Indicator: Unmet financial need

Definition

The cost of college attendance students must pay out of pocket or finance through loans.

Recommended Metric(s)

Average net price (cost of attendance minus grants, scholarships, or tuition waivers from all sources) minus average expected family contribution (EFC), as calculated by Free Application for Federal Student Aid (FAFSA)

Type(s) of Data Needed

Administrative data

Why it matters

Higher levels of unmet financial need are likely to lead to more student loan debt or require students to work while enrolled in college, thus affecting their progression through college. In fact, students with more unmet need are less likely to graduate.1 At least in some states, it is the students with the lowest incomes who tend to have the highest levels of unmet financial need.2  In addition, Black students are less likely to receive nonfederal grant aid and receive lower average amounts than their peers.3 The Postsecondary Value Commission shows that Black students are, on average, burdened with approximately $8,300 in unmet financial need, whereas the average unmet need of White students is approximately $1,500 per year of attendance. 

What to know about measurement

Unmet financial need provides a more accurate representation of the out-of-pocket expenses a student is expected to pay than net attendance price, because unmet financial need considers each student’s EFC, as calculated by students’ FAFSA. (Note that as of the 2024-2025 school term, the EFC will be known as the Student Aid Index [SAI]). Although EFC data are tracked in administrative data systems and each college has this information available for the purposes of awarding federal financial aid, they are not reported publicly annually. Information on race and ethnicity is not collected on the FAFSA form currently, limiting regular disaggregation of unmet financial aid by race and ethnicity unless the data are linked to institutional or state records.

E-W Case Studies

FAFSA stock photo
Access to Student-Level FAFSA Completion Data in Iowa
Staff in all public high schools in Iowa can now access data on whether their students completed the Free Application for Federal Student Aid (FAFSA) and receive weekly FAFSA reports.
View Case Study

Source frameworks

This indicator appeared in five source frameworks reviewed for this report. Our proposed definition and measure align with work by the Institute for Higher Education Policy.

References