Removes expected family contribution from calculation of financial need under circumstances in which public institutions of higher education may reduce student's institutional financial aid.
The removal of the expected family contribution from the financial need calculation could substantially alter how financial aid is distributed among students. By relying solely on the cost of attendance, more students may find themselves eligible for institutional financial aid, leading to potentially increased access to education for those from lower-income backgrounds. This change is expected to uplift financial assistance frameworks within public institutions, thereby supporting students who may otherwise struggle to afford higher education.
Senate Bill S1023, introduced in New Jersey, aims to address the calculation of financial need for students seeking institutional financial aid at public higher education institutions. Specifically, the bill proposes the removal of the expected family contribution (EFC) from this calculation, which is currently defined as the difference between the cost of attendance and the EFC. As a result, the bill would redefine 'financial need' to be solely based on the cost of attendance, making it potentially easier for students to qualify for financial aid.
Despite its intention to broaden access, the bill has raised discussions among policymakers and educational stakeholders. Supporters argue that this reform is necessary for equity, ensuring that students' backgrounds do not restrict their educational opportunities. However, critics are concerned that without the EFC, institutions may face challenges in balancing their financial resources, potentially leading to an unsustainable model of funding educational aid. Moreover, there is debate about how effective this change will be in meeting the diverse financial needs of students while preserving the financial integrity of public higher education institutions.