, state, school, and private sources with loans and student employment.  If a school bills itself as meeting full-need, then it is committed to fulfilling all of a family’s financial needs through a combination of grant, loan, and work study.  Other schools, due to limited resources, must “gap” students, meaning that while they realize a family may have a certain amount of need, they are only able to offer a portion of that need.  In such situations it is important to determine what a truly reasonable expenditure for the family is, and if necessary consider another school with a more balanced financial aid package. 

A student may decline or accept any part of an offered financial package, which allows parents the opportunity to seek out other loans if they prefer.  Schools may adjust aid packages as the student earns outside scholarships.

The term “Sticker Price” includes everything from tuition to (limited) transportation; however, the final price may be substantially lower than the sticker price if you have received grant-based aid, if you are eligible for need-based aid according to the FAFSA and if you have received other forms of merit-based aid for academic, athletic or other achievements.  Know the stronger the financial health of a school, the more likely they are to provide a final price lower than the sticker price.  In many cases, private mainland schools will provide greater financial aid packages than a local public school.

Families are encouraged to have honest and open discussions about their financial situation with realistic understandings about affordability early in the application process.  To avoid being misled, both students and parents/guardians need to be upfront early on.  Just remember not to limit selection of schools because of sticker price as the final price may decrease depending upon your unique circumstances.

Schools have different names for these offers: financial aid offer, merit letter, award letter, or financial aid package. Many schools send offers electronically, and may include them with acceptance letter packages. Plus, there’s no standard format, so they can look different from one another. This can make comparing them a little difficult.  Financial aid offers usually contain this information:

• Cost of Attendance (COA), an estimate of what you can expect to pay for one year of school. This includes tuition and fees, room and board, books and supplies, transportation, and even personal expenses. If the COA isn’t included in your offer, check the school’s website or call the financial aid office.

• Student Aid Index (SAI), a number that your school uses to determine how much financial aid you’re eligible for. It’s not (despite its name) how much your family will have to pay for college.  

• College grants are typically need-based and can be given by state or federal governments that do not have to be repaid.

• College scholarships can be need-, merit-, or interest-based and are awarded by a school, company, or private organization.

• Federal work-study is a program, implemented by the school, where monies earned by students through on-campus jobs, usually arranged by the school.

• Federal student loans let you borrow money directly from the federal government; you pay this financial aid back with interest. A financial aid offer may also list the amount you can borrow with a credit-based loan (like a federal Direct PLUS Loan or a private student loan).