The Changing Nature of Financial Aid

A complex formula known as needs analysis took into account family income, assets, and other characteristics to determine the amount that a student and her family could afford to contribute to postsecondary education. The difference between the cost of attending the institution of the student's choice (including tuition, room, board, books, transportation, and other expenses) and the family's contribution established the amount of financial aid for which the student would qualify. Over the past decade, however, a major shift has occurred in the way states and colleges and universities award financial aid to undergraduate students in the United States.1 Both states and institutions have substituted measures of academic merit for