Financial Aid for College and Other Postsecondary Education
December 27th, 2009 by adminThe cost of postsecondary education in the U.S. has increased in recent years, but financial aid, which may be in the form of grants (no repayment needed), loans, and/or work study programs, is widely available to help families meet these expenses.
Most aid is limited to family financial need as determined by standard formulas. Students interested in receiving aid are advised to apply to university regardless of their ability to pay. Financial aid personnel at each school can provide information about programs available to students, steps to apply for them, and deadlines, all of which may vary.
All applicants for federal aid must file a Free Application for Federal Student Aid (FAFSA), generally as soon as possible after Jan. 1 for the academic year starting the following September. Figures provided should agree with federal income tax forms filed for the previous year. Other possible sources of aid include state governments, employers and unions, civic organizations, and the institutions themselves. There are also special federal programs that pay for postsecondary education in return for service: AmeriCorps (phone: 1-800-942-2677) and ROTC (phone: 1-800-USA-ROTC). Additional forms and certain fees may be required if a student is to be considered for institutional aid. Aid must be reapplied for annually.
A federal formula, based on information provided on the FAFSA, takes into account such factors as family income in the preceding calendar year, parental and student assets (excluding the parents’ home or farm), length of time to parents’ retirement, and unusual expenses (such as very high medical expenses).
The resulting Expected Family Contribution, or EFC (which is divided among the family members excluding parents in college), is subtracted from the total cost of attendance for each person (including tuition and fee charges, room and board or allowance for living costs, books and supplies, transportation to and from school, and other miscellaneous costs). The difference determines financial need, and thus the maximum federal aid for which the family may be eligible. (Some institutions use a separate formula for need based institutional aid.) Some schools guarantee to meet the full financial need of each admitted student; however, most try to do so and may fall short, depending on the availability of funds. Outside scholarships (even non need based) are taken into account in determining the amount of aid eligibility for federal, institutional, and state financial aid programs.
The aid package offered by each school may include one or more of the following resources: Federal Pell Grants, for those with greatest financial need; Federal Supplemental Educational Opportunity Grants, for those with great financial need who are also eligible for Pell Grants; grants from the school; Federal Work Study or other work programs; low interest Perkins loans; and subsidized and unsubsidized Stafford loans. Parents of undergraduates may also apply for a Federal PLUS loan. For unsubsidized Stafford loans and all PLUS loans to parents, need is not a requirement, but students and parents must still complete the FAFSA before eligibility for unsubsidized Stafford loans is determined.
Loans have varying interest rates and other requirements. Repayment of Perkins and Stafford loans does not begin until after graduation; deferments are available under certain circumstances. For PLUS loans, parents must pass a credit check and begin repayment of both principal and interest while the student is still in school.