Financial aid guide for students and parents

Going to college or higher education is not only about better job prospects and salary package but it is also beneficial for a person from many other viewpoints. It serves as a gateway to more knowledge, better options and more unexplored opportunities. Importance of education after high school is quite evident yet the heavy price tags attached make it less approachable. To ensure that high costs do not act as discouraging factor, various forms of financial assistance for students are available. Financial aid is one of the forms of financial assistance provided by federal government to students. It assures students that their education costs and related expenses will be addressed and encourages them to pursue further education.

Financial aid available to a student is not uniform and very few colleges provide financial aid that is sufficient to cover all expenses. Financial aid is dependent on several factors which also increase or decrease the eligibility of a student to opt for financial aid. For a U.S citizen, the basic eligibility criteria is that the student must submit Free Application for Federal Student Aid (FAFSA). Other factors that affect the determination of financial aid include–

• Financial Status of the Family – Amount of aid is dependent on student’s ‘Need’ which is further dependent on the financial situation of the family. Change in the family income results in change in eligibility for financial aid. It also affects in the calculation of Expected Family Contribution (EFC). Amount of financial aid also changes if the parents are divorced and some colleges consider incomes of both original and step parents to determine the aid.

• Load of Class Work – Eligibility of financial aid also varies with an increase in decrease in number of credits per term.

• Calculation of ‘Cost’ – Calculation of cost differs among colleges. Some colleges consider all expenses including miscellaneous expenses while calculating costs while some consider giving allowances for books and keep their cost low.

• Consideration of Home Equity – How a college considers home equity also affects the eligibility of financial aid. Some colleges consider equity of parents in their home as a resource which can be tapped for payment of college expenses while others do not consider equity as a resource.

• Cost of Attendance – Cost of attendance varies from college to college and is dependent on the type of course (undergraduate or graduate), type of lodging and other expenses.

• Expected Family Contribution (EFC) – Expected Family Contribution is calculated on basis of dependency status of the person, available income, sources of income and even assets of parents and students. It determines how much the applicant’s family is expected to contribute towards his education. Financial aid provided is usually the difference between COA and EFC.

• Meet-Full-Needs Deadline – Many colleges use this deadline as a reason for denying financial aid. Some meet the financial needs of only those students who have completed their application on time while some only provide aid to students who took an early admission or admission during the regular season.

There are variations in the type and amount of need provided to students in various colleges but a person cannot realize the benefits of financial aid unless he applies for it. So, though the process is cumbersome involving filling application forms, financial aid is indeed helpful in funding higher education.