What is Financial Aid?
Regardless of what you’ve heard, it’s not too late to find a way to make paying for college manageable – not easy, but manageable. Paying for college is a family affair – parents and students work together to make college affordable. The earlier you start, the easier it will be. However, it’s never too late to make a difference. There are three basic ways to pay for college. You can pay for it before your child enrolls, while he or she is enrolled in college, or after graduation. Many people use a combination of the three. Think of the wide range of options as a smorgasbord from which you select the approaches that fit your family’s payment strategy.
• Billable Costs – Those costs that are billed directly by the institution to the family. Billable costs include tuition and fees, as well as room and board for students living on campus housing and taking meals on campus. Billable costs are sometimes referred to as direct costs.
• Campus Based Programs – Federal Loan, Federal Work Study, Federal Supplemental Educational Opportunity Grants, and Perkins loans are the three kinds of federally funded financial aid programs that are administered by colleges and universities.
• Cost of Attendance – This figure is determined for each college by totaling the costs for tuition and fees, room and board, books and supplies, personal expenses and travel.
• CSS/Financial Aid PROFILE – A fully online data collection and need-analysis service required by many colleges, universities and private scholarship programs in addition to the FAFSA. CSS/PROFILE is used in awarding private financial aid funds. Students pay a fee to register for the CSS/PROFILE and have reports sent to institutions and programs that use it.
• Early Action – Programs that allow students to be notified early about their admission without obligating them to attend that college. Even if accepted, students are free to apply to other schools and to compare financial aid offers.
• Early Decision – Programs that bind the student to attend that college. Therefore the student cannot renege on their commitment unless they are not accepted.
• Expected Family Contribution (EFC) – The amount of money that a family is expected to contribute toward the student’s cost of attendance. This number is the result of completing a FAFSA.
• Federal Methodology – The method used for calculating EFC based on the FAFSA.
• Federal Pell Grant – A Federally sponsored and administered program that provides grants based on exceptional need to undergraduate students. Congress annually sets the dollar range for grants.
• Financial Aid Award Letter – A notice from a college or other financial aid sponsor that tells the student how much aid is being offered. The award letter also usually explains how a student’s financial need was determined, describes the contents of the financial aid package, and outlines any conditions attached to the award.
• Gift Aid – Financial aid such as a grant or scholarship offered by the government and colleges.
• Grants – Gift aid based on financial aid.
• Institutional Methodology – Another method for calculating a family’s expected contribution based on the completion of a CSS/Financial Aid Profile. This amount is used for awarding financial aid from funds under the college’s control.
• Need Aware – Colleges that take financial need and its ability to satisfy it when making admission decisions.
• Need Blind – Colleges that make admission decisions without consideration of a family’s ability to pay or if they applied for financial aid.
• Non-Need Based Aid – Tuition discounts to attract certain students to a college.
• Professional Judgment – The authority of a school’s financial aid administrator to make adjustments to the data elements on the FAFSA, based on supporting facts and documentation. This authority is also regulated by governmental requirements and guidelines subject to strict compliance audits.
• Subsidized Loan – A need based Stafford loan on which the government pays the interest while the student is in college.
• Unsubsidized Loan – Non need based student loan on which interest accrues while the student is in college.
• Unmet Financial Need – The difference between the Cost of Attendance and the Expected Family Contribution. This is the amount on which financial aid and loans are based.
• Work Study – A federal program that provides campus based employment for those with the greatest financial need.