Financial Aid 101
Financial Aid Officers
Awarding Financial Aid
Free step-by-step guide on financial aid with secret tips on saving money!
The FAFSA and its results are only the first step in understanding what the cost of education will be. Your FAFSA results are sent to the school(s) you plan to attend a short time after filing your FAFSA. From the FAFSA results, the school creates what's called an "award letter" that is sent to you for your review and approval. The award letter is usually a one or two page summary outlining the costs of the school and what aid is available to help you.
The amount of each award is based on a myriad of factors including, but not limited to: institutional or regulatory policies for minimum and maximum amounts, amount of funds available to the institution, and eligibility of the applicant. Let's take a look at a couple of sample financial aid award letters.
Below is a listing of your 2007-2008 financial aid award as of the date of this notification.
Awards listed under Award Detail as "predicted" are only projections of what you are eligible to receive. Final determination of your eligibility and the award amount is based on information from the state, a private donor, a college or division within the University, or the results of the federal financial aid application (FAFSA).
If you continue to meet all eligibility criteria associated with each fund, awards will be disbursed each term as indicated below.
Estimated Cost of Attendance: 15,070.00
Expected Parental Contribution: 360.00
Expected Student/Spouse Contribution: 35.00
Total Expected Family Contribution: 395.00
Equals Your Gross Financial Need: 14,675.00
Predicted Federal Pell Grant: 3,960.00
Student Assistance Grant: 1,722.00
A Bright Student Scholarship: 3,000.00
Federal Direct Sub Loan: 1,500.00
Federal Perkins Loan: 2,093.00
Federal Work-Study: 2,400.00
Total Award: 14,675.00
Let's do a quick analysis of this award letter. First, we find the estimated cost of attendance, or how much it costs to attend this particular university, before any aid. This is the "sticker price", and while it can be startling, it's not necessarily what you're going to pay.
From the sticker price we see the expected contributions of parents and students. These two numbers are typically derived from the results of the FAFSA. In this example, the family's expected family contribution is $395.00. This is the total amount that the family is expected to pay from their own financial resources and savings.
That leaves the college with a gap of $14,675.00 to fill, which they'll meet with a combination of scholarships, grants, loans, and work. In the award letter above, we show all types of aid being used. Scholarships and grants make up $8,682, money that is ideal in that it most likely never needs to be repaid.
Federal student loans come next, totalling $3,593.00. These are funds loaned at relatively low, fixed rates that must be repaid over time, typically 10 or 15 years.
Finally, federal work study provides $2,400.00 in funding. Consider this to be almost a paycheck advance that you work to earn. One of the expectations of the work study program is that you'll use the earnings towards educational expenses. Should you use them otherwise as directed, you'll owe a balance on your tuition.
Which sources of financial aid you receive depend strongly on the financial resources of you and your family. A high EFC indicates that according to the formula used by the Department of Education, you are theoretically able to afford a significant portion of your educational expenses without federal financial aid.