Which formula can determine a student's financial need?

• A. Cost of Attendance minus Parent Contribution
• B. Cost of Attendance minus Outside Scholarships
• C. Cost of Attendance minus Student Aid Index
• D. Cost of Attendance minus Personal Loans

Answer: (C)

To determine a student's financial need, the correct approach is to calculate the Cost of Attendance and then subtract any expected contributions or financial resources. The Student Aid Index (SAI) is a critical factor in this calculation. The SAI represents the amount a student and their family is expected to contribute towards the student’s education costs based on financial information provided in the Free Application for Federal Student Aid (FAFSA).

When using the SAI in conjunction with the Cost of Attendance, you obtain a clear picture of the financial gap that exists, which represents the student's financial need. Thus, the formula created by subtracting the Student Aid Index from the Cost of Attendance effectively identifies the amount of financial support required to help cover educational expenses.

By contrast, while other choices mention valid components of a financial aid assessment, such as parent contributions or outside scholarships, they do not encompass the comprehensive view provided by the SAI, which considers the family's overall financial situation. This makes the SAI a central element for accurately assessing a student’s financial need.