Financial Aid Application Process FAQs
Financial Aid Application Process FAQs
(FAQ = Frequently Asked Questions)
If you wish to be considered for any of the federal student aid programs, you must complete the FAFSA. The Federal programs include the following:
To receive aid from the federal programs, a student must:
If you are a FIRST TIME financial aid applicant, a FAFSA must be completed and sent to the processor. You cannot complete and send the FAFSA until after January 1st of the year for which fall term enrollment is planned. Allow approximately four weeks to have your FAFSA processed.
As early as possible, contact the financial aid office of each college you are considering attending and ask their application procedures and deadlines. Provide all information and forms by the deadlines the college specifies. If your application is late or incomplete, you may not be considered for all the aid programs available. Some colleges may require you to complete additional application forms in order to be considered for institutional (non-federal) aid. There may be fees associated with these special forms.
If you are a RENEWAL financial aid applicant, you will receive a renewal application from the U.S. Department of Education during November or December preceding the award year. Renewal applications are sent to the permanent home address supplied on the FAFSA.
It is important to note that all students must re-apply for financial aid each year.
If you think you will need help paying for college, you should apply. The calculation which determines eligibility for aid is complicated--there is no easy, straight forward "income cut-off" or other method to help you anticipate whether you'll be eligible--the only way to find out for sure is to apply.
On the application, information should be given for the parent you lived with the most in the last 12 months. If you don't live with either parent or lived with both parents for an equal number of days, information should be given for the parent who provided the greater amount of support to you during the last calendar year. FAFSA instructions have information that will be helpful if you have questions about providing information from separated or divorced parents.
After you mail your FAFSA, you will receive your Student Aid Report (SAR). You must submit this document to the college of your choice. This document may give you some guidance about your Expected Family Contribution (EFC) toward college cost, but it is not the final word. Wait to hear from the financial aid office of the college where you have applied; IT makes the final determination of your eligibility for financial aid. Find out from the college when it expects to send out Award Letters (this may range from early spring to mid-summer).
A standard analysis, established by Congress, is used to determine financial need. The amount you or your family is expected to contribute (Expected Family Contribution, or EFC) is calculated based upon the information reported on your FAFSA. The EFC is then subtracted from the Cost of Education at the college to which you are applying. The difference between the two is your financial need at that institution.
It is important to note that financial need can differ from college to college because the Cost of Education differs.
You can receive need-based financial aid equal to your financial need. Need-based financial aid is not intended to replace your family's contribution toward educational costs but rather to help fill the gap between what your family can pay and your total education costs. (There are some loan programs that are not based on financial need that can be used to reduce or replace your family's contribution. These will be discussed later.)
It is a good idea to have completed the federal tax return before completing the FAFSA since exact tax information can make processing faster and simpler. If this cannot be done in time for you to meet the priority filing date or deadlines set by the college(s) in which you are interested, use estimated figures when completing the applications. If at a later date the estimated figures differ from the actual figures, send the corrected information directly to the Financial Aid Office of the college you plan to attend. It is very important to keep a file with copies of all application materials for each year including a U.S. income tax return in the event you need to provide a copy to your college.
Students under 24 years of age are considered dependent on their parents by federal law no matter where they live (there are limited exceptions--please note them in the FAFSA instructions.) If your parents do not provide their information on your application, you probably cannot be considered for aid. If you have special circumstances which make it impossible for your parents to complete the application, contact the financial aid office of the college and discuss it with them.
Give the new information to the financial aid office of the college you will attend. That office can determine if the change will affect your eligibility for assistance.
Most colleges provide students with a list of lenders participating in the student loan program. Typically, there are some local lenders that may participate as well as some larger, national or regional lenders who maintain large student loan portfolios. The decision of selecting a lender rests entirely with the borrower. Some issues to consider in the selection process include quality service, fast fund turnaround (usually due to sophisticated automation, electronic fund transfer etc.), capitalization policies, commitment to the student loan program and the like.
This program is a grant (does not have to be repaid) to help undergraduates pay for their education after high school. For many students, Pell Grants provide a foundation of financial aid, to which aid from other federal and non-federal sources may be added.
To determine your eligibility, the U.S. Department of Education uses a standard formula, established by Congress, to evaluate the information you provided on the FAFSA.
The maximum award for the 1994-95 award year was $2300. How much you may receive will depend on a number of factors: your Expected Family Contribution (EFC), the cost of education at your college, whether you are enrolled full time or part time, and whether you attend college for the full academic year or less.
The campus-based programs are federal programs administered by the Financial Aid Director at each participating college. A financial aid award may contain funds from one or more of these programs. There are three campus-based programs: Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loans.
How much aid you may receive in these programs depends on your financial need, on the amount of other aid you may receive, and on the availability of funds at your college. Unlike the Federal Pell Grant Program which provides funds to EVERY eligible student, each college participating in any of the campus-based programs receives a certain amount of funds for each program. When that money is gone, there are no more awards from that program for that year.
Each college sets its own deadlines for applying for campus-based funds EARLY in each calendar year. Be sure to check with the financial aid administrator at your college to find out what its deadlines are. You will most likely miss out on aid from the campus-based programs if you don't apply early!
This grant program is for undergraduates with EXCEPTIONAL financial need, that is, students with the lowest EFCs who are also Federal Pell Grant recipients.
You can get up to $4,000 per year depending on the restrictions noted above.
This program provides jobs for undergraduates and graduate students who have financial need. FWS gives you an chance to earn money to help pay your educational expenses. The program encourages community service work.
You will be paid at least the current federal minimum wage, but it may be higher, depending on the type of work you do and the skills required. Your college must pay you directly at least once a month. Your total FWS award depends on the restrictions noted above. It is important to note that work earnings can help reduce need for excessive loan dollars.
This is a low-interest (5 percent) loan (which must be repaid) to help you pay for your education after high school. These loans are for both undergraduate and graduate students with exceptional financial need, that is, students with the lowest EFCs. Federal Perkins loans are made through the college financial aid office--the college is your lender.
Again, depending on restrictions noted above, you can borrow up to:
If you are eligible for a Federal Perkins Loan you will receive a lot more information about current policies and procedures directly from your college. Make sure you follow all directions.
This is a low-interest loan made to students attending college at least half-time. Loans are made by a lender such as a bank, credit union, or savings and loan association. These loans are insured by the guarantee agency in each state and reinsured by the federal government. You must repay this loan. (Some colleges are participants in the new Federal Direct Student Loan Program, in which case, the federal government is the lender.)
Federal Stafford Loans may be subsidized or unsubsidized. You may qualify for a "subsidized" Federal Stafford Loan which is based on financial need. But, you can also get an "unsubsidized" Federal Stafford Loan regardless of need - that is, regardless of your or your family's income. It is possible for you to have a Federal Stafford Loan partly based on financial need and partly not on need.
If you are a DEPENDENT UNDERGRADUATE student you can borrow up to:
If you are a GRADUATE student you can borrow up to $18,500 a year. At least $10,000 of this amount must be in unsubsidized Stafford Loans.
The amounts given above are the MAXIMUMS you can borrow per year. However, you can't borrow more than the cost of education at your college minus any other financial aid you receive. Talk to your financial aid administrator to find out how much you can borrow.
The INTEREST rate (controlled by Congress) on Federal Stafford Loans is a variable rate that changes on July 1st of each year. The rate is capped at 8.25 percent.
If you have SUBSIDIZED Federal Stafford Loans the federal government pays the interest for you while you are in school.
If you have UNSUBSIDIZED Federal Stafford Loans you will be responsible for the interest from the time the loan is disbursed. You may choose to pay that interest while you are in school, or defer payment until you graduate and begin repaying the principal amount borrowed. Note, however, if you choose the latter, at some point the interest will be added to the principal, increasing the amount of principal (and interest) you will have to repay. Adding interest to principal is called capitalization. Lenders' capitalization policies may differ so make sure you select a lender whose policies are most advantageous to you. (For example, it would be more advantageous to chose a lender who only capitalizes once - at graduation, vs. a lender who capitalizes as frequently as quarterly, which is allowed by law.)
Whether your Federal Stafford Loan is subsidized or unsubsidized you will pay a 3 percent origination fee and 1 percent insurance premium which will be deducted proportionately from each loan disbursement made to you. These fees are passed on to the federal government and guarantee agency respectively to help reduce costs incurred in the management of the program.
These loans enable parents with good credit histories to borrow for each child who is enrolled at least half-time and is a dependent student. These loans are also made by a lender such as a bank, credit union, or savings and loan association.
The yearly loan limit is the student's cost of education minus any estimated financial aid the student is eligible to receive.
The interest rate (controlled by Congress) is a variable rate which changes on July 1st of each year. This rate is capped at 9 percent.
Parents will pay the same fees that apply to the Federal Stafford Loans: a 3 percent origination fee and a 1 percent insurance premium which will be deducted proportionately from each loan disbursement.
Repayment on PLUS loans generally begins within 60 days after the final loan disbursement for the academic year.
For more information on PLUS loans contact your student's financial aid administrator.
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