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Financial Aid 101

Financial aid is intended to make up the difference between what you can afford to pay and what college costs. There are three types of financial aid:

  1. Grants and scholarships that do not have to be repaid. Scholarships may be awarded based on need or a student's academic record or special talent.
  2. Low interest loans that the student and/or parents repay over time.
  3. Work-study programs that allow students to earn wages that can be applied directly to their college expenses.

Financial aid can come from a number of sources including the federal government, a specific college or university or a private bank.

Financial Aid Eligibility
Students and parents are expected to contribute what they're able to towards college costs. But who determines what your expected portion should be? The formula used by financial aid offices considers:

  • The Cost of College – The average cost of attendance, which includes tuition, fees, room and board, books, supplies and other personal expenses.
  • The Expected Family Contribution (EFC) – A standard calculation for determining the need for financial aid. The EFC is calculated by considering the family's financial situation (income and assets), number of family members overall and the number of family members in college.

Cost of College - EFC = Financial Aid EligibilityThe EFC is subtracted from the cost of attending the chosen college, and the result is used to determine the student's financial need or eligibility for financial aid.

Updated 12/08/2015