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The mission of Broadview Financial Well-Being is to guide and encourage individuals to focus on achieving economic stability - using innovative tools, making informed decisions, and encouraging positive habits.

The mission of Broadview Financial Well-Being is to guide and encourage individuals to focus on achieving economic stability - using innovative tools, making informed decisions, and encouraging positive habits.

The mission of Broadview Financial Well-Being is to guide and encourage individuals to focus on achieving economic stability - using innovative tools, making informed decisions, and encouraging positive habits.

Understanding Financial Need

In this topic, we cover:

  • The concepts of Student Aid Index and Cost of Attendance.
  • Why your official need remains the same regardless of the cost of your school.


 

Many financial aid programs are based on financial need, but what exactly is "financial need"? Many students and families assume they don't have financial need since they live a comfortable lifestyle. In fact, the amount of need depends on many factors, including not only income but also the cost of each school and the number of people in your immediate family who are enrolled in college at one time.

Financial need is determined by formulas that take into account student income, parental income for financially dependent students, savings, and the cost of attending a particular school. But at its simplest level:

Financial Need = your Cost of Attendance - your Student Aid Index

The cost of attendance will vary by school, but your Student Aid Index (how much your family is expected to contribute to college costs) doesn't change. So, using round numbers with a family whose Student Aid Index is $12,000:

Public 2-Year Public 4-Year Private 4-Year
Cost $12,000 $20,000 $40,000
SAI $12,000 $12,000 $12,000
Need $0 $8,000 $28,000

If the student chose to attend the public two-year school, he or she would not qualify for any need-based aid since the amount the family should be able to contribute equals the cost. On the other hand, if the student chose one of the four-year schools, he or she would qualify for a great deal of aid.

On the surface, it really is that simple. Of course, the reality is that coming up with the funds to meet the need is complex.

First, let's talk about cost and the Student Aid Index.

The first part of the formula, cost of attendance, includes all the expenses involved in attending a particular school. These expenses include tuition, room and board, student fees, textbooks, supplies, transportation and other costs, which vary per school. Each school prepares a budget that takes into account all those costs, including many others. Essentially, the budget is what an average student would spend for the year while living frugally. For those living on campus, the budget includes the actual cost of the dorm and food plan. For those living off campus, there is an allowance for rent and utilities. And when schools consider transportation, they may include not only the cost to get to and from classes, but also two or three trips home per year.

In addition to the required costs (tuition, fees, books, etc.) there are those miscellaneous things students spend money on, including lab fees and art supplies. Schools really do know what it costs most students and they know that unless they use realistic budgets, students won't be able to make it through the year.

The second part of the formula, Student Aid Index, is the amount your family is expected to contribute to the cost of college. The dollar amount of the Student Aid Index is determined by a formula derived by Congress that takes into account your family income, savings, other assets, the size of your household, and other factors. The Student Aid Index is calculated through information gathered on the federal financial aid application.


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Student Loan Repayment

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Have a question?

Broadview Financial Well-Being
1-800-727-3328 x 1314066
financialwellbeing@BroadviewFCU.com

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