Tag EFC

Financial Aid in the time of COVID-19

Although the COVID-19 pandemic has caused some schools to push back their enrollment deadlines, some colleges are still asking students to deposit by May 1.  Financial aid awards likely play a big part in your final decision.  But interpreting those awards might seem a bit like reading a foreign language.  Below are six common terms that you will see on a financial aid award and some ideas on how to assess your offers.   

In addition, it’s possible that your family’s financial circumstances have changed since you applied.  Whether that is related to the current coronavirus pandemic or other reasons, colleges have a process for reconsidering your financial aid award. This process is often called Professional Judgement.  We’ve included information at the end of this post on how to appeal your financial aid award.   

  1. Cost of Attendance – The Cost of Attendance is more than just tuition; it is an estimate of the total expense for one year of attendance.  It should include – 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the financial aid award does not include these items, search the website for the information or call the college.

  2. Expected Family Contribution (EFC) – The amount your family is expected to pay toward college (your EFC) is calculated by the FAFSA (Free Application for Student Aid).  You can find your EFC on the confirmation page you received when you submitted your FAFSA form.  This number should be listed on all your awards.  If it’s not there, ask the college why.

    Cost of Attendance – Expected Family Contribution = Need

  3. Student Financial Need – Use the financial aid equation above to determine your “financial need” for each school.  Then check the college’s award letter.  If the school’s total financial aid award is less than your financial need, you have a “financial aid gap.”  You must pay this gap (in addition to paying your EFC amount) with other sources of funding not provided by the school.  Scholarships from community groups or other sources, personal savings, or private loans are examples of how students pay their EFC plus any financial gap.  
     
  4. Grants and Scholarships – Grants and scholarships are awards that do not need to be repaid.  Are these grants or scholarships renewable (will you received them for just freshman year or every year)?  What are the eligibility requirements that you must meet to receive the scholarship for additional years (a minimum GPA, a certain number of course credits, etc.)? 
     
  5. Loans – Has the college included student or parent loans in your award?  This money must be repaid by you or your parents.  A financial aid offer with only loans may not be the best choice for you.  
     
  6. Work-study – A work-study award is potential income that you may earn by working part-time in a work-study position.  Most work-study jobs are on-campus which can make them convenient, but a work-study award does not guarantee you a work-study job.  You must apply for work-study positions like any other part-time job.  And just like other part-time jobs, you will receive a paycheck for your work-study earnings.  It is not automatically applied toward your cost of attendance.  Contact the university financial aid office to learn about the availability and application process for work-study positions.     

Are you being offered a mix of grants, scholarships, loans and work-study?  The more money you don’t have to pay back, or earn by working, (ideally – more scholarships and grants, less loans and work-study) the better.     

Take Action 

Enter all your admission decisions and financial aid awards into GuidedPath.  This gives you a list of all the awards colleges are offering you. 

To enter college awards: 

  1. Log into your GuidedPath account. 
  2. From your dashboard, click on the blue Decisions box. 
  3. Click on each college Decision Details. 
  4. Click on Responses: Admitted? Waitlisted? Not Admitted? 
  5. Click on Awards. Add each award from your award letters in this section. 

Enter Award type | Name of the award | Annual Amount | Total Amount (4 year amount) | Additional Information (if any) 

Repeat this process for EVERY college. Get all your numbers entered to prepare for the next step: Comparing Financial Aid Awards 

Appealing for Additional Financial Aid 

Especially in the wake of the coronavirus pandemic, many families find themselves facing a very different financial reality than a few months ago.  If a parent has lost their job, has become ill which has caused them to stop work, has lost wages due to a quarantine or “stay at home” order, or even lost a substantial amount of savings/assets due to stock market changes, you may have good cause to appeal your financial aid award.  This Tip Sheet by Mark Krankowitz, author of How to Appeal for More College Financial Aid is a simple guide on how to start the process.     

In addition, Lynn O’Shaughnessy, author and higher ed/financial journalist, has tips on her blog The College Solution.   

You’ll need to contact the admissions or financial aid office at the college directly, but these two lists can help you get the process started.  

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Comparing Financial Aid Awards

 

scale compare costs - transparent

You got into the top schools on your list.  Each has sent you a financial aid award.  One offer looks better than the other, but is it really?  It’s important to compare apples to apples when looking at financial aid offers.  Here are 6 questions to ask: 

  1. What is the Student Budget?  Does the college list all the costs for going to college: 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the award does not include these items, search the website for the information or call the college. 
     
  2. What is your Expected Family Contribution (EFC) on your Student Aid Report?  The amount your family is expected to pay toward college is on the student aid report generated when you filed the FAFSA (Free Application for Federal Student Aid).  This number is needed for comparing financial aid awards.  If your family contribution is close to or more than the student budget, then your awards from the college are going to be based on merit, and not on the financial need you have.
  3. Is there a gap?  You should know your EFC from filing your FAFSA.  To calculate how much financial aid you should be receiving, subtract your expected family contribution from the total student budget (all five items from question 1).  The remainder is your estimated financial need at the college.  Is the college meeting your full need, or only a portion of it?

    Total Cost of Attendance – Expected Family Contribution = Need 

  4. How much of your award is grants or scholarships?  Grants and scholarships are money that you will not have to repay later.  You want to maximize the amount of grants and scholarships you receive and minimize the amount of loan money you must take out.  Are the grants or scholarships renewable for four years?  What conditions exist for the renewable awards (a minimum GPA, number of credits completed, etc.)? 

  5. How much is in student or parent loans?  How much of the offer is a parent loan?  A financial aid award of $20,000 parent loan – but no grants or scholarships – is not a good offer.  Parent loans (when necessary) should ideally be used to help pay for the expected family contribution not meet your financial need.

  6. Is there a good mix?  Is there something missing?  Are you being offered grants, scholarships, loans and work?  Look for a good mix.  If you are not offered “work study” ask about it.  It is especially helpful If you are looking for a campus job to earn money for your personal expenses while in college.   

Take Action 

Use the EFC Calculator GuidedPath to determine your Expected Family Contribution.  Add in all financial aid awards into Decisions in GuidedPath.  Use the Cost Comparisons Tool to view and compare all your financial aid awards. 

read more

Defining Financial Aid Terms

By now you’ve received financial aid awards from the schools that have offered you admission.  But interpreting those awards might seem a bit like reading a foreign language.  Here are six common terms that you will see on a financial aid award. 

  1. Cost of Attendance – The Cost of Attendance is more than just tuition, it is an estimate of the total expense for one year of attendance.  It should include – 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the financial aid award does not include these items, search the website for the information or call the college.
  2. Expected Family Contribution (EFC) – The amount your family is expected to pay toward college (your EFC) is calculated by the FAFSA (Free Application for Student Aid).  You can find your EFC on the confirmation page you received when you submitted your FAFSA form.  This number should be listed on all your awards.  If it’s not there, ask the college why.

    Cost of Attendance – Expected Family Contribution = Need 

  3. Student Financial Need – Use the financial aid equation above to determine your “financial need” for each school.  Then check the college’s award letter.  If the school’s total financial aid award is less than your financial need, you have a “financial aid gap.”  You must pay this gap (in addition to paying your EFC amount) with other sources of funding not provided by the school.  Scholarships from community groups or other sources, personal savings, or private loans are examples of how students pay their EFC plus any financial gap.
  4. Grants and Scholarships – Grants and scholarships are awards that do not need to be repaid.  Are these grants or scholarships renewable (will you received them for just freshman year or every year)?  What are the eligibility requirements that you must meet to receive the scholarship for additional years (a minimum GPA, a certain number of course credits, etc.)? 
  5. Loans – Has the college included student or parent loans in your award?  This money must be repaid by you or your parents.  An offer of $20,000 parent loan alone is not a good offer.  
  6. Work-study – A work-study award is potential income that you may earn by working part-time in a work-study position.  Most work-study jobs are on-campus which can make them convenient, but a work-study award does not guarantee you a work-study job.  You must apply for work-study positions like any other part-time job.  And just like other part-time jobs, you will receive a paycheck for your work-study earnings.  It is not automatically applied toward your cost of attendance.  Contact the university financial aid office to learn about the availability and application process for work-study positions.     

Are you being offered a mix of grants, scholarships, loans and work-study?  The more money you don’t have to pay back, or earn by working, (ideally – more scholarships and grants, less loans and work-study) the better.     

Take Action 

Enter all your admission decisions and financial aid awards into GuidedPath.  This gives you a list of all the awards colleges are offering you. 

To enter college awards: 

  1. Log into your GuidedPath account. 
  2. From your dashboard, click on the blue Decisions box. 
  3. Click on each college Decision Details. 
  4. Click on Responses: Admitted? Waitlisted? Not Admitted? 
  5. Click on Awards. Add each award from your award letters in this section. 

Enter Award type | Name of the award | Annual Amount | Total Amount (4 year amount) | Additional Information (if any) 

Repeat this process for EVERY college. Get all your numbers entered to prepare for the next step: Comparing Financial Aid Awards 

Next week: How to determine the best financial aid award.  

read more

Comparing Financial Aid Awards

 

scale compare costs - transparent

You got into the top schools on your list.  Each has sent you a financial aid award.  One offer looks better than the other two, but is it really?  It’s important to compare apples to apples when looking at financial aid offers.  Here are 6 questions to ask: 

  1. What is the Student Budget?  Does the college list all the costs for going to college: 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the award does not include these items, search the website for the information or call the college. 
     
  2. What is your Expected Family Contribution (EFC) on your Student Aid Report?  The amount your family is expected to pay toward college is on the student aid report generated when you filed the FAFSA (Free Application for Federal Student Aid).  This number is needed for comparing financial aid awards.  If your family contribution is close to or more than the student budget, then your awards from the college are going to be based on merit, and not on the financial need you have. 

  3. Is there a gap?  You should know your EFC from filing your FAFSA.  To calculate how much financial aid you should be receiving, subtract your expected family contribution from the total student budget (all five items from question 1).  The remainder is your estimated financial need at the college.  Is the college meeting your full need, or only a portion of it?

    Total Cost of Attendance – Expected Family Contribution = Need 

  4. How much of your award is grants or scholarships?  Grants and scholarships are money that you will not have to repay later.  You want to maximize the amount of grants and scholarships you receive and minimize the amount of loan money you must take out.  Are the grants or scholarships renewable for four years?  What conditions exist for the renewable awards (a minimum GPA, number of credits completed, etc.)?  

  5. How much is in student or parent loans?  How much of the offer is parent loan?  A financial aid award of $20,000 parent loan – but no grants or scholarships – is not a good offer.  The parent loans (when necessary) should ideally be used to help pay for the expected family contribution not meet your financial need. 

  6. Is there a good mix?  Is there something missing?  Are you being offered grants, scholarships, loans and work?  Look for a good mix.  If you are not offered “work study” ask about it.  It is especially helpful for you to have a campus job to earn your personal expenses while in college.   

Take Action 

Use the EFC Calculator GuidedPath to determine your Expected Family Contribution.  Add in all financial aid awards into Decisions in GuidedPath.  Use the Cost Comparisons Tool to view and compare all your financial aid awards. 

read more