Scholarships -- Determining Financial Need
Hey everyone!
I am building our application with Foundant and using this as an opportunity to re-think some of the questions on our application. Several of our scholarships are based on financial need. Currently, I ask students to list their estimated college expenses, scholarships they have for the upcoming year, and estimated PELL grant. I also ask for the EFC. I have used the calculation of Cost - (Scholarships + Pell +EFC) = Need
So... 25,000 - (1000 + 5000 + 250) = remaining need
When I worked for the Illinois Student Assistance Commission, we explained that financial aid covered the gap between the cost of attendance and what the student could pay (EFC). But I also know, the EFC isn't always reflective of a family's situation.
With all of that in mind, I don't know if I am taking the right perspective on determining financial need and I would appreciate any feedback/discussion regarding this process.
Thanks,
Audra Clodfelter, Communication/Scholarship Administrator
Southeastern Illinois Community Foundation, Effingham, Illinois
Comments
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Hi @AudraClodfelter,
In addition to the standard financial need questions (EFC, other scholarships/grants), we ask this open-ended question of all applicants: Are there any extenuating financial circumstances you would like to share with the committee?
We do not make this a required question, but it is helpful for those students who have financial need, especially if their family's financial situation has recently changed.
Hope this is helpful! Would love to hear how others have approached this topic.
Laurie Abildso
Vice President
Your Community Foundation of North Central West Virginia, Inc.
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I wish I could help, but I'm afraid our approach is too simple. We ask for EFC and also ask for extenuating circumstances. We have found that the list of scholarships earned to date is random/incomplete information. Like, Laurie, I would certainly be interested in learning about other methods.
Best of luck to you!
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We ask for FAFSA (EFC), extenuating circumstances and the parent's AGI - then we rank this information and we get a number #1-5 which becomes their ranking number. we do keep an eye out on any thing that might be relevant to the extenuating circumstances which sometimes come up in an essay.
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We ask for the EFC score and provide an optional question to provide any extenuating circumstances.
I was reading about the bill that just passed where they have simplified the FAFSA, which is wonderful news, but I saw that they are also transitioning from the "Expected Family Contribution" (EFC) to "Student Aid Index" (SAI) to better communicate to students the role of the FAFSA calculation on their aid eligibility. I am wondering the impact this could/should have on scholarship applications for 2021 and if we should now be asking for the SAI instead of the EFC? I know this is very new information, but wondered if anyone here may have any insight?
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we do a combination of all of the above. We do also ask for a copy of their College Financial Aid Award Letter, so we can also see if they are receiving other awards beyond ours. I am attaching a rubric that we also use for our Financial Need Selection Committee. If a students need has been met we do not forward their applications on to this committee. I am looking forward to seeing what others are doing as well.
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Following. We use wildly variable methods to assess, depending on the scholarship, so I am very interested in this discussion. Thank you in advance to everyone's insight and sharing your methodologies.
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Hi Audra! Thanks for posing this question. I'm a Solutions Engineer for Foundant but prior to joining the team I spent many years as a scholarship administrator of an SLM site for a Community Foundation, and I struggled with this same thing. I never understood how the EFC was calculated, because it seemed a family's AGI could be $60,000, they could have 2 kids in college, and somehow their EFC is $15,000. (Totally made up numbers here, but you get my point.)
We had many committees completely eliminate the EFC in their "financial need" assessment. We would often take the estimated cost of attendance (depending on what all you want to include in that, tuition, fees, books) and subtracted out any scholarships and grants to come up with the official need. (So perhaps a $25,000 school, minus a $5,000 scholarship and a $5,000 pell grant, leaves a need gap of $15,000.) We would look at that need compared to the family's AGI in some cases (perhaps a family with a $300,000 AGI could potentially contribute more than a family with a $60,000 AGI) but largely ignored the EFC. At the end of the day we realize college is expensive, and most kids, at least in the area we served, could demonstrate "need".
I had some committees that drew a hard line in the sand and set a limit with the AGI... any student with a family AGI over $xyz will not be considered. I also had some committees who wanted to know extenuating circumstances... recently divorced single mother, 2 siblings also in college, recent loss of job, etc.
All this to say, I never successfully formulated that perfect equation to accurately capture need, so I do think it's important to ask detailed questions about the bigger picture. Looking forward to others' responses as I know this is something that is often discussed at conferences and other experience-share opportunities!
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To determine financial need - we take into account four different factors and we rank then, total and come up with a number between 1 and 5 - 5 has great financial need and 1 has little or no financial need. The financial need is ranked by staff and the committee reviewers will only see a single number as the financial ranking.
We use: AGI, EFC, Family Members attending College, and Special Circumstances. We are confident generally in our rating.
Deirdre McLoughlin
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I'm re-thinking the way we've been calculating need.
Initially, I thought I had to factor in EFC, and I think it's still important but not the main thing.
Colleges/Unis use EFC in their calculations to determine the gap between federal/state aid and what the family can afford to pay. They fill the gap with institutional aid.
I'm planning to ask for EFC and it will be something to consider but in a different context.
I want to look at COA - Gift Aid (PELL, MAP, scholarships, etc.) to determine financial need. The school will have tried to fill the gap between F/S aid and EFC, and I look at our scholarships as a way to lower the EFC. So someone with a low EFC may have less need than someone with a higher EFC. But, of course, if the family has a high AGI and a high EFC, they may have less of a need.
My brain is starting to hurt from all of this mapping.
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@AudraClodfelter I think you're on to something!
Unfortunately for us, and others I suspect, we have to rely on EFC because we are making decisions so early in the year (March/April) and because students have submitted applications long before they've decided what school to attend. So, we don't have COA or financial aid package information to consider.
Please be sure to rest that brain of yours. It's a Friday!
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@TomWickersham This is a very good point. This part of the process is why my brain hurts!
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We also have a formula for those scholarship unique to each student's circumstance. For those, we do wait until we get their financial aid award letter.
Cost of attendance minus (EFC + Grants + Scholarships + Loans) = Actual need.
Good luck
Deirdre McLoughlin
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Hi everyone. This is an area where we have always struggled, specially now with COVID and everyone has financial need.
I'd love to open up a conversation about what the elimination of EFC would mean to the financial need evaluation process. Ultimately, we want to know how much money is coming in to the household and how much money goes out. Because we know that a lot of adult students continue to struggle to stay afloat even before the pandemic.
Hope to keep the conversation going as we find solutions to fairly serve students.
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@SeleneLopez I'm anxious to learn more about the new need indicator (I think it's called the student aid index), and it's impact on financial aid and scholarships. Hopefully we'll see some training on it in the next few months.
I have two financial aid short answer questions in which I ask how students and their parents have financially prepared for college, and if there are any special circumstances the committee should consider when evaluating their financial need. This gives the student the opportunity to explain any situation that has arisen that isn't reflected on the FAFSA or income information.
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@AudraClodfelter I found this informative article https://www.kiplinger.com/personal-finance/credit-debt/loans/student-loans/602186/fafsa-application-changes-are-coming
I think the short answer questions can be very informative. Keep me in the loop if you hear about any trainings!
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@SeleneLopez Thanks! That really breaks down the changes!!
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I appreciate that I am not the only one that struggles with this! While I do feel that with the cost of attendance so high, most of the students in our region would qualify as having a financial need, it does always feel like we're struggling to find the right students while keeping the burden of the application as low as possible. Have the folks that use AGI run into problems with students not understanding what information is being requested? For some students even explaining the EFC is hard so I worry that adding in the AGI might be a deterrent to some students. We have a fairly substantial number of DACA students and children of immigrants who often don't have much help from their families in navigating the college/scholarship application process.
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We may be blessed with wonderful counselors in our areas but the AGI has not been an issue. You are correct that is easier to obtain rather than explaining what the EFC number means. We also have a fair number of DACA students.
Actually I do have an issue with the AGI. I have a generous scholarship fund for an economically deprived area and we have had for many years a cap on AGI of $90k (excepting special circumstances). We live in a very expensive area and $90k is actually not a lot of money for a family's AGI. We have been thinking of increasing it. Anyone have thoughts on this matter?
Thank you
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Our Foundation's deadline is July 15th so we are able to have students upload their financial aid award letter and they enter the EFC. Which is usually verified by the college/university's award letter. We also allow applicants, who wish not to do the FAFSA to enter 99999 in the EFC question. That way they can still qualify for academic scholarships but not financial need scholarships.
I believe the new FAFSA guidelines are starting in 2023-2024 academic year. Read an article on it and should be less questions but also taking away the sibling discount. Also, a lot can change between now and then. Should be interesting!
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that is an interesting formula - that you add loans into the equation to determine actual need.
I look at our scholarships a a means to reduce what a student/family may need to take out in loans (which is often the case for how the EFC gets paid. I don't know too many families (at least in our area) that pay the difference in cash or payments. Most are taking out a combination of student and parent loans.
I know that our scholarships are small (typically about $1,000) but we hope that every little bit helps in reducing loans which take years to pay off.
My daughter graduated in 2006 and she and I are both still paying off loans from her schooling - and she went tuition free as part of a tuition exchange program so she only had to pay for fees, room and board etc. My son who graduated in 2007 was not as lucky on the tuition part so we are both still paying on those loans, too. Kind of scary.
I find the whole figuring out financial need thing very difficult.
I like @JoannFarnham 's rubric.
Bettie Stammerjohn
Executive Director
Community Foundation of Greene County, Pennsylvania
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Michelle your idea of such a late deadline is wonderful. Any one else doing the processing so late?
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All of these responses have been so helpful as our scholarship reviewers struggle with assessing financial need each year. We have the applicant enter their AGI and EFC along with a short answer question around their financial situation and how they are contributing to their higher education costs. We also ask them to attach the Student Aid Report (SAR) so we can verify numbers in the chance there is an issue. Over the last two years, more of those reports have said "transferred from the IRS" instead of having the numbers on the report. When there is an issue or question, it is a lot harder for us to resolve. Does anyone else require this report or have other solutions?
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An update of this discussion for the 2021-2022 scholarship year!
There is a great article on changes to #FAFSA found at the link below. It requires a (free) login, but once you subscribe you might find it an an interesting newsletter to follow if you are working with #scholarships. https://www.chronicle.com/article/u-s-education-department-will-relax-aid-verification-rules-in-2021-22
Tracy Larimer | Foundant| Bozeman, MT | she / her / hers |
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#financial need
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So the new improved FAFSA opens on 12/31/23 as the ball drops!
As discussed in theis forum, it would appear the majority of us do use the EFC now SAI number as one of the metrics to rank financial need. We used a scale of 1-5 with EFC 0 of zero ranked as 5 and any EFC over $12500 and above achieved a rank of 1 point (see below). The scalability for SAI with negative numbers seems to be more complicated - has anyone come up with a system for ranking the SAI numbers? Thanks for your assistance
EFC
5 points = $0 - $2,000
4 points = $2,001 - $4,300
3 points = $4,301 - $7,900
2 points = $7,901 - $12,500
1 point = $12,501 +
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Our board has tasked us with recommending a new process for deterring financial need now that EFC is turning into SAI. Thanks, @DeirdreMcLoughlin, for sharing your 1-5 scale above. I'd love to hear from others as you re-work your processes for your needs-based awards.
Best,
Randy
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@RandyMacon and all
Like all of us, being doing a lot of research and thinking.
Our former need ranking was
Using this SAI Chart:
created the following ranking:
I'd love to hear feedback on how I analyzed this and broke down the categories.
You'll see on the linked website the SAI is color coded:
I tried to create my categories capturing the color coding which categorizes need based aid.
Of course, my 1-4 scales can be separated further to create a 1-5 or 1-7 scale for instance.
#financial need #SAI #EFC
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This is the ranking system we will use for EFC/SAI, we also have a special circumstance of 1-3, and for more than one sibling in college at the same time 1-2 and we total all
SAI SCALE DECEMBER 2023
5 -1,500 to 3,750
4 3751 to 11250
3 11251 to 18750
2 18751 to 26250
1 26251 upwards
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Hi everyone,
I'm revisiting this thread and wondering if others have developed SAI scales since we all first started following this subject. Our scholarship deadline is March 1st and we've done a lot to accommodate the FASFA delays and timelines. We've made most of the financial need information optional, but it's still a scoring component for some review. I would appreciate any information anyone is willing to share.
Thanks!
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I don't think you're going to be able to count on the SAI if you want the information for all students. For our two college girls, we received one SAI and never received the other, and now the report rescinded the number we had and we have none. I don't anticipate seeing either of them before Friday.
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