By: Emily Ferreira, Managing EditorCollege financial aid can be tricky. There are lots of options for students and families in need of student financial aid to attend college including both merit-based and need-based college financial aid. Need-based student financial aid is awarded on the basis of individual financial need of the student. Need-based college financial aid can include several different programs such as grants, scholarships, a Federal PLUS student loan, Federal Perkins Loans, Federal Pell grants and a Federal Stafford student loan (subsidized and unsubsidized). Participating schools distribute a Federal Perkins student loan, with annual appropriations from the U.S. Department of Education. College financial aid in the form of a Federal Stafford student loan and a Federal PLUS student loan is offered by participating lenders under the FFELP (Federal Family Education Loan Program).
The process of student financial aid application and qualification can be complicated. Initially, a student must fill out the FAFSA (Free Application for Federal Student Aid). A student must complete the FAFSA each year they wish to be considered for student financial aid. This application uses calculation, taking into account income and assets to determine a student’s EFC (Expected Family Contribution) toward their college education for that year. Colleges then use this EFC to decide what types of college financial aid a student is eligible to receive. College financial aid administrators determine an applicant’s need for federal college financial aid from the U.S. Department of Education and other non-federal sources of assistance by subtracting the EFC from the student’s COA (Cost of Attendance). However, if you're unable to contribute the entire cost of college, student loan financial aid is available to bridge the gap. That's how the college financial aid system works. The difference between the total cost and your EFC is considered your "financial need" and the amount of college financial aid you're eligible to receive.
The COA varies widely from school to school. COA includes tuition and fees, in addition to housing, food, transportation, books and supplies, personal expenses and other costs. Your COA may also be affected by other factors, such as whether you live on- or off-campus. College financial aid administrators use the information from the FAFSA, including the EFC, to develop a financial aid package. This package specifies the types and amounts of assistance, including non-federal college financial aid, a student will receive to cover his or her education-related expenses up to COA. However, because funds are limited, the amount awarded to a student may fall short of the amount of aid for which the student is eligible.
In addition to federally funded need-based college financial aid, student loan programs and student loan financial aid, state governments also typically provide some types of need and non-need-based student loan financial aid. These usually consist of grants, loans, work-study programs, tuition waivers and scholarships. Individual colleges and universities may provide college financial aid grants and need and merit-based scholarships. Students requiring college financial aid beyond what is offered by their college or university may consider private education student loan financial aid. These are available from most large lending institutions. Usually, student loan financial aid obtained through the federal government has lower interest rates than private education loans. Institutions may also offer their own student financial aid, in the form of need or merit-based aid, as well as endowed scholarships. Some schools may only require a FAFSA in these cases; some may also require an additional need-based analysis document, such as the CSS/Profile, to apply for these funds. College financial aid doesn’t have to be stressful, just do some research and find out what resources are available to you to relieve the burden of the cost of attendance!
