How Much Financial Aid Will I Get?
Today, applying to college and concerns about paying for it go hand in hand. Some students may shy away from certain schools of interest because of a high price tag. However, it is important for students to know that financial aid packages are based on specific information, including:
- The school’s tuition and fees
- The student’s or parents’ finances
- The student’s merit
- The availability of federal funds at the school
- The school’s scholarship resources
Private schools, because they entail greater costs, also end up being some of the most generous student aid providers. Students should consider applying to all schools of interest, irrespective of the cost of attendance (and the extent that the admissions applications are within budget). If accepted, the school will provide a financial aid package, and the student can compare all offers. It is better for students to create options rather than limit themselves early in the college application process. Students can also use the FAFSA4caster to estimate their financial aid.
How to Apply for Aid
The first step in the process of applying for financial aid is to complete the Free Application for Federal Student Aid (FAFSA). Based on information reported on the FAFSA, schools will calculate the student’s financial aid package. It is important for students to note that schools sometimes look at the FAFSA to determine eligibility for some merit-based scholarships and grants. Even if a student has financial resources that may exclude her from receiving financial aid, it still may be a good idea to submit the FAFSA (contact the school for more information).
After the FAFSA is completed, the applicant will receive instructions on how to access a Student Aid Report (SAR). The SAR is a summarization of all information reported on the FAFSA and should be checked for accuracy. As Federal Student Aid describes, the school calculates a financial aid package in the following manner:
- Step 1: The school determines the cost of attendance for the student (based on how many credits will be taken and whether the student will reside on campus or commute).
- Step 2: The school will determine the Expected Family Contribution (EFC).
- Step 3: The EFC is subtracted from the cost of attendance to determine the amount of need-based aid.
- Step 4: The school will then subtract the need-based aid from the cost of attendance (after any EFC is deducted) to determine the amount of non-need-based aid.
The need-based federal aid includes the following:
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Federal Pell Grant
- Direct Subsidized Loan
- Federal Perkins Loan
- Federal Work-Study
The non-need-based forms of financial aid are as follows:
- Direct Unsubsidized Loan
- Federal PLUS Loan
- Teacher Education Access for College and Higher Education (TEACH) Grant
In addition, schools will consider eligible students for scholarships and grants. To close the gap between aid provided and cost of attendance, some students may need to borrow a private loan. These loans usually have less favorable terms than federal loans, including stricter repayment terms. Schools will not require students to borrow from a particular lender, though many schools will provide a student with a list of popular options.