Financial Aid Assessment Grant Management

There are multiple scenarios in which TADS Grant Management can help fairly distribute finite pools of grant or aid funds among a population.

The TADS Grant Management program helps financial aid administrators distribute scarce tuition grant money in the most effective way possible.

TADS calculates two numbers that are the foundation of Grant Management:

Student Tuition Need (or simply Tuition Need). This is the tuition reduction a family needs for a particular child in the household, the amount without which the family would begin to experience financial stress.

Family Tuition Need. This is the sum of Student Tuition Need for all children in a household applying to your school.

Whenever an applicant does not receive the full amount of Tuition Need as financial aid, that applicant will be left with some Unmet Need and will experience financial stress when trying to make tuition payments.

In the past, the main question for Grant Management was, “How can I best distribute financial aid money to applicants?” TADS has determined that the question is better asked, “How can I best distribute the financial stress (or Unmet Need) among the applicants for assistance?”

The Solution

Because the answer to this dilemma is very much a matter of local philosophy, the TADS Grant Management program offers three possible solutions to the problem of limited resources. Financial aid administrators can then decide, after the fact, which solution is best for their school.

Solution one, Equal Ratio, gives some money to everyone with need and generates the largest number of grants.

Solution two, Equal Unmet Need, gives more money to needier applicants but reduces the number of grants.

Solution three, Equal Stress, gives much more assistance to the neediest applicants and generates the fewest grants.

Some Terms

Suggested Grant. A Suggested Grant is the amount of money TADS recommends a school give to an applicant from its limited resources. The Suggested Grant will always be less than Student Tuition Need.

Student Unmet Need. Student Unmet Need (also called Unmet Need) is the difference between Student Tuition Need and what a student actually receives in aid. If an applicant needs $2,000 and receives $1,500 in aid, he/she has an Unmet Need of $500.

Summary

A comparison of the three methods shows that the Equal Ratio Method results in the greatest number of grants, followed by Equal Unmet Need, followed by Equal Stress. The neediest applicants receive the most money under Equal Stress, less under Equal Unmet Need, and the least under Equal Ratio.

Suggested Grants for each of the grant methods
Applicant Number Tuition Need Equal Ratio Equal Unmet Need Equal Stress
Total $22,000 $11,000 $10,990 $11,000
1. $4,000 $2,000 $2,770 $3,070
2. $3,600 $1,800 $2,370 $2,580
3. $3,200 $1,600 $1,970 $2,080
4. $2,800 $1,400 $1,570 $1,590
5. $2,400 $1,200 $1,170 $1,100
6. $2,000 $1,000 $770 $580
7. $1,600 $800 $370 $0
8. $1,200 $600 $0 $0
9. $800 $400 $0 $0
10. $400 $200 $0 $0

Addendum – Charts

The charts below represent the three methods of grant distribution. Each succeeding method gives more money to the neediest applicants (with less Unmet Need), but usually results in fewer overall grants.

Equal Ratio

Equal Ratio

Everyone with Tuition Need is given a grant that is a fixed percentage of his/her need. In this example everyone receives a grant that is 50% of need. However, 50% of everyone’s need is unmet. It is easy to see that Unmet Need is greater for the neediest applicants even though they receive the greatest amount of aid.

Equal Unmet Need (also called Equal Payment)

Equal Unmet Need (also called Equal Payment)

Everyone who receives a grant has the same Unmet Need. You can see that in this distribution, the neediest applicants receive more. But the neediest applicant is still expected to pay as much for tuition as the less needy applicants.

Equal Stress

Equal Stress

The less needy you are, the more the Unmet Need. If you have 10% more contributing power than the person next to you, you will have 10% more Unmet Need.