How does financial aid work? The objective of federal financial aid is to supply the difference between the cost of college education and the payment capacity of American families.
The U.S. education department has established Federal Student Aid which is acknowledged as the biggest provider of grants for students in the entire country. It administers financial aid programs for students as sanctioned by Title IV provisions of the Higher Education Act of 1965. Said programs make available loans, grants and finances for work studies to deserving students.
The Federal Application for Student Aid (FAFSA) is considered the principal form which must be accomplished to be eligible for majority of student financial aid services. However, the process is fairly complicated and requires more information about family assets and earnings compared to the federal income tax form. The education department will inform you the amount that the federal government expects your family to contribute for college education. Meanwhile, the school sends a so-called awards letter providing details regarding the categories and amounts of financial aid package that you can avail of. The problem is academic institutions do not send these letters until several months before the school opening making it difficult for you to assess the affordability of each university or college.
The financial aid office takes away your Expected Family Contribution from the school’s published cost of attendance. This is the procedure to find out your financial requirements. Government evaluates current assets, income during the previous year and household size in calculating the EFC. FAFSA applications can be submitted as early as January 1st before the academic year that you will start college studies. Keep in mind that there is intense competition for college financial aid so you need to provide accurate information. This will give you more chances of being considered for any scholarship or loan package.
State Assistance Programs
Financial aid packages offered by state governments have varying deadlines. Students are considered for state grants upon submission of the FAFSA and Student Aid Report (SAR) to schools within a respective state. Other states have different applications so it is important to consult the financial aid office where you intend to enroll. Majority of state programs are based on achievement, needs and individual features which identify qualifications. There are higher education grants, tuition grants, talent incentive program, handicapped student grants, and college scholarships for women.
The Institutions of Higher Education also give out grants which give out assistance similar to the criteria imposed by the federal government. Certain institutional grants are based strictly on student needs while others are associated with academic performance. Merit awards are classified as school contributions which reward academic accomplishments similar to getting financial aid. Eligibility is open to those with significant academic accomplishments regardless of financial capabilities. Grants for colleges can be compared to scholarships since these extend financial aid which does not have to be reimbursed. School expenses covered by grants may include tuition, books, student housing and costs related to post-secondary education.