How need-based financial aid works

Duke makes a twin commitment to all prospective undergraduates who are U.S. citizens or permanent residents. Duke will admit applicants without regard for their ability to pay, and then ensure that these students are able to attend Duke by meeting 100 percent of their demonstrated financial need.

Only a small number of schools make such a commitment—for it comes with a significant price tag—but Duke makes the investment based on an important principle. In 1962, the university's admissions committee wrote that "lack of sufficient funds should never prohibit the admission and matriculation of a good student who is well qualified to gain from and contribute to the undergraduate life of the colleges." This is the same value that Duke upholds today. Approximately 45 percent of Duke undergraduates received some form of financial aid in 2005-06, and for about 85 percent of those students, that aid was based entirely on financial need.

Assessing need

During the undergraduate admissions process, every applicant is invited to apply for financial aid. Because financial circumstances can change, students may also apply for aid at any point during their academic careers. Applicants provide relevant financial information, including family income and assets as well as significant expenses. Duke then uses a formula shared by a consortium of many of the nation's top colleges and universities to determine what portion of the total cost of education the student and parents will be asked to contribute.

Students with significant assets, like college trusts, will be asked to make personal contributions. In addition, Duke estimates that the average student can save around $2,200 each summer, and this, too, is included in the estimated student contribution.

Because every family's financial situation is unique, Duke gives careful consideration to personal circumstances when determining parent contributions. A high income family may have extraordinary medical bills; a middle income family may be paying multiple tuition bills. In 2005-06, students from families with incomes ranging from below $25,000 to above $150,000 qualified for need-based aid. While definitions of "middle income" vary, a breakdown of aid recipients by income quartile shows that half of the undergraduates receiving need-based aid in 2005-06 came from families with incomes between about $47,000 and $118,000.

Once Duke calculates student and parent contributions, these are deducted from the total cost of education, and the result is the student's demonstrated financial need. Duke is committed to meeting this need.

Next: Financial aid "packages"