Now that you’ve submitted the Free Application for Federal Student Aid (FAFSA) that you learned about in the first blog in this series, it’s time to explore the next steps in the process and learn how colleges award financial aid.

Expect a Student Aid Report

Once your FAFSA has been submitted it goes to the federal processing center. They check over your personal information to make sure it matches what they have on file, they “crunch” the numbers that were entered into the FAFSA, and they pass the results on to the college(s) that you listed on your FAFSA.

Within 3-5 days you will receive an e-mail from Federal Student Aid. This e-mail confirms that your information was passed on to the college(s), gives you a link to your Student Aid Report (SAR) and indicates if you were selected for verification.

Check over your SAR to make sure the information you provided is correct. Some scholarships will need a copy of the SAR so hang onto that e-mail for future reference.

The Cost of Education

Each year, colleges determine what it will cost a student to attend their institution for an entire academic year, otherwise known as their Cost of Education (COE). The COE includes direct costs; tuition/fees, textbooks/supplies as well as room/board – if you plan to live on campus. It also includes an estimate for personal/transportation which are indirect costs.  Personal may include things like food, entertainment, and toiletries – while transportation might be fuel, vehicle maintenance and bus fare.

What about the EFC?

The EFC, or Expected Family Contribution, is determined by parent and student income and asset information; as well as parent’s age, household size and number in college.  The EFC is based on the results of the FAFSA and it helps colleges determine how much Federal Aid you are eligible to receive.

How the calculation works

Colleges use the following formula to award financial aid:

 Cost of Education

-Expected Family Contribution

 Financial Need

Your Financial Need is the amount of financial aid each college is going to try to award you. The greater your Financial Need, the greater chance you have of receiving aid that doesn’t have to be repaid.  If your Financial Need is low, you might only be offered loans. Financial Need will be unique to each student as there are many factors that affect the FAFSA results.

Your Financial Aid Package

You will receive an award letter from each of the colleges listed on your FAFSA, if you were accepted for admission. If more than one college was listed, compare your award letters (or financial aid packages) to determine which is the best offer and which college you can afford to attend.

When reviewing your award letters, you may see offers for scholarships, grants, work-study, and student loans. Once you determine what college you want to attend, accept or reject each type of aid offered to you by that college, and decline aid offered by colleges that you do not plan to attend.

Here’s a recap of what you learned in the second blog in the series: Types of Financial Aid

• Scholarships and grants do not have to be repaid, that’s why they are considered “gift aid”. If you are offered gift aid, you’ll definitely want to accept it! Continue to apply for as many scholarships as you can. This Scholarship Tips sheet gives great information on applying for scholarships.

• Work-study is the opportunity for students (who show financial need) to have a part-time job on campus while attending college. Work-study dollars can be used for educational expenses or simply for extra spending money.  However, the funds are not available until you work the hours, so don’t count on this money to help pay for your first semester expenses. 

• Student loans are money that you borrow to help pay your college expenses. Borrow only what you need as they will eventually have to be repaid. Subsidized loans are interest free while you’re enrolled in college, and unsubsidized loans begin accruing interest as soon as the loan is applied to your account. Check out this loan chart for more information.

If the financial aid package doesn’t cover all of your college expenses, consider other options. Talk to your parents about borrowing a Parent PLUS loan, research alternative loans, set up a payment plan with the college, or perhaps begin at a college that is more affordable and transfer after you complete your general education classes…if your career path requires a Bachelor’s degree.

If you have questions or need help understanding your financial aid package, contact the EducationQuest office nearest you to speak with a College Planning Specialist.