Applying for Financial Aid - Five Easy Steps

STEP 1:

STEP 2:

STEP 3:

STEP 4:

STEP 5:

Glossary of Terms

Scholarships and Grants

Work-Study Programs

Glossary of Terms

FAFSA, Free Application For Student Aid: The form used by the U.S. Department of Education to determine eligibility for federal aid. The form must be completed and filed by the deadline required by the institution(s) to which you are applying for aid. If the Financial Aid Profile of The College Scholarship Service (CSS) is required with applications, it should be filed by required deadlines as well.

Financial Aid Profile of the CSS, College Scholarship Service: Required by some institutions in addition to the FAFSA, both forms use a nationally standardized formula to evaluate and determine a family's contribution to the cost of the student's education. The formula applies several factors that are somewhat universally tailored to the circumstances of the particular family. Note: Both the FAFSA and the Profile of the CSS should be obtainable in high school guidance offices before January 1st of the year in which applicants intended to enroll.

Expected Family Contribution (EFC): An amount, determined by the formulas in the processing of the forms mentioned above, that indicates how much a family should be able to pay for college. Several factors such as taxable and non-taxable income, assets (such as savings and checking accounts), benefits(such as unemployment, or Social Security) are considered in the calculations. The EFC is the amount used to determine eligibility for Federal and State need-based aid, as well as most privately funded aid programs. The total cost of attending the institution(s) to which the applicant is applying less the EFC represents the demonstrated need of the student/family for aid. Of course, the need will vary according to the total cost of each institution to which the student applies.

The Student Aid Report (SAR): This is also more commonly referred to as the Financial Aid Package. Federal and non-Federal aid is offered to the student/family in a "package" to help meet the student's need. The package usually has as many as three basic components - scholarships/grants, loans, or work-study.

Scholarships/Grants

Federal Supplemental Educational Opportunity Grants (FSEOG): These are grants awarded to students who demonstrate need and eligibility determined in the processing of the FAFSA. These grants are awards that do not have to be repaid by the student.

Federal Pell Grants: These are awards available to students with the highest amount of financial need. Limits are placed periodically on the amount granted.

State Higher Education Grants: Most states fund grants available to residents of the states as long they attend a college or university in the state. Eligibility can be based on financial need or scholastic merit. Usually the FAFSA form is used for application for state grants.

Private Grants: Colleges and universities fund grants to students from their endowments. Eligibility may be based on financial need, scholastic merit, or participation in extracurricular activities. Requirements are stated in literature distributed by the financial aid office of the institutions. Also, many grants are privately funded by agencies and foundations to award specific qualities, interests, distinctions and accomplishments of students.

Loans

Federal Perkins Loans: These are loans awarded to students who demonstrate financial need, and much like the Perkins Grants, generally they are awarded to students with the most need.

Federal Family Education Loan Program (FFELP): Federal legislation in 1992 created this program which replaces and renames the Stafford Loan program and PLUS Loan program consolidating them under one program. Currently, many aspects of the Stafford and Plus programs exist.

Stafford Loans - Subsidized and Unsubsidized: These programs allow students to borrow directly from banks under federal requirements. The amount a student can borrow and the interest rates vary annually. New requirements and rates are announced each July 1st for an entire year. The key element of Stafford loans is that the government pays the interest on subsidized loans while the student is enrolled in college. The provisions of unsubsidized loans are the same except that the student pays the interest while enrolled in school rather than the government. Eligibility for subsidized loans is made from need analysis of the FAFSA form.

Federal Parent Loans For Undergraduate Study (PLUS): This program allows the parents of dependent students to borrow through the program to finance costs that are not covered in the "package" offered in the Student Aid Report (SAR). The maximum amount is limited to the total cost of education each year minus the aid the student received. Applications are made through any participating bank or lending agency.

Work-study

Work-study is often offered as a component of a Financial Aid Package. These programs allow students to work part-time during the school year. Jobs are usually on campus and the salary is used to pay for tuition or other expenses. Work-study can be funded by the federal government or the endowment of the college or university.

* Valuable resource: An excellent publication which describes in detail all of the above programs with comprehensive timetables, charts, a glossary of terms, etc. is Funding Your Education, published by the U.S. Department of Education. It is free, and you may order it by calling 1-800- 4FED-AID.