Student Aid Policy Analysis Papers
Student Aid Policy

Philosophy of Need Analysis

Mark Kantrowitz, Philosophy of Need Analysis, July 21, 2021

Download the Philosophy of Need Analysis paper in Adobe Acrobat (PDF) format.

Executive Summary

The overall goal of financial aid need analysis is to make it possible for all students to pursue a college education, regardless of family income and ability to pay.

Financial aid need analysis provides a standardized assessment of the family's ability to pay for college based on the family's income, assets and other financial resources.

The philosophy of need analysis provides principles that guide the design of financial aid formulas that evaluate a family's ability to pay for college. Need analysis calculates the shortfall between total college costs and ability to pay. Need-based financial aid is awarded to bridge this gap, thereby eliminating financial need as a barrier to college access and success.

After reviewing the history of need analysis, this paper presents an overview and detailed guide to the philosophy and principles of need analysis. A better understanding of the principles of need analysis will lead to improvements in assessments of ability to pay for college, enabling more students to enroll in and graduate from college.

This paper presents nine principles of need analysis. It discusses the snapshot philosophy and how changes in an applicant's financial and demographic information are handled. It defines financial need based on discretionary income, independently of college costs and available financial aid funds.

This paper also discusses the flaws in financial aid forms and formulas, such as the tension between efforts to simplify and improve the precision of need analysis.