Will You Get Enough Financial Aid? Ask Your College About These 10 Factors

Fewer than 3 percent of all the colleges in the country promise that they will award enough financial aid to meet the full financial needs of admitted students in 2010.

[See which schools claim to meet full need.]

And even among the small group of comparatively wealthy and generous schools, there are big variations in whose need, and the size of the need, they offer to meet. Most colleges in this group are guaranteeing to meet the needs of only those students who are U.S. citizens and who apply for financial aid before the school's deadline. That means that in some cases, foreign, tardy, and wait-listed students aren't guaranteed full aid packages.

To determine "need," most of these schools require parents to fill out the Free Application for Federal Student Aid and the College Board's CSS/Financial Aid Profile. The profile, which is free for low-income applicants but costs all others at least $25, asks in-depth questions about things like investments and real estate equity. The schools use the financial information to calculate an expected family contribution. Many schools have developed their own formulas for deciding how much of a family's home equity, say, should be counted on as a resource to help pay for college. A student's "need" for financial aid is calculated by subtracting the EFC from college's total cost of attendance—including room, board, books, travel, and miscellaneous expenses.

Colleges also use different mixes of scholarships, loans, and work-study jobs to meet what they believe to be the students' need. Some colleges give enough grants to allow students to avoid borrowing altogether, for example. But the downturn in the economy has forced a growing number of even the wealthiest schools to increase amount of loans they plan to ask needy students to take.

[Read Coming in 2011: Bigger Tuition Bills, Loans.]

Because many parents find the college's estimate of their need and EFCs to be unaffordable, some students concerned about the cost of college may find it cheaper to attend schools that are not on the meet-full-needs list but have lower sticker prices. Alternatively, students can also search out colleges that award more merit aid, in the hopes of getting enough grants to reduce their total net cost of college.

Students and parents looking to choose a college likely to award them sufficient grants can ask the college's financial aid office about 10 major factors that help determine just how big their financial aid offer will probably be:

1. The college's policy on student loans: Several schools, including Amherst College in Massachusetts and Pomona College in Claremont, Calif., provide enough grants and work-study jobs to meet a student's need. Others, such as Oberlin College in Ohio and Wesleyan University in Middletown, Conn., say they will provide enough grants so that low-income students don't have to borrow, while others will be expected to take out modest loans. Still others offer aid packages that include federal student loans of up to $7,500 a year.

2. The way the college calculates a family's "need": Harvard University, for example, promises to provide enough grants to make sure families earning less than $180,000 pay no more than 10 percent of their income. Other schools on this list promise enough aid so that the family generally only has to come up with an expected family contribution that the school calculates based on the family's income and assets.

3. What the college considers as its "cost": Legally, a college's total cost of attendance is supposed to include tuition, fees, room, board, books, travel, and reasonable miscellaneous expenses for laundry and other necessities. Some schools keep their "cost" low by providing comparatively small allowances for books or miscellaneous expenses. The College Board surveys colleges every year and estimates that books and supplies cost about $1,100 last year. The typical "miscellaneous" expense budget ranged from $1,400 to $2,000.

4. The college's expectation for a student contribution: Many of the schools on this list reduce the student's need, and thus the aid package, by at least $1,000 (and some by much more), saying that the student is expected to contribute that much each year from summer earnings. A few schools, such as SUNY's College of Environmental Science and Forestry in Syracuse, N.Y., provide enough aid so that students aren't required to pitch in summer earnings.

5. How the college counts home equity: Some colleges, such as Yale University and Occidental College in Los Angeles, do sometimes consider the equity parents have in their homes as a resource that should be tapped to help pay for college. Others, such as Brown University and Harvard, don't consider home equity at all.

6. How the college considers divorced parents: Some schools, such as Yale, analyze the incomes of both stepparents and original parents and make their own judgments about which set of parents should be responsible for each student's college costs. Others, such as Boston College, consider the incomes of only the original parents. Colleges that only use the Free Application for Federal Student Aid consider only the custodial parents' income, even if a stepparent has a prenuptial agreement relieving the stepparent of financial responsibility for the child.

7. The cutoff date for the meet-full-needs promise: Reed College in Portland, Ore., and SUNY ESF try to meet the needs of only those students who complete their aid applications on time. Other schools, such as Adrian College in Michigan, commit to meet the need of only those students admitted during the early or regular admission seasons and may run out of aid by the time they start admitting students off of the wait list. Still others, such as Princeton University, Northwestern University in Evanston, Ill., and St. Olaf College in Northfield, Minn., say the timing of the application doesn't affect the aid award.

8. The aid policy for international students: A few schools on this list, such as Princeton and Grinnell College in Iowa, commit to meet the financial needs of noncitizens. Many others, such as Northwestern and Adrian, don't guarantee full aid for international students.

9. Whether the school also offers merit scholarships: Some schools on this list, such as Rice University in Houston and Washington University in St. Louis, offer top students scholarships no matter how rich their parents or what their EFC is. Others, such as Columbia University, do not offer merit scholarships.

10. The effect of an aid application on chances for admission: At least 28 colleges have committed to ignore a student's aid application when deciding about admission. But some others on the list do reserve at least some seats for students who can pay full price. Reed says it meets the full need of all admitted students and doesn't consider ability to pay for more than 90 percent of its admission decisions. But the last dozen or so fat envelops go to students who don't need financial aid.

Searching for a college? Get our complete rankings of America's Best Colleges.