Finding the Funds to Pay for a College Education

Finding the funds to pay for your child's college education is like filling a glass. The full glass represents the cost of education at any one school, which includes tuition, fees, room and board, books, transportation, and personal expenses.

The first ingredient is what you'll have to contribute from your own pocket, which is determined by your student aid index (SAI), formerly called the expected family contribution (EFC), which is calculated by the federal government's financial aid formula. This contribution can come from savings and/or loans.

Your SAI/EFC is the same regardless of the college your child chooses. The difference between your SAI/EFC and the cost of a particular college equals your child's financial need, which is a variable.

To meet this financial need, your child might be eligible for financial aid in the form of loans, grants, scholarships, and/or work-study funds from the federal government, college, and/or independent organizations. Your child may not receive all the financial aid he or she needs. If so, you'll have to top off the glass with more of your own funds.

This illustration represents one possible financial situation. Actual percentages may vary from student to student.