The bottom line.
TYPES |
Types of Financial Aid
Financial aid is available publicly at all levels of government (federal, state and local) and privately through corporations, community groups and religious and civic organizations. Not only does financial aid come from many different sources, it comes with many different conditions. Aid can be merit-based (awarded based on your grades or certain achievements) or need-based (awarded based on you or your family's Expected Family Contribution, or EFC). Basic types of aid include scholarships and grants (which aren't repaid), work-study programs (where money is earned) and parent and student loans (which you repay at a later date). Explore this section further to learn more about the different types of aid available.
EFC |
EFC (Expected Family Contribution)
The Expected Family Contribution (EFC) is calculated to determine how much money you and your family will contribute each year to the cost of attending school. It also determines the types and amount of federal and state aid you qualify for. Simply put, your total school costs minus your EFC equals your financial need. Once your FAFSA application is processed, you (along with schools you listed on your form) will receive a Student Aid Report detailing your EFC. Your financial aid package will take shape based on the information you provide.
MYTHS
Myths About Financial Aid
MY PARENTS MAKE TOO MUCH TO QUALIFY FOR AID
The truth is, your family's expected contribution is figured using the same formula as everybody else's, regardless of income. The only way to find out what you'll be awarded is to complete your FAFSA form so that formula can be applied to your unique situation. It's all relative — any costs above a certain percentage of income may be eligible for financial assistance.
WE CAN'T AFFORD PRIVATE SCHOOL
The most important thing to remember during the search process is finding the right school — then think about how much it costs. Remember, private schools want to attract the same diverse and vibrant student body that every other school wants to attract, and they often offer more financial aid to make it possible. Don't let a school's reputation or private status automatically disqualify it from your list. If you like it and it's a good fit, there are ways to make it happen.
I DON'T GET GOOD ENOUGH GRADES
Not all financial aid is related to your report card. In fact, most federal student aid is based on financial need alone, not merit.
WE'RE NOT APPLYING FOR LOANS BECAUSE WE DON'T WANT TO BE STUCK WITH THEM
Just because you apply for a low-interest government loan and get it doesn't mean you are obligated to accept it. It makes sense to apply for all the aid you can, then compare your awards and accept only the loans you are willing and able to pay back. Carefully consider terms and conditions, and be aware of changing interest rates and possible penalties.
THERE WON'T BE ENOUGH MONEY OUT THERE FOR ME
There's nearly $150 billion currently available for students looking for financial assistance. While most of this aid is offered as loans instead of grants, interest rates are at record lows and new legislation has helped students consolidate their loans and defer interest payments until after graduation.
I WON'T BE A FULL-TIME STUDENT, SO I DON'T QUALIFY
There is plenty of financial aid available for part-time students. The best plan is to contact the schools you're interested in and ask for information about how part-time students can qualify.
