Understanding Financial Aid
February 16, 2015 governmentgrants.info Staff
The Financial Aid Process Made Simple
Federal financial aid is available to students and their families who qualify in order to offset the expense of obtaining a college education. However, the process of applying for and then receiving financial aid can be time-consuming and complex. Working with a trusted service that provides assistance with the entire process can help to eliminate unnecessary delays and potentially maximize the amount of funding that a student can receive.
The first step toward obtaining financial aid is to apply, and this is done by completing the FAFSA or Free Application For Federal Student Aid. Students or their parents will need to provide detailed financial information as well as indicating the degree program and school they will attend. Students also need to meet minimal requirements such as not having any drug-related convictions and possessing a high school diploma or GED certificate. Students must also be United States citizens in order to receive funding from the government.
The FAFSA is used to determine how much money a student or their family is expected to contribute to their education over the course of an academic year. This is called the EFC or Estimated Family Contribution. The financial aid department at the school will use this figure to determine the amount of aid that a student can obtain during the current or upcoming year. It is important to note that a good portion of financial aid funding is need-based and contingent upon how much money the student or their family earns.
Types of Aid Available
Qualifying students may receive low-interest loans, grants and work study opportunities. However, there are annual as well as aggregate limits that a student can receive. The Pell grant is the most common grant available, and it does not need to be repaid. Work study enables students to obtain part-time employment at their school that is subsidized by the government. Please note that students must make satisfactory academic progress, or SAP, in order to maintain eligibility. Students who fail to meet these requirements can lose funding and be forced to repay grant or work study funds.
Loans are generally available to all students, but how much a student can borrow per year is based on income as well as their grade level. Stafford loans are generally available to students who live on their own and are not claimed on their parent's tax return, and they do not involve credit checks. Plus loans are available to parents who support their children, but eligibility is based on family income.
It is important to know that schools set their own annual limits that are based on a number of factors, and these limits may be less than what the government allows. Geographical location, cost of tuition, housing and other expenses contribute to the annual Cost of Attendance, or COA that the school publishes. Students will only be able to obtain funding that equals or is less than the COA.
It is important that students are aware of deadlines established by their schools. Many schools receive a fixed amount of money from the government to distribute to students, and it is awarded on a first come, first serve basis. Deadlines also vary from school to school depending on how their financial aid department administers funds. Some schools take longer to process applications and disburse awards than others. It is not uncommon for students to be required to complete their applications as early as January for the upcoming school year that begins in the fall.
This is just a brief and general summary of the financial aid process, and it is important to understand that funding is made available on a case-by-case basis. Working with a trusted and experienced service can make the entire process easier to endure. Students can avoid time-consuming setbacks caused by errors or omissions, and focus on learning instead of worrying about the cumbersome process of obtaining funding from the government.