Handbook: Preparing Your Child for College

Eligibility For Financial Aid

To qualify for federal aid, you or your child must submit a financial aid application. Applications for financial aid request information about your family's income, savings, and assets, as well as information on the number of children in the family who are in college. You can get a copy of the federal financial aid form by calling the toll free number that was mentioned earlier:

1-800-4FED-AID. You may also fill out this form via the World Wide Web. Visit the Department's web site at: www.ed.gov and click on "Student Financial Assistance. "

To apply for other aid in addition to federal aid, you may need additional forms. High school guidance counselors can tell you more about applying for financial aid, including where to get forms you might need for state aid.

From information you report on the financial aid forms, your expected family contribution (EFC) is calculated. The EFC is the amount of money a student and his or her family are expected to contribute to the costs of attending college. Using the EFC and other information that you provide, each college to which you apply will determine your financial need. Financial need equals the cost of education minus the EFC and represents the maximum amount of need-based aid the student can receive. In addition, students can borrow money to cover the EFC. Because financial aid determinations consider both financial need and education costs, you should not rule out a school because you think it costs too much. In fact, with financial aid it may cost no more to attend an expensive institution than a cheaper one. Chart 8 below summarizes the calculation that is performed to determine financial need.

CHART 8
How Much Need-based Financial Aid Can My Child Get?
The amount of need-based financial aid a student qualifies for depends on his or her financial need. Financial need is equal to the cost of education (estimated costs for college attendance and basic living expenses) minus the expected family contribution (the amount a student's family is expected to pay, which varies according to the family's financial resources).

Cost of Education

Expected Family Contribution

Financial Need

Includes costs of
Tuition
Fees
Room
Board
Books
Supplies
Transportation
- Based on the financial resources of a student and his or her family = Students can receive up to this amount of needbased financial aid, such as Pell Grants and Stafford Loans.

To give you a better idea of how you can finance your child's college education, examples of two college students' financial aid packages are shown below.

Note that these financial aid packages are just examples of the kinds of packages that students with these profiles might receive if they attended the schools described below.

PROFILE 1-FIRST STUDENT

Family income: $20,000
Household size: 4
Number in college: 1
  2-year public 4-year public 4-year private
College Cost $6,400 $10,500 $22,500
Expected Family Contribution $0 $0 $0
   Parent $0 $0 $0
   Student $0 $0 $0
Pell Grant $3,000 $3,000 $3,000
SEOG $500 $800 $1,000
Federal Work Study $1,300 $1,300 $1,300
Perkins Loan $0 $0 $1,500
Stafford Loan $0 $2,625 $1,500
State Grant $1,100 $1,600 $1,600
Institutional Grant $500 $1,175 $11,475
Parent Loan $0 $0 $0

 

 

PROFILE 2-SECOND STUDENT

Family income: $40,000
Household size: 4
Number in college: 2
Student savings: $715
  2-year public 4-year public 4-year private
College Cost $6,400 $10,500 $22,500
Expected Family Contribution $1,727 $1,727 $1,727
   Parent $1,477 $1,477 $1,477
   Student $250 $250 $250
Pell Grant $1,273 $1,273 $1,273
SEOG $0 $0 $1,000
Federal Work Study $0 $1,300 $1,300
Perkins Loan $0 $1,500 $1,500
Stafford Loan $1,300 $2,625 $2,625
State Grant $1,100 $1,200 $1,600
Institutional Grant $1,000 $875 $6,475
Parent Loan $0 $0 $5,000

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