Demonstrated need and colleges’ financial aid policies: a calculator

This calculator is designed to help you explore the impact of colleges’ need-based financial aid policies on your financial aid offers and out-of-pocket cost.

To use this calculator, it’s important to understand two fundamental concepts in need-based financial aid: 1) demonstrated need and 2) percent of demonstrated need met.

What is Demonstrated Need?

Your demonstrated need is the amount of need-based financial aid you may be eligible for given to two factors:

  1. A college’s cost of attendance.
  2. Your Student Aid Index (SAI) as calculated by either FAFSA or CSS Profile.

Colleges that only require FAFSA use the FAFSA Student Aid Index (SAI) to measure a family’s ability to pay and determine the student’s eligibility for institutional need-based aid. Colleges that require the CSS Profile calculate a custom Student Aid Index (SAI) using that application to measure a family’s ability to pay and determine the student’s eligibility for institutional need-based aid.

How to know your Student Aid Index?

You can calculate your FAFSA SAI using the College Money Method SAI Calculator. You can calculate your CSS Profile SAI (currently referred to as Expected Family Contribution, or EFC) using the College Board’s EFC Calculator. Hint: When using the College Board’s Calculator, choose “Institutional Methodology”, which will provide you with the CSS Profile calculation for SAI.

Every college determines your demonstrated need, or financial aid eligibility, at their college using this fundamental equation:

College’s Cost of Attendance
– Student Aid Index (calculated either by FAFSA or CSS Profile)
= Your Demonstrated Need (or Your Financial Aid Eligibility)

So, your demonstrated need is the remaining money needed to pay for college after deducting your Student Aid Index, or the amount you are able to pay according to the respective financial aid application.

What is the Percent of Demonstrated Need Met?

While you may have a certain amount of demonstrated need at a college, this doesn’t necessarily mean that you will receive a financial aid package to equal that need. Many colleges don’t have the ability to provide a financial aid package that can meet a student’s full need. Luckily, colleges publish data on a yearly basis that tell you what percent of demonstrated need they meet on average. You can know ahead of time just how generous a college is with their need-based financial aid offers.

Let’s take an example. Butler University meets 70% of demonstrated need on average. If your FAFSA SAI is equal to $22,000, given their cost of attendance of $62,700, your demonstrated need is equal to $40,700 ($62,700 – $22,000). However, because, on average, Bulter offers a financial aid package that meets 70% of that need, you should expect a financial aid offer of about $28,500 (70% of $40,700). This leaves you with a gap in the financial aid offer of $12,200, which is an additional out-of-pocket cost beyond your Student Aid Index of $22,000.

It’s essential to understand which colleges “gap” your financial aid, and by how much, so that you can plan for these additional costs. You can use this calculator to explore colleges’ financial aid policies and their impact on your expected ability to pay.