The Overview of the Financial Aid System diagram to the right summarizes how a student's financial aid eligibility is assessed (need analysis) and how grants and loans are packaged. A student applying to college faces expenses for tuition, fees, books, and living expenses. Depending on where the student wants to enroll and the family s financial resources, the student may be able to receive financial aid to help cover these expenses. In awarding aid, institutions typically first package any grants for which the student is eligible and then offer loans (although some institutional grant aid may be awarded after loans are packaged). If the student has financial need after grants, at least some of the loans may be subsidized (i.e., the federal government pays the interest while the student is enrolled).
Need Analysis
A need analysis determines a student s eligibility for financial aid at a particular institution. The need analysis establishes how much a family is expected to contribute from its own income and assets and compares that to the price of attending. If the price of attending is greater than the expected family contribution, the difference between the two represents the student s financial need. If the expected family contribution is greater than the price of attending, the student is not eligible for need-based aid, but may still qualify for merit aid and can take out unsubsidized loans.
Tuition and Fees
Tuition and fees represent the price that institutions charge students before any grant aid is taken into account. Fees are charges assessed for services such as laboratory expenses, health services, exercise facilities, and art studios and may not be the same for all students. The amounts used in this analysis are the actual charges to individual students and therefore reflect whether they paid in- or out-of-state tuition.
- Average tuition and fees (after adjusting for inflation) have risen substantially.
Dependent undergraduates who attended full time in 1990 were charged an average of $1,100 in tuition and fees at public 2-year institutions, $2,900 at public 4-year institutions, and $12,000 at private not-for-profit 4-year institutions. By 2000, the averages had risen to $1,600, $4,300, and $15,900, respectively. The apparent increase at private for-profit less-than-4-year institutions (from $7,300 to $8,000) is not statistically significant.
Despite widespread concern about the affordability of postsecondary education, students have a range of options with price tags that vary widely. Although a relatively small percentage (5 percent) of full-time dependent undergraduates at all 4-year institutions faced tuition and fees of $24,000 or more in 2000, about 44 percent were charged less than $4,000. Students at public and private not-for-profit 4-year institutions faced very different prices, however: about 83 percent of students at public 4-year institutions were charged less than $6,000 in tuition and fees, while about a quarter of those at private not-for-profit institutions were charged $22,000 or more.
