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.


Audra Clodfelter, Communication/Scholarship Administrator

Southeastern Illinois Community Foundation, Effingham, Illinois



  • 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!

  • 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.

  • 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?

  • 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.

  • 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!

  • 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

  • TomWickershamTomWickersham
    Rule Breaker 100 Likes Scholarship Lifecycle Manager (SLM) First Anniversary
    edited January 2021

    @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!

  • @TomWickersham This is a very good point. This part of the process is why my brain hurts!

  • 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

  • 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.

  • @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.

  • @AudraClodfelter I found this informative article

    I think the short answer questions can be very informative. Keep me in the loop if you hear about any trainings!

  • @SeleneLopez Thanks! That really breaks down the changes!!

  • 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.

  • edited March 2021

    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!

  • @DeirdreMcLoughlin

    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

  • DeirdreMcLoughlinDeirdreMcLoughlin
    World Traveler U.S.A. Scholarship Lifecycle Manager (SLM) 25 Likes
    edited May 2021

    Michelle your idea of such a late deadline is wonderful. Any one else doing the processing so late?

  • 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?

  • 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.

    Tracy Larimer | Foundant| Bozeman, MT | she / her / hers |

Sign In or Register to comment.