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Link to original content: http://www.finaid.caltech.edu/howitworks/principles
Principles of Need Analysis - Financial Aid
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Principles of Need Analysis

  1. Parents and students have the primary responsibility for meeting postsecondary education costs.
  2. The distribution of financial aid resources should be based on the family's ability to pay, not willingness to pay.
  3. The assessment of a family's ability to pay should be independent of the amount of financial aid available and the cost of attending postsecondary school.
  4. There should be horizontal equity (also referred to as equity across the board) in the distribution of limited financial aid resources. That is, families in similar circumstances with similar resources should be expected to make similar contributions.
  5. Families in different circumstances should be expected to make contributions appropriate to their financial resources. This is known as vertical equity, and is sometimes referred to as leveling the playing field.
  6. The need analysis formula should provide a "snapshot" of the family's financial circumstances at the time of application.
  7. The need analysis results are a benchmark. As such, the final assessment of the family's ability to contribute to the student's postsecondary education costs is subject to the professional judgment of the financial aid administrator.