Financial Aid Steps
steps in the financial aid process
The financial aid process begins with the filing of the FAFSA form. Colleges use the FAFSA form to determine how much eligible aid can be awarded to the student. Understand how the process works
Below are eight (8) summary financial aid steps
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financial aid steps
Step1: Make Sure You're Eligible
To receive financial aid assistance, you must:
- display a need for financial aid (except for unsubsidized Stafford and PLUS loans).
- complete high school and have been awarded a high school diploma or a General Education Development (GED) Certificate.
- pass a college entrance exam approved by the U.S. Department of Education, and/or meet other standards your state may establish.
- be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program.
- be a U.S. citizen or eligible non-citizen
- have a valid Social Security number (unless you're from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau)
- make satisfactory academic progress.
- sign a statement on the Free Application for Federal Student Aid (FAFSA) certifying that you will use federal student aid only for educational purposes
- sign a statement on the FAFSA certifying that you are not in default on a federal student loan and that you do not owe money back on a federal student grant.
- register with the Selective Service (for young men age 18 and over)
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financial aid steps
Step2: Determine Aid Status
Different eligibility loan amounts will be awarded for dependent and independent students:
- students who have access to parental support are classified as dependent students
- the award amounts for dependent students are generally lower than the amounts for independent students
- dependent students and their parents must report respectively their income and assets on the FAFSA form
Students who display at least one of the following requirements are classified as independent students:
- you were at least 24 years of age on January 1 of the academic year you begin school
- you are married on the day you apply (even if you are separated but not divorced)
- you will be enrolled in a graduate or professional program (beyond the bachelor's degree) at the beginning of the academic year
- you have legal dependents other than a spouse who receive more than half their support from you
- you are an orphan or ward of the court (or were a ward of the court until age 18)
- you are veteran of the U.S. Armed Forces ("veteran" includes a student who attended a U.S. military academy who was released under a condition other than dishonorable)
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financial aid steps
Step3: Understand EFC
EFC is the Expected Family Contribution for higher education. In other words, financial aid is awarded based on a formula that calculates the total cost of attending school and the expected family contribution to that cost.
Needs-based financial aid programs are awarded to students and families who display a financial need.
The government calculates financial need based upon the following formula:
+(add) | Total cost to attend college (tuition, books, housing, etc.) |
-(minus) | The "Expected Family Contribution (EFC) " towards the cost of education for 1 year |
=(equals) | Eligible Financial Need |
To be considered for needs based financial aid, both parent and student must submit the FAFSA form
- the FAFSA form is completed by both parent and student for dependent status; and by the student and spouse for independent status.
- The FAFSA form collects information about your financial position and compares it with your filed IRS forms
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financial aid steps
Step4: What Makes Up Costs?
Schools determine costs based upon average budgets that students spend for the following categories:
- School Tuition and Fees:
cost to attend class instruction and the use of facilities, labs, libraries and all other related services - Books and Supplies:
the estimated amount for books and supplies the student will be required to purchase for classroom instruction - Laptop Computer:
may include a desktop computer along with a printer and other necessary electronics - Room and Board:
the estimated cost for housing and food - Transportation:
the estimated cost for 2-3 round trips from your home to school - Personal Living Expenses:
the estimated cost for clothing, grooming supplies, laundry and limited entertainment - Other Personal Costs:
personal expenses that are specific to the student such as disability expenses, dependent care, loan fees, etc. - Miscellaneous:
any other expenses that you can identify with your school's Financial Aid Office
financial aid steps
Step5: Submit FAFSA
The Free Application for Federal Student Aid (FAFSA) is the first form you will need to file to begin the financial need process for most federal student aid programs.
The FAFSA form will be required for all Federal Student Loans and many scholarships. It is used by colleges to determine your financial aid eligibility.
You may submit the FAFSA form anytime after January 1 in the year you intend to begin school;
- for example, if you plan to attend school in Fall 2011, you must submit your FAFSA form anytime after January 1, 2011 to about the end of July in order to qualify for financial aid for the academic year coming up
- You should submit your FAFSA form early to meet college financial aid deadlines
- The FAFSA form must be completed and renewed each year while you attend school
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financial aid steps
Step6: Review the SAR
The Student Aid Report (SAR) is a summary report of your FAFSA form submission. After submission and completion of the FAFSA form, the federal government will process your application and produce a Student Aid Report (SAR).
The SAR will report the information from the FAFSA form and calculate your Expected Family Contribution (EFC). The EFC will appear near the top section of the report.
The SAR will be sent to the schools you selected when you submitted the FAFSA form. Schools will use the SAR to determine the eligible amount of college aid.
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financial aid steps
Step7: Analyze Award Letter
The Financial Award Letter is processed by the college or university that you will be attending.
The school's financial aid office will process the SAR and determine the total financial aid you can receive through federal, state, and college-based programs.
The school will then send you the Financial Award Letter (Package) usually upon acceptance of your college admission — usually around April to May. You can either accept or reject the award.
The Financial Award Letter(Package) will list the type of financial aid that may include:
- grants and scholarships:
includes private and government grants and all scholarships - student loans:
Perkins, subsidized and unsubsidized Stafford loans, PLUS loans, state loan programs, other - work-study programs:
different work programs through the school or in the community.
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financial aid steps
Step8: Review Aid Options
Your financial aid options include grants, scholarships, work-study, loans, state aid, community service, and other federal and private aid.
- View government aid options:
view government aid - View private aid options:
view private aid - View other aid options:
view other aid
Helpful Tools
Some helpful tools for making decisions:
(from our companion site: www.SayStudent.com)