Their interest rates are often higher, as well. Borrowing less now means owing less later, when you graduate and want to save for things such as a vacation, a house or retirement. How financial aid is determined. What is the Expected Family Contribution?
Colleges give need-based aid first. Colleges offer loans to fill payment gaps. It also depends on the cost of attendance COA and how much institutional aid a school offers. If the cost of attendance is higher at a particular school, you may qualify for more aid. Some institutions also provide more funding for low- and middle-income students than others. Generally speaking, low-income families will qualify for the maximum amount of federal aid available through grants, federal work-study, and direct unsubsidized loans.
Aid awards will vary for middle- and high-income families based on factors such as how many family members are enrolled in college, what assets a family has, and the cost of attendance for a student's chosen university.
These calculations hinge on many different factors, which makes estimating financial aid a complicated process. Because most students are eligible for some form of federal assistance and additional state and institutional aid is available, all students should consider completing a FAFSA.
Students can use the FAFSA4caster tool to get an estimate for how much federal financial aid they'll qualify for. When using this tool, it's important to note that this is an estimate and your aid eligibility could be affected by minor differences in your information.
The FAFSA has specific requirements for who is included in your household size and asks for tax information from two years prior. This tool also does not estimate state or school aid you may be eligible for, which often makes a big difference in how much funding students receive. If you're an independent student, you may be eligible for more financial aid. Independent students qualify for more unsubsidized Stafford loan funding per year and receive the Pell Grant more often than dependent students.
If you're considered independent for the FAFSA, you may be able to appeal your financial aid package due to additional costs and responsibilities that other college students may not have, such as childcare. Talk to your financial aid office to explain your circumstances in more detail and find out if you qualify for more aid. The major difference between the dependent and independent student classification on the FAFSA is that, as a dependent student, your parents' income and assets are factored into how much aid you get.
As an independent student, you only include information about your household income, which includes you and your spouse if you're married. So in thinking about how you're going to pay for it, the challenge is figuring out how much things cost.
Fortunately, by federal statute, universities, no matter if it's residential or online, are required to provide the cost of attendance. The mechanisms for applying for financial aid should also be clearly displayed on the university's website to help you kind of navigate your options. Yes, most accredited online schools that offer two- and four-year degrees do accept the FAFSA, and online students are eligible based on the same criteria as their on-campus counterparts.
The process for applying for financial aid as an online student is the same as it is for students who attend on campus. Federal and state financial aid through the FAFSA will cover online classes, but some institutional grants or scholarships may be only available to campus-based students. Some schools also have scholarships and grants specifically for online or distance learners. If you plan to attend college online and believe you'll need financial aid, start by checking the school's website for federal aid information to confirm the school accepts the FAFSA.
If the answer is not readily available there, contact the school you're planning to attend to ask whether the school accepts the FAFSA. Department of Education's Database of Accredited Postsecondary Institutions and Programs to see if your intended school is listed.
One of the most common issues students face is accidentally answering questions wrong because they aren't aware of the specific definitions on the FAFSA for things like who to include in the household size. Make sure to check these to avoid common errors that could delay your financial aid award. The Federal Student Aid office help center also allows students to type in their questions and find answers on the website.
You can add or remove colleges, change your email or address, and correct any other issues. The only thing you can't change is your Social Security number. If you have problems with your FSA ID, you can select "forgot username" or "forgot password" to reset either of these. If you still have difficulties accessing your account, you should call the FSA helpline to get them resolved. Students can learn more at getfafsahelp. Completing the FAFSA is one of the biggest and most exciting steps students take towards making their college plans a reality.
While it feels good to be able to put the paperwork behind you, you might be wondering what to expect next. After you complete the application, it goes to the U. Department of Education for processing. If you submit online, it should be processed within three to five days. If you mailed in a physical copy, it should be processed within days. You can check the status of your application by logging into fafsa.
If you submitted online, the status of your application will be available right away. If you mailed in a paper copy, the status should be available online around days after you mailed it. You can check the status to see if your application is still processing, has been processed, is missing signatures, or if there are any other issues that need attention. Check this to make sure the information you included in your application is accurate.
Some students may be selected for verification, which requires the submission of additional documents to the college to show the information provided on the FAFSA is accurate.
Your SAR may say you've been selected, or your school's financial aid office could contact you. This happens less frequently for students who use the IRS data retrieval tool to input their information. If you're selected for verification, it's best to get the required paperwork in as soon as possible.
The process can take anywhere from a few days to four weeks, depending on the student and school. Don't feel like it's saying you don't belong or you're not allowed to go to school. Ask for some clarification from your financial aid office, maybe your high school counselor, maybe if you have an older sibling or cousin who's gone through college, ask them about it.
Asking questions is the best thing you can do. If you apply and are accepted to a school, the financial aid office at that school will determine how much aid you can receive based on your EFC and the cost of attendance COA , a number calculated by the school that includes tuition and fees, room and board, and other educational expenses.
They'll award you any federal, state, and school aid that you qualify for, including work-study and federal loan offers. You should review your aid award and make sure to ask any questions you may have.
Some aid packages might be confusing because gift aid and loans are both included in your aid award letter. Ensure you know exactly how much gift aid you are offered, how much it will cost you to attend that college, and how much funding you'll need to borrow in student or private loans to make up the difference.
If you are considering multiple schools, you can weigh each financial aid package's pros and cons to help determine which college is the best choice for you. You will need to accept or decline your financial aid offers by a certain date set by your school. You must re-submit the FAFSA each year to get financial aid for the next year, and your award may change based on factors such as your age, income, or your year in school.
FAFSA renewal is typically a much easier process than the initial application because the form is pre-filled with some information from the previous year. Most students just need to update income and tax information and anything else that has changed.
Many families have gone through significant financial changes since the start of the COVID pandemic. Higher education experts are also concerned by the decrease in students completing the FAFSA this year, which are often seen as an indicator of future enrollment rates. But the need analysis formulas assume that the child contributes a much greater portion of his or her assets and income than the parents, with the result that such tax-sheltering strategies often significantly reduce eligibility for financial aid.
The College Cost Reduction and Access Act of changed the treatment of custodial versions of qualified tuition accounts, like college savings plans, prepaid tuition plans and Coverdell education savings accounts.
Specifically, for a custodial account to be counted as a parent asset instead of a student asset, all of the following must be true:. Before filing the FAFSA, the parent should convert the asset by liquidating it, as contributions must be in cash into the custodial version of a college savings plan, prepaid tuition plan, or Coverdell ESA. The money will then be treated as a parent asset on the FAFSA even though it is still owned by the student.
Many need analysis formulas divide the parent contribution among all children in college. Since there has been a history of fraud in this area, you will have to convince the financial aid administrator that you are genuine. The student is also counted, regardless of where the student gets his or her support.
The requirements for a student to be considered independent are rather strict. Either of these will qualify the student as independent for the awarding of federal funds. It will be broken down into three categories: free money you don't have to pay back, earned money via work-study or non-work study , and borrowed money either from federal or private student loans.
If you feel your federal financial aid award is inadequate, you can request a professional judgment review by the awarding school. However, you will need a legitimate reason to convince the school your award is insufficient. One way would be to demonstrate that your family's financial situation has changed for the worse.
If that's the case, the school will typically ask you to submit a letter summarizing the new circumstances. This could include a divorce, a death in the family, a job loss, or sudden high medical costs. If another school has offered you a larger award, you could try contacting the school offering the lower award and ask if they will match the larger offer.
Historically, many colleges and universities have been criticized for encouraging college candidates to commit early with the understanding they could not switch colleges, even though the understanding was not legally binding. For the candidates, early commitment could mean passing up a better financial aid package from another school. Now, however, students will have recourse.
Action taken in Sept. Furthermore, NACAC members are now allowed to encourage enrolled students to transfer to a school with a better financial aid package, offer perks such as special scholarships and priority course selection for early enrollees , and recruit students beyond the traditional May 1 deadline, giving those students more time to choose the best financial aid package.
The NACAC has said it will follow the restrictions outlined in the consent decree, although it believes the deleted provisions of the CEPP did provide substantial aid and protection to students.
Understanding how this process works is the best way to establish as much control and choice over financing college as possible.
Financial aid in the form of a loan is to be paid back. If it is a federal loan, repayment begins after a student has graduated, with a grace period of six months after finishing school. On the other hand, privately-issued loans may require repayment during the school year.
Other forms of financial aid, such as scholarships and grants do not need to be paid back. Grants, scholarships, loans, and work-study are four primary forms of financial aid. Students may be eligible for more than one type of financial aid, based on their financial need and academic, athletic, or artistic achievement.
FAFSA aid is calculated based on a number of factors. Next, to identify non-need-based aid, any financial aid already received is subtracted from the COA. Remember that planning can never start too early. One of the basics to know is that aid can come from a variety of sources.
Be sure to look at the College Preparation Checklist published by the U. This will guide you from wherever you are—elementary, middle school, high school, or young adult—to college with a plan to pay for your education. Sallie Mae. Federal Student Aid. College Board.
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