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How do I interpret the “total financial aid” value?

Your projected total financial aid is the total amount of grants we project your child to receive over their entire college enrollment period (total, not per year). Note that this estimate only includes grants that you don’t have to repay – it does not include loans and scholarships.

Your projected financial aid will vary by school. We take into account that some institutions use the Federal Method (FAFSA) to compute financial aid, and others use an institutional method. We compute our estimates accordingly, using FAFSA or an approximated institutional method depending on your target school.

Wealthfront also takes into account that those methods might provide an imperfect view of the financial aid picture. Therefore we also consider the grants each institution provides to households within various income ranges (as reported by each school to the Integrated Postsecondary Education Data System (IPEDS) of the U.S. Department of Education).

Your final financial aid estimate is always the more conservative of the two estimates (the formula vs. the IPEDS data), and we adjust the estimate for projected inflation of 1.1% above general inflation.

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Nothing in this blog should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any security. Financial advisory services are only provided to investors who become Wealthfront Inc. clients pursuant to a written agreement, which investors are urged to read carefully, that is available at www.wealthfront.com. All securities involve risk and may result in some loss. For more information please visit www.wealthfront.com or see our Full Disclosure. While the data Wealthfront uses from third parties is believed to be reliable, Wealthfront does not guarantee the accuracy of the information.