The truth about college education is that it can be very expensive except if you enroll in a public institution or be eligible for college financial aid.
What is the status of financial assistance for students in the country? Look at the following statistics:
- The amount of financial aid given to students from 2007 to 2008 was estimated at $9,100.
- The cost of educational assistance from 2010 to 2011 was $12,400 with $6,500 not having to be paid back as part of arrangements.
- There are approximately 1.5 million students who fail to get the Pell grant because of their incapability to fill out applications for Free Application for Federal Student Aid (FAFSA).
Financial aid services have developed rapidly over the years. Parents and students must know how the system works to get the assistance that students deserve.
Fundamental Rules in Financial Aid
College education is not a right of citizens as compared to high school. The government does assure any person the privilege of cheap education. However, financial assistance for college students is made available for those who are really qualified but lack the resources to finish their studies. The idea is not to help people spend less money but make it more affordable for them. When you sign up for financial aid, it means that the help you get will merely complement personal funds.
Private and public schools implement separate prescriptions to determine the amount of money that you can afford to pay for tuition and other fees. Public colleges and universities as well as a few private institutions have adopted the Federal Methodology. It is a formula coming from the U.S. Department of Education to compute the Expected Family Contribution or EFC. Said methodology includes the family’s income and assets but does not take into account retirement and equity. This is intended for a supposed Federal Pell Grant, directly subsidized loans, campus-based programs, and Federal–subsidized Stafford. Applicants are required to accomplish the FAFSA and provide all information being required. The information will be the basis for calculations.
On the other hand, privately-owned schools use the Institutional Method. Students are asked to fill out both the PROFILE and FAFSA forms. You are obliged to provide more information and school administrators are more interested in real estate equity and retirement accounts. The process is more stringent but ironically, computations often reveal a smaller amount financial need in terms of college financial aid.
Importance of Expected Family Contribution
The EFC is an essential factor in the financial aid system of the United States. In essence, students will only be qualified for need aid such as grants, student loans, work studies, and subsidies if your contribution is less than attendance cost. Apply for any aid way ahead before you begin college. Universities may consider a student for the Pell Grant if the EFC is quite low. It is not necessary to pay back this grant. The student, who receives a low Expected Family Contribution rating, can be awarded funded loans with fixed interest charges that do not amass interest while you are still in college. However, this must be paid back right after your graduation.