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What is Demonstrated Financial Need?
By
Kayla Korzekwinski
Kayla Korzekwinski is a Scholarships360 content writer. She earned her BA from the University of North Carolina at Chapel Hill, where she studied Advertising/PR, Rhetorical Communication, and Anthropology. Kayla has worked on communications for non-profits and student organizations. She loves to write and come up with new ways to express ideas.
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Cait Williams is a Content Writer at Scholarships360. Cait recently graduated from Ohio University with a degree in Journalism and Strategic Communications. During her time at OU, was active in the outdoor recreation community.
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Annie has spent the past 18+ years educating students about college admissions opportunities and coaching them through building a financial aid package. She has worked in college access and college admissions for the Tennessee Higher Education Commission/Tennessee Student Assistance Corporation, Middle Tennessee State University, and Austin Peay State University.
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Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.
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Many forms of financial aid require a student to demonstrate financial need. Finding out about demonstrated financial need is one way that schools determine how much financial aid a student is eligible for. Continue reading to learn more about demonstrated financial need, how it’s calculated, and how it’s used!
Related: Definition of need-based financial aid
Definition of demonstrated financial need
Simply put, demonstrated financial need is the difference between a school’s cost of attendance (COA) and the student’s Student Aid Index number. A student demonstrates financial need if their EFC does not equal the COA. You can also use the equation below to visualize how these three things relate.
| Cost of attendance – student aid index = demonstrated financial need |
Demonstrated financial need is not a static number–it can change from year to year. Typically, a school’s COA will increase annually, raising a student’s demonstrated financial need. Additionally, the demonstrated financial need will change as a family’s income and assets change. These factors are what help determine the SAI.
A student’s demonstrated financial need shows that they have a valid need for financial assistance. However, your demonstrated financial need is not a guarantee of how much aid you will receive. It’s the job of the financial aid office to compare your EFC to their institution’s COA and apply any grants, scholarships, and student loans to try and meet the student’s financial need.
Calculation of demonstrated need
To determine your demonstrated financial need, subtract your EFC from the school’s COA. A student’s demonstrated financial need will vary from school to school, because some schools have a higher COA than others.
You can use the example equation below to see how you can calculate your need.
| $20,000 (COA) – $8,000 (SAI) = $12,000 demonstrated financial need |
Use of demonstrated need number
Colleges use demonstrated financial need to determine a student’s eligibility for need-based financial aid. Examples of need-based federal aid are:
These programs are for students who demonstrate significant financial need. Demonstrated financial need can also calculate how much a student may receive in school- or state-specific financial aid.
A few colleges promise to cover 100% of a student’s financial need. The colleges below meet all of a student’s demonstrated financial need with grants, scholarships, work-study, and loans.
In the example above, each of these schools would provide $12,000 in aid to the student.
However, most schools are not able to meet all of a student’s demonstrated financial need. Many students will have to turn to private scholarships, part-time employment, and personal savings to cover the costs of their education.
Final thoughts
Remember, it’s always important to go through the financial aid process at a college before writing it off as “too expensive.” Sometimes colleges with the highest price tags have the best ability to meet the student’s demonstrated financial need through institutional grants and need based scholarships. To find great scholarship opportunities that can make any school affordable, check out our free scholarship search tool, which custom-matches you with vetted scholarships!
Key Takeaways
