What Is Financial Need?

By: Gen Tanabe

Co-founder of SuperCollege.com and co-author of "Get Into Any College" and "Get Free Cash For College."

The term financial need is simply the amount of money you will need to finance your college education. How do you figure this out?

First you need your "Expected Family Contribution" or EFC. This is the amount you and your parents can reasonably contribute to your education. The government or colleges will look at your parent's salaries, savings, assets, and debts to determine how much they can afford to pay. Your assets (i.e., earnings from your summer job) will also be figured into this equation. From this number will be subtracted the "Cost of Attendance" or COA. This is simply the estimated annual cost of the college including tuition, room and board, books and supplies, and travel expenses from your home to school.

So we get something that look like this:

Cost of Attendance (COA)
(minus) Expected Family Contribution (EFC)
(equals) = Financial Need
Financial need expresses the amount of money you will need to go to school.

So all the forms that you will fill out will basically be used to determine how much money your family has and how much they can "reasonably" afford to put toward your education. Of course, what is considered "reasonable" by the government or college may not seem so to your family!