|
How Eligibility for Need-Based Aid Is Determined
Financial aid programs were created with the idea that the primary responsibility for paying college costs rests with the student and his or her family. Need-based financial aid is available to families who demonstrate a need for additional resources to help them pay college costs. The formula used to determine whether you are eligible for need-based aid is:
|
|
Cost of Attendance |
| - |
|
Expected Family Contribution (EFC) |
|
-
|
|
Other Financial Resources
(private scholarships, veterans' benefits, etc.) |
| = |
|
Eligibility for Need-Based Aid |
Cost of Attendance is the estimated cost of attending the University of Michigan for a full academic year (two semesters--Fall and Winter terms), including estimated amounts for tuition and fees, books and supplies, room and board, plus a modest allowance for personal/miscellaneous expenses. Please note that the budget allows the same amount for room and board whether you live on or off campus, UNLESS you are living with your parents (in which case the budgeted amount will be less).
Expected Family Contribution (EFC) is the amount that your family is expected to pay toward your cost of attendance. It is derived from an assessment formula that is applied uniformly to all aid applicants and considers the financial information provided on the Free Application for Federal Student Aid (FAFSA) and, for some applicants, the CSS Financial Aid PROFILE application, as well as from other documents you may have filed with the Office of Financial Aid. It is made up of two parts:
- The Parent Contribution -
an estimated amount, based on your parents' income and assets (including cash, checking, savings, and money market accounts, etc.; investments and real estate holdings; and business equity), that your parents are expected to pay toward your college costs for the year. Allowances for living expenses (based on family size), taxes paid, the number of siblings in college, and asset protection for retirement are built into the formula.
The Student Contribution - an estimated amount that you are expected to pay toward your college costs for the year. It is based on your income and a percentage of your savings and other assets.
How Need-Based Financial Aid Is Awarded
Your eligibility for need-based aid is the total Cost of Attendance minus your Expected Family Contribution and other financial resources. In order to meet your need, OFA first awards any federal and state grants and scholarships for which you are eligible (e.g., Pell Grants, Academic Competitiveness Grants, SMART grants, and Michigan Competitive Scholarships). Federal direct loans are then added to your aid package. Applicants with financial need beyond federal and state grants and loans are offered assistance through the Perkins Loan, Health Professions Loan, or Nursing Loan programs and the Work-Study program, all of which by federal regulation must be awarded to students with the greatest need.
OFA attempts to distribute grant, loan, and Work-Study funds equitably among the population of all eligible applicants who apply by established deadline dates. Award amounts are determined by a combination of demonstrated financial need, federal award maximums, and available funding, among other factors.
If, after federal and state grants, scholarships, loans, and Work-Study are applied, a gap remains between the cost of attendance and the student's resources and aid, awards are made from need-based university and federal grant sources such as the Michigan Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG). Because FSEOG funds are limited, they are awarded only to applicants with the most need.
Students who require additional funds to cover their expenses and those who are not eligible for need-based aid may wish to consider private educational loans.
A Note about Scholarships and Other Resources
Students may seek scholarships from private sources and
U-M schools and colleges and may use other resources such as ROTC scholarships and veterans' benefits. According to federal regulations and university policies, these forms of assistance must be considered among the student's financial resources when eligibility for need-based aid is determined. However, they will improve your overall aid package. In general, if you receive outside aid (including scholarships from U-M schools and colleges), it will first be applied against any costs that have not been accounted for in your financial aid package (i.e., the gap, if one exists, between the cost of attendance and your EFC plus the financial aid offered). Next, it will be used to reduce your loan or Work-Study award, thus reducing the funds you must borrow or earn by working. Only if all loan and Work-Study awards have been replaced by scholarships or other resources will the amount of your grant aid be reduced.
There are some important exceptions to this rule. If you own a 529 plan, such as a Michigan Education Trust contract, or if you receive a scholarship that is partially or fully funded by the state, such as the Michigan Competitive Scholarship (MCS), the Michigan Promise Scholarship, the Detroit Compact Scholarship, or the Wade McCree Scholarship, it will be applied against your need-based grant awards before reducing your need-based loan or Work-Study awards. In addition, receiving either a Wade McCree or a Detroit Compact Scholarship will reduce your eligibility for the university-funded Michigan Tradition and Michigan Experience Awards and for the State of Michigan Competitive Scholarship.
Please note: Some scholarships require full-time enrollment before disbursement.
Special Note to Nonresident Students:
While the Office of Financial Aid does not have sufficient funds to meet the full demonstrated financial need of nonresident students directly, students who are eligible for scholarships from U-M schools or colleges or other private sources may be able to cover their costs through these combined resources. Other options often utilized by nonresident families are the Federal Direct PLUS Loan (available to the parents of undergraduate students), the Grad PLUS Loan (for graduate students), and private loan sources.
|
For a PDF of this page, please click 
