30 Jun Know These Key Financial Aid Terms
Well, half the year is gone already. I hope you are enjoying your summer, and getting in some family fun time. Rising high school seniors will have some work to complete, too, as there is a lot of college planning that needs to be done over the next few months.
One thing you definitely need to be aware of is that the financial aid “season” begins on October 1. That is the time when financial aid applications for the 2023-2024 academic year will become available online. Although there are various state and institutional deadlines for the latest time to apply, you want to complete those applications as soon as possible, so you don’t miss out on any financial aid opportunities. That gives you about three months to familiarize yourself with the process, learn about deadlines, and gather your documentation. To help you get a good start, here are some key financial aid terms you will need to know:
- Family Size: This is an important factor in calculating financial aid. It is NOT about who you support financially, and NOT about who lives with you. For a dependent student, the parents’ household size will include the student, parents, and the parents’ other children.
- Federal Pell Grant: Designed to assist students from low-income households, the Pell Grant is the largest federal grant program offered to undergraduate students. To qualify for a Pell Grant, a student must demonstrate financial need by completing and submitting the FAFSA. A great deal of focus is being placed on increasing the size of Pell Grants, so it will definitely be worthwhile to complete the FAFSA this year.
- Federal Student Aid: In addition to state aid and the money that colleges make available to students in the form of grants and scholarships, federal student aid represents a major portion of each student’s financial aid package. This aid from the federal government comes in the form of grants, loans, and/or work-study to assist students with college or career school. Students have to complete the FAFSA to apply for this aid.
- Federal Supplemental Educational Opportunity Grant (FSEOG): This is a grant that is awarded to undergraduate students who demonstrates exceptional financial need to help pay for their education. Awards can range from $100–$4000 and do not need to be repaid.
- Federal Work-Study: This program provides part-time jobs for undergraduate and graduate students with financial need. Students are awarded work-study by the school’s financial aid office and need to complete the FAFSA to confirm eligibility.
- FSA ID: This ID consists of a username and password which provides access to the U.S. Department of Education’s online systems. It can also serve as a legal signature when completing electronic documents. Both student and parent must have an FSA ID. They can be applied for at any time.
- Grants: A grant is a monetary gift for people pursuing higher education. It is often based on financial need and does not need to be repaid unless the student fails to meet eligibility criteria.
- Student Loan: A student loan is money that is borrowed from the federal government or a private source like a bank or financial institution for educational expenses. Loans must be paid back with interest.
- Merit–Based Aid: This type of financial aid is based on a student’s skill or ability. For example, a merit-based scholarship might be awarded based on a student’s high grades.
- Need–Based Aid: This is financial aid that students can receive if you have financial need and meet other eligibility criteria. You can’t receive more need-based aid than the amount of your financial need.
As the summer progresses, I will introduce and explain more about the financial aid process. Remember that CFAA helps with every step, from completing the FAFSA and completing the CSS Profile to comparing financial aid offers and understanding student loan options. Rising seniors can set a CFAA new client free strategy session or a 15 Minute Power Chat to learn about finding ways to pay for college. To get the latest financial aid information and college application to-do lists, look for my bi-weekly JustAskJodi emails and check out my monthly CFAA e-newsletter.