Student Financial Aid

The Ins & Outs of College Financial Aid

According to the College Board, a record $122 billion in financial aid is available to students and their families this year, an increase of 11 percent over last year. About 60 percent of all college students receive grant aid. In 2003-2004 grant aid averaged about $2,300 per student at two-year public colleges, over $3,300 at public four-year colleges, and about $9,400 per student at private four-year colleges.

Financial aid is generally a student loan, but can also be a grant or a scholarship. It can either come from the federal government or from private sources.

To qualify for Federal financial aid programs, you must meet the following requirements:

• Have financial need
• Have a high school diploma or GED certificate, or pass a test approved by the US Department of Education
• Have a valid Social Security number
• Be enrolled in an eligible associate, bachelor, or graduate degree program
• Be a US citizen or an eligible non-citizen
• Maintain satisfactory academic progress once in school
• Certify that you will use federal student aid only for educational purposes
• Certify that you are not in default on a federal student loan and that you do not owe money on a federal student grant
• Comply with the Selective Service registration, if required

To determine your eligibility for Federal student aid, you must fill out the Free Application for Federal Student Aid (FAFSA). A CSS Profile might also required by your educational institution, as well as by scholarship programs, to determine eligibility for non-federal financial aid. This is administered by the College Board.

Check with the schools you are interested in or visit the College Board to verify if submitting the Profile is required and to confirm submission deadlines.

The FAFSA form is where you begin the process of applying for most federal financial assistance programs. Many schools also use the FAFSA as part of their process for awarding non-federal aid.

This form requires you to provide extensive information about you and your family’s finances, including your prior year’s income taxes, assets, family size, if others are attending college and much more.

Most students entering college straight from high school are considered dependent students. If you are dependent on your parents, their income and assets as well as your own must be reported on the FAFSA. This information is used to determine your eligibility and the Expected Family Contribution (EFC).

If you’re independent(over 24 or married), you’ll report only your own income and assets and those of your spouse.

[We’re dealing with the government here so expect many steps and lots of paperwork and enough jargon to fill a whole new dictionary.]

By law, you can't file your FAFSA before January 1. But have it ready to go by January 2nd. Financial aid funds, especially grant money, can be limited. Aid decisions are made on a first come - first served basis and you want to be close to the head of the line.

The FAFSA form must be filed every year you are seeking aid.

Once you submit this form, you will receive a Student Aid Report (SAR), which will tell you your Expected Family Contribution (EFC) or how much you and your family are expected to contribute towards college expenses.

The lower your EFC, the more financial aid you will likely receive.

If you want to estimate your EFC here are two calculators to help: SallieMae EFC Calculator and College Board EFC Calculator.

Your Student Aide Report is sent to the schools you choose, which use it to assemble your financial aid package.

Financial aid is awarded by need and need is defined as the difference between your cost of attending college and your Expected Family Contribution. If there is a difference, you may be eligible for aid.

To make matters even more complex, EFC can vary from one college to another. While the Federal method takes into account family income, assets, the size of current household, and the number of family members currently attending college to determine eligibility for federally sponsored financial aid such as Pell Grants, Perkins and Stafford Loans, and Federal Work-Study programs, the Institutional method considers other factors of the family’s finances to determine eligibility for private aid administered by the college.

Financial aid is available for international study if certain requirements are met; mainly that you are attending school at least half time and that you’re receiving credit at your home college.

Finally, since financial aid is determined in large part by tuition cost (the need), you would likely receive a much more generous aid package from a very expensive school than you would get from a more reasonably priced one.

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