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No Loan Colleges

Yes, it is true that some colleges meet 100% of need.

As we all know, parents and students are always on the lookout for creative ways to pay for college. For students with excellent academic standings and outstanding extracurricular resumes, taking a closer look at colleges that meet 100% of demonstrated need may be the magic ticket to attend college without the big price tag.

But, there are a few things you need to know in order to take advantage of these generous colleges and universities. 

What is Demonstrated Need?

The amount a family can pay for student to attend college is called Estimated Family Contribution or EFC. The EFC is a very important number that the federal government will use to determine need-based aid (pell grants for example) and the number that many colleges will use to determine the private need based aid that they will offer students. A family’s EFC can be anything from $0 to over $100,000/year and anything in between. The EFC is calculated by using the Free Application for Federal Student Aid (FAFSA). 

The FAFSA is based on a family’s prior year Income Tax Statement. The student fills out the FAFSA as himself. The student will need any tax information from the prior year as well as the financial information, income, assets, and tax returns from his parents. If the parents’ income and tax returns are not yet available, students can use estimates and then amend the FAFSA when final numbers are complete.

Once the FAFSA is submitted, it will be reviewed to determine the EFC for that student for the coming academic year. Students will receive a Student Aid Report (SAR) that will include the EFC for the coming year which will be sent to the college the student is attending. 

Once you have obtained your Estimated Family Contribution, you can apply that number to a particular school’s tuition price. For example, if College X costs $50,000 for one year of tuition, room and board, but your EFC is only $20,000, the difference in cost and what you can pay is $30,000. That difference of $30,000 is called your Demonstrated Financial Need.

Sample College 1Sample College 2
Tuition, Room & Board: $50,000 Tuition, Room & Board: $35,000
EFC: -$20,000 EFC: -$20,000
Demonstrated Need = $30,000 Demonstrated Need = $15,000

While your EFC is a fixed number that is used for every school, your Demonstrated Financial Need changes based on the cost of each individual college. 

Knowing and understanding your Estimated Family Contribution and your Demonstrated Financial Need are the central numbers to navigating financial aid and especially important for identifying colleges that will meet 100% of need.

Colleges that Meet 100% of Need

In the United States, there are a number of colleges and universities that will cover 100% of your demonstrated need. These schools will not require student loans to make up the difference between what a family can afford to pay and the overall cost of attendance. 

The colleges that meet 100% of need are typically schools that are trying to attract the country’s top academic students. In addition, they are schools that traditionally have significant financial contributions and endowments to subsidize their operation. Of course, you have to get accepted to one of these schools to take advantage of their generous financial aid policies, but if you have the academic prowess and the good fortune required to gain admission, then choosing one of these colleges can be a great way to manage the cost of a four-year degree.

These colleges meet 100% of Demonstrated Financial Need and do not require their students to take student loans. Each of these schools will offer students a financial aid package that consists solely of scholarships, grants and work study without requiring any student loans.

Colleges that Meet Nearly 100% of Need

There are also a number of colleges and universities that will meet nearly 100% of Demonstrated Financial Need with a combination of federal student loans and scholarship aid or will meet 100% of need for students with family incomes under certain thresholds. For example, starting in 2020, at Colgate University, aid will be loan free if family income is less than $125,000 total. You have to look at the specific income requirements for each of these schools as they are all a bit different.

What if My Estimated Family Contribution is Too High?

The above lists are great for families who have low Estimated Family Contributions. But what if your EFC is over $50,000 per year? At the above schools, you will basically pay full price as you will have none or nearly no demonstrated need. If that is the case for your family, then it’s important to decide if you are willing to pay full price at these prestigious colleges. If not, then look for schools that provide scholarship money based on academic merit rather than demonstrated need. There are numerous colleges that will attract high achieving students with merit aid regardless of a family’s income or demonstrated need.

Intentional Applications

Overall, the most important part of the college admissions process is understanding the financial aid system and making thoughtful and intentional choices about which schools to apply to before you start visiting colleges and submitting applications. Knowledge is power, and the more you know about your financial standing in conjunction with each school’s unique take on financial aid, the more successful you will be in finding the right school for you.

damienschuster