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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, and students are notified in their admission letter if they have been awarded a merit scholarship. Approximately 60% of first-year students receive this award. The amount depends on GPA and scores on standardized tests. Students whose academic profile is near our average are potentially eligible for a scholarship.
Important note for music majors: Students applying to the Lamont School of Music are holistically considered for a comprehensive scholarship (ranging from $1,000 to full tuition) that takes talent, academic merit, and financial need into consideration. This means students who are awarded a music scholarship are not eligible to receive an admission merit scholarship or any institutional need-based grants.
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 the Expected Family Contribution?
The 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 the EFC calculated?
Your EFC is determined from the data provided on the financial aid application. Family income is only one of several factors involved. Other important factors include the number of members in your household, the number of other siblings attending college, and both student and parent financial assets. If both the FAFSA and CSS Profile were submitted, 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, 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 the FAFSA has been submitted, you can see the FM Expected Family Contribution by logging into the FAFSA and viewing the Student Aid Report.
- Institutional Methodology (IM): Many colleges and universities that award 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. The 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 need-based aid cannot exceed 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 FM EFC.
- Work-Study: While there is no maximum EFC to be considered for work-study, students must still have financial need after other need-based awards have been added to your 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 is offered work-study.
- Direct Subsidized Loan: Students who still have financial need after the other types of need-based aid have been added to their financial aid package will be offered a Direct Subsidized loan 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 total cost of attendance, however.
That's it for this week! We hope this email has helped shed some light on what can be a very confusing process.
Want to review past Financial Aid 101 emails? Check out the archives!
Up next week: Comparing Award Offers
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