Need based aid policies are based on the belief that the primary responsibility for financing educational costs lies with the family, to the extent they are able. Emory uses information supplied on the Profile application when determining eligibility for institutional aid. Emory’s primary objective is to assist as many students as possible by using a combination of available funds. An application is not complete until all required documentation is submitted. Please review the required documents and associated deadlines in the Apply section.
Your responses from the Profile application are used to arrive at an Expected Family Contribution (EFC) using Institutional Methodology (IM). Institutional Methodology is a formula developed by financial aid professionals, in consultation with economists, to measure a family's ability to pay for college. The result of the formula is an expected family contribution--the family's share of college costs. The EFC produced by the IM is not the same as the figure calculated by the federal government to determine eligibility for federal student aid dollars.
IM assumes a family's capacity to pay is a function of income and assets. After subtracting appropriate allowances from income and from assets, a portion of the remainder is available to pay college costs. The basic equation used to determine a student's financial aid eligibility or "need" is as follows:
Expected Family Income
IM uses adjusted gross income (AGI) from the federal income tax form as a basis to determine family income. Untaxed income from social security, child support, and other sources is also considered in determining a family's total income. Both the parents' and the student's incomes are taken into account yearly and the parent’s data is required until the student reaches age 26.
If parents are divorced or separated, information from the custodial parent (the parent with whom the student lives) and information from the custodial parent's spouse (if remarried) is used to calculate expected family contribution. Emory requires financial information from both biological parents without regard to their marital status.
IM subtracts the following six allowances from income:
- Mandatory taxes: Federal income taxes paid. Allowance for state and local income, sales, and property taxes. FICA tax.
- Medical and dental expense allowance to account for exceptionally high medical and dental expenses reported by the family on Schedule A of the tax return
- Employment expense allowance to account for expenses related to working outside the home if both parents are employed or if the parent is single
- Annual Education Savings Allowance (AESA) recognizes that a family must save for the educational expenses of younger children at the same time they are sending older children to college. The allowance is designed so that families that save the specified portion of their income each year (about 1.5 percent up to a maximum of $1,800) will have saved about one third of their expected parent contribution for a private four year college by the time their child enrolls. IM assumes that the family will finance the remaining expected contribution from current income, assets, and/or borrowing.
- Income Protection Allowance (IPA) represents the median expenses of families living at the lower living standard defined by the U.S. Department of Commerce. It represents the income level below which a family has no discretion about how it spends its income. Parents with incomes at or below the IPA are not asked to make any contribution at all to their children's educational costs. Those with higher incomes have more choices about how they spend their income and are expected to use some fraction of their discretionary income to pay for their children's education.
- Elementary/Secondary Tuition Allowance to account for expenses paid by the family for private elementary or secondary school tuition.
IM considers assets in determining a family's ability to pay for education. Families with assets are in a stronger financial position than families with the same income but no assets. A family's expected contribution is somewhat higher if there are assets than it would be if the family had not saved at all. IM considers only a very small percentage of a family's assets as available to pay for college.
Savings and investments, including parents' assets held in the names of the student's siblings, are taken into account, as is the equity in other financial assets such as the home, other real estate, and business and farm assets.
Two major allowances--Emergency Reserve Allowance and Cumulative Education Savings Protection Allowance--are subtracted from assets before determining how much of a family's net worth should be available to pay for college expenses.
Emergency Reserve Allowance (ERA) protects assets for unanticipated expenses such as illness or unemployment. The amount is based on family size and represents six months of average family expenses as reported in the federal Consumer Expenditure Survey.
Cumulative Education Savings Protection Allowance (CESA) recognizes a family's need to save to finance their children's college expenses. The CESA protects an amount of assets equal to the amount the family would have accumulated if they had saved a specified percentage of their income each year for each child.
The final determination of eligibility and awarding rests with the financial aid administrator and is based upon uniform and consistent treatment of family circumstances and availability of funds.