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Things you need to know about financial aid
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Every year parents and students are bombarded with solicitations from universities, junior colleges, offers for FAFSA help or seminars, and a host of other opportunities to save money going to college.
This guide is a simple breakdown of information regarding the most popular questions and types of financial aid that you or your student will encounter their senior year and first year of college.
How Financial Aid is determined by the FAFSA
What are all these abbreviations I read about?
EFC (Expected Family Contribution) - Is a measure of your family’s financial strength and is calculated according to a formula established by law. There are many factors that are calculated into the formula such as your family size and the number of family members who will attend college during the next year, and if any parent/guardian is on disability, social security, or other government assistance programs.
Schools use the EFC to determine your federal student aid eligibility and financial aid award package. It is not the amount of money that you or your parents are responsible for and it is not the amount of aid you will receive.
CoA (Cost of Attendance) – This is the schools estimate of what it costs for a full time student, living in the dorm, to attend the university for one year. This number is usually inflated over the actual cost of attendance since they factor in things like trips home, miscellaneous expenses and other items that your student may or may not need.
FAFSA (Free Application for Federal Student Aid) – This is the form that every student must fill out in the spring of their senior year of high school, preferably in February. This is the form that gives the government, schools, and some scholarship foundations the necessary information to award your student money for school. It is important to note that your child will not receive any government aid without a FAFSA being filed.
This is a very invasive document and will require the following documents to be completed:
- The previous years tax returns (for a 2010 Fall FAFSA the 2009 Tax Returns will be used)
- W-2’s for everyone who worked in the house
- The student’s tax return if he/she filed one
- Social Security numbers for everyone living with the student
- Student’s Driver License
- Current amount of money in checking, savings, and other accounts
- Current value of your assets apart from your main residence (rent houses, motor homes, etc.)
Coincidentally, most of this information can be found on your tax return.
TAFSA (Texas Application for Federal Student Aid) – This form is only for students who are not documented and living in Texas.
This form must be filled out in paper form and requires the same information as the FAFSA.
To qualify for this type of aid your student must have:
- Resided with a parent or guardian while attending high school in Texas
- Graduated from a public or private high school in Texas
- Resided in Texas for the three years leading to graduation
- Provide their institutions a signed affidavit indicating intent to apply for permanent residence status as soon as able to do so.
Your student will fill out either the FAFSA or the TAFSA, but never both.
Who determines the amount of financial aid my child receives?
The Federal government and the University/College your student is attending
How do the government and the school determine how much money my child receives?
When you and your student fill out the FAFSA in February you will be given an EFC.
Your EFC is then plugged into a formula that looks like this:
CoA – EFC = Financial Need
This formula takes the estimated cost of attendance to a university and subtracts the EFC from that amount to determine how much financial aid your student will need to attend school at the university.
How can you tell what is “free” and what is a “loan”?
Scholarships and Grants are forms of free financial aid. This money does not have to be paid back to the government or college.
There are different kinds of scholarships and grants:
National Scholarships: These scholarships are open to anyone in the world who meets the criteria. There are many websites that host national scholarship competitions such as http://www.fastweb.com or http://www.tuitionfundingsources.com that will require your student to create an account with the website for a potential matching of scholarships to the student. The students are notified by email of possible matches.
Local Scholarships: These scholarships are only open to people who live within a certain area or attend a certain school. The criterion for these scholarships is very specific. Check the blue sidebar on this page for information on local scholarships specific to your high school. Your high school counselor and your COOL counselor will also be able to direct you. The Community Foundation of Abilene, http://www.cfabilene.org, hosts many local scholarship opportunities as well for your student.
Grants:
Pell Grant: This grant is awarded based on information provided in the FAFSA. The maximum Pell Grant award for the 2009-10 award year, from July 1, 2009 to June 30, 2010, is $5,350. Grants do not have to be paid back.
Academic Competitive Grant (ACG): This grant is awarded to students who graduate on the distinguished plan and are Pell grant eligible. This grant will award $750.00 the first year and $1300.00 for the second year of study. The total combined amount of the Pell and ACG can not exceed the cost of attendance (CoA) of the university.
Tuition Equalization Grant (TEG): This grant is students attending a private university in the state of Texas. The student must be Pell eligible, not be a Christian ministries or Church music major, and not have a family income of $95,000 or higher.
TEXAS Grant: This is a grant for students who completed advanced curriculum programs for their high school diplomas. Students must have an EFC of $4000.00 or less.
Loans are a type of financial aid that must be paid back to the government.
There are different kinds of loans:
Subsidized Federal Stafford Loan: This type of loan is a need-based loan and will offer a very low interest rate to the student. This is a subsidized loan which means that the interest will be paid by the government while the student is in school or in a grace period of no more than 6 months after the student graduates.
Unsubsidized Federal Stafford Loan: This type of loan is not need-based and anyone can qualify to get one. This should only be used in the event that scholarships, grants, and a subsidized Stafford loan do not cover the cost of tuition, books, and residence fees for the student.
Plus Loan, “Parent Plus Loan”, “PPL”: This is a loan that a parent can take out to help cover the cost of what a normal financial aid loan will not. This loan has a variable interest rate and is based off of the credit score of the parent requesting the loan. Once the load has been disbursed, the parent has 60-90 days to begin repayment. This means that if the parent receives loan approval in June then the repayment will begin in July of that same year.
Federal Perkins Loans: These loans are provided to the most “needy” of the need-based aid group. Typically these loans have a very low interest rate and a longer grace period of repayment. These loans are mixed with the college’s available funds so most colleges have a very limited supply of these types of loans. These loans can be forgiven if the student meets the criteria for the loan forgiveness program through the U.S. Department of Education.
The scholarship resource guide listed below is provided by U.S. Congresswoman Lucille Roybal-Allard, Congressional District 34-California. Please feel free to download this valuable resource and save it to your computer for future reference.
Paying for College Student Resource Guide
