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Financial Aid 101:
How Your Aid Package is Determined

University of Denver Financial Aid

We get many questions about how financial aid packages and award amounts are determined. While the process is admittedly complicated, we hope this email will help you understand the basics of DU’s financial aid awarding policies.

Merit Scholarships
Students are automatically considered for merit scholarships when they apply for admission to DU. This means the FAFSA and CSS PROFILE are not used to determine eligibility for these awards. Approximately 60% of first-year students receive a merit scholarship. The amount awarded depends on GPA and scores on standardized tests.  If your student's academic profile was near our GPA and test score average, he or she was potentially eligible for a scholarship.

Need-Based Aid
Students must have financial need to be eligible for need-based aid. So how exactly is financial need calculated? To explain, we need to first examine your Expected Family Contribution (EFC).

What is my Expected Family Contribution?
Your Expected Family Contribution (EFC) is a measure of your family’s financial strength and an estimate of how much of your family’s financial resources should be available to help pay for your student's education. It is not intended to represent a minimum or maximum dollar amount that you are required to pay DU. Instead, it’s a number we use as a benchmark to determine eligibility for need-based aid.

How is our EFC calculated?
Your EFC is determined from the data provided on your student's financial aid application. Family income is only one of several factors involved. Other important factors include the number of household members, the number of other siblings attending college, and the financial assets of both students and parents. If you submit both the FAFSA and CSS PROFILE, you will actually have two EFCs: one calculated using Federal Methodology and one calculated using Institutional Methodology.

  • Federal Methodology (FM): This formula is used to determine eligibility for all federal aid, including Pell Grants, Direct loans, Perkins loans, work-study and Colorado state aid. The FM EFC is determined using the data provided on the FAFSA. This EFC calculation excludes some forms of income and expenses, and eliminates some assets from consideration. Once you submit the FAFSA, you can see your FM Expected Family Contribution by logging into and viewing the Student Aid Report.
  • Institutional Methodology (IM): Many colleges and universities awarding institutional scholarship funds use some variation of Institutional Methodology as established by the College Board. DU uses it to determine eligibility for institutional awards, such as the DU Educational Grant. Your IM EFC is calculated using the data provided on the CSS PROFILE. This EFC calculation excludes certain losses and includes several income and asset factors not considered through the FM formula (such as tax-deferred income and equity in the home). We believe that, in most instances, this method more accurately determines a family’s ability to pay for college. 

How is "financial need" determined?
Financial need is calculated by subtracting your Expected Family Contribution from your total Cost of Attendance.

Cost of Attendance - EFC = Financial Need

How does this impact my student's financial aid award package?
Once we know your student's financial need, we can determine eligibility for need-based aid. An important thing to remember is that the total amount of your student's need-based aid cannot exceed his or her financial need.

DU Need-Based Aid:
The University of Denver is not able to meet the full demonstrated need of all students who apply for financial aid. However, we do meet a portion of financial need with institutional need-based aid—namely, the DU Educational Grant (DUEG). The amount of DUEG funding your student may be eligible to receive is tied to the merit scholarship. In other words, the more financial need your student demonstrates and the higher his or her merit scholarship, the more he or she will be eligible to receive in a DU Educational Grant. 

Federal Need-Based Aid:

  • Federal and State Grants: These awards—which include the Federal Pell Grant, the Federal Supplemental Educational Opportunity Grant (SEOG), and the Colorado Student Grant—are offered to students who have a very low Expected Family Contribution.
  • Work-Study: While there is no maximum EFC to be considered for work-study, your student must still have financial need after other need-based awards have been added to his or her package (remember that the total amount of need-based aid cannot exceed your financial need). However, since funding is so limited, work-study is awarded through a lottery system. Therefore, not everyone who would otherwise be eligible will be offered work-study.
  • Direct Subsidized Loan: If your student still has financial need after the other types of need-based aid have been added to his or her financial aid package, a Direct Subsidized loan will be offered for up to $3,500. 

Non-Need-Based Aid

  • Direct Unsubsidized Loan: All students who submit the FAFSA will be offered a Direct Unsubsidized Loan since this loan does not require financial need.
  • Parent PLUS Loan: Although it will not be automatically offered in your student's financial aid package, the Parent PLUS Loan is a credit-based loan that does not require financial need. It cannot exceed the total cost of attendance, however.

We hope this email has helped shed some light on what can be a very confusing process! If you still have questions after you have reviewed your student's estimated award letter and supplemental materials included in the packet, please feel free to contact our office.

Up next week: Determining Unmet Cost

Want to review past Financial Aid 101 emails? Check out the archives!

Contact Us:

Financial Aid • University Hall 255 • 2197 S. University Blvd • Denver, CO 80208

Ph: 303.871.4020 • Fax: 303.871.2341 • Email:

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