College Funding Forecaster Methodology

When families receive their first financial aid offer, it generally contains information about only the first year's costs and financial aid. Incoming freshmen and their parents may find it hard to understand from that brief snapshot what to expect financially over the course of an entire undergraduate college career.

The College Funding Forecaster helps students and families project total out-of-pocket expenses — and potential borrowing commitments — for four to six years, the typical time it takes to earn an undergraduate degree.

This tool provides estimates. The actual amounts students may pay or borrow will differ from these estimates for many reasons, including:

  • The amounts a particular college charges may change in ways different from the assumptions made within this tool.
  • The actual cost of attendance may be higher or lower than estimates provided in a college's financial aid offer.
  • Students may take more or less time to earn a degree.
  • Students may make personal decisions regarding housing, book and supply purchases, transportation and other expenses that may affect the actual cost of attendance for any academic year.
  • Federal or state governments may change the amounts, limitations or qualifications for the grants or loans offered.
  • The college may change the amounts, limitations or qualifications for the aid it provides.
  • Outside entities awarding private scholarships or grants may change the amounts or availability of funds.
  • The student's situation may change so that he or she no longer qualifies for the aid or loans received in the first year.

Cost of Attendance

The annual amounts for tuition and fees, room and board, books and supplies, and other expenses are provided for the selected institution based on data from the U.S. Department of Education's College Scorecard (https://collegescorecard.ed.gov/). The user should enter dollar amounts to match information in the financial aid offer received or based on information obtained from the educational institution and make adjustments to fit their specific situation.

Gift Aid

Average amounts for Pell Grant and other renewable grants for the selected institution are provided based on data from the U.S. Department of Education's College Scorecard. The Pell Grant is based on the expected family contribution (EFC), and the user should refer to the financial aid offer to identify the correct amount of Pell Grant funds the student may be eligible to receive. It may be $0.00.

The annual amounts for other one-year grants as well as one-year and four-year scholarships are different for each individual based on need, academic achievement and availability of funds. The user is responsible for entering these amounts in accordance with the financial aid offer received from the educational institution. In addition, the user is responsible for including funds for outside grants and scholarships earned by the student but not included in the financial aid offer.

Other Funding

Similar to scholarships and grants, other funding is based on personal experiences. The user enters the total amount of savings, gifts, income and other funding supplied by the student, family or other sources that will be used in each of the first four years of their college career.

Federal and Institutional Loans

Average amounts for federal Direct Loans are provided for the selected institution based on data from the U.S. Department of Education's College Scorecard. Note that there are federal student loan limits based on year in school that can provide a maximum amount available. These amounts can be found at https://studentaid.gov. The user is responsible for entering annual institutional loans for the student in accordance with the financial aid offer received from the educational institution.

College Funding Forecast

Current-year calculations are based on information entered by the user. Default calculations for years 2–6 are based on the following.

Cost of Attendance

An annual increase is based on the Higher Education Price Index (https://www.commonfund.org/) for the most recent complete year. This index is issued annually by Commonfund Institute and is provided to educational institutions as a tool to plan future budget and funding increases.

Gift Aid

Pell Grant projections are based on award level decreases as Expected Family Contribution (EFC) increases from year to year.

Assumptions include:

  • Personal income increases according to the annual change in personal income for the most recent year included in data provided by the Bureau of Economic Analysis at http://www.bea.gov.
  • Median household income in the United States, a main component in calculation of EFC, in inflation-adjusted dollars as published at https://data.census.gov.
  • An increase to the median family annual income corresponding to the average personal income increase.
  • An increase to EFC based on the increased annual income for a family with two dependent children in accordance with the increments available at https://smart-search.app.
  • Each $100 increase in EFC (with all other factors equal) results in a $100 decrease in Pell Grant funds awarded (https://fsapartners.ed.gov). Using the assumption immediately above, projected Pell Grant funds decrease correspondingly from the current year to year 2. Years 3 through 6 are based on corresponding decreases in Pell Grant funds.

Projections for other one-year grants, other renewable grants, one-year scholarships and renewable scholarships are based on information entered by the user. Users should consider whether changes in the student's situation will affect qualifications for renewable funds.

Savings, Gifts and Other Funding

Funding amounts from savings, college plans, earnings and gifts are input by the user for years 1–4. Users should consider whether changes in the student's and family's circumstances will affect these projections.

Federal and Institutional Loans

The current-year federal loan calculations should include any federal Direct Loan (subsidized and unsubsidized) amounts for the student entered by the user. The user is encouraged to refer to the aid offer to determine if federal student loans carry interest subsidies. Assumptions include:

  • The student is an incoming freshman.
  • The student chooses to accept the same percentage of the applicable federal student loan limit for years 2–6 as the student accepts for the current year.
  • Federal Direct Loan annual limits (https://studentaid.gov) of:
    • $5,500 for the current year.
    • $6,500 for year 2.
    • $7,500 annually for years 3–6.
  • Federal Direct Loan cumulative limit of $31,000.

Other student loans included in the aid offer are forecast to be equal to the current-year amounts for years 2–6. Users should consider whether changes in the student's and family's circumstances will affect these projections.

Forecasted Funding Gap

Funding Gap is the difference between cost of attendance and the funding from the financial aid offer, external scholarships and grants, and student and parent contributions. This is the amount of private student loans or other funding the student will need.

Using Your Forecast

The Funding Gap amount reflects changes the user made on the previous screen.

The Total Forecasted Student Debt amount includes all potential loans in the student's name. It does not include Direct PLUS Loans for parents included in the financial aid offer or any other loans taken out by parents.