Financial Aid

How Financial Aid Works

The financial aid system works on one basic principle: parents and students are expected to contribute to the cost of college to the extent they are able ("able" as defined by federal and institutional formulas). If you are unable to contribute the entire cost, financial aid is available in the form of grants, loans, and work-study jobs to make up the difference. The formula colleges use to determine financial aid eligibility is simple:

Cost Of Attending College (Total Attendance Budget)
- Amount Family Can Contribute (Expected Family Contribution)
= FINANCIAL AID ELIGIBILITY (THE FAMILY'S NEED)

Like most formulas, quite a bit of information goes into determining the family's ability to pay for college (the EFC, or expected family contribution).

There are several estimators online that will provide an estimate of your EFC. Please refer to the helpful websites listed below.

How Financial Aid Can Help Students Attend the College of Their Choice

In your investigation of colleges, you should not immediately rule out a college because of cost. As illustrated by the financial formula below, college cost will vary, but the expected family contribution remains the same. Be aware that the financial aid eligibility cost will be comprised of some grant (you won't have to repay), some loan (you will have to repay, usually at a low interest rate, after you finish college), and some work-study (you will have an on campus jobs subsidized by the federal government, usually about 10 hours per week). The amount of each of these components will vary from school to school (pay careful attention to the loan portion, since you will have to pay that back).

Here's one example of how it works. Suppose the expected family contribution is $10,000 a year. According to the formula, financial aid eligibility would look like this:

College X Total Cost $19,000
- Family Contribution $10,000
= FINANCIAL AID ELIGIBILITY $9,000

College Y Total Cost $29,000
- Family Contribution $10,000
= FINANCIAL AID ELIGIBILITY $19,000

The expected family contribution stays the same at each college, while financial eligibility increases as the cost increases. For this reason, you and your parents can, and should, consider a range of colleges representing different costs. For example, the more expensive school may have a larger endowment and therefore offer more generous financial aid. It is important to ask each college what its financial aid policies are, and to find out, in particular, whether or not they are committed to meeting your full financial "need."

Types of Aid

There are two types of financial assistance: merit and need-based aid.

Merit Aid is based on a student's academic profile, accomplishments in high school, special talents (athletic, musical, artistic, etc), leadership and a number of other qualities. These awards are based on a measure of merit, not financial need. The best source of merit scholarship is the college or university you're applying to. Some schools automatically award scholarships provided you apply by a certain deadline date. You would hear about any merit scholarship money in the admission letter. Other merit awards require a separate application, which may include additional essays and/or recommendations. Often these scholarships are not awarded until the spring. Many scholarship deadlines are in the late fall and early winter, so if you haven't already investigated these opportunities, now is a good time to check the college websites. Merit aid is also available from a number of corporations and foundations. Search online at www.fastweb.com for these opportunities.

Need-Based Financial Aid is based on a family's income and assets. Colleges recognize that their price tag is greater that what many families are able to pay. The first mistake many families make is assuming that they will not qualify for need based aid; however families in even the highest income brackets may qualify for aid. A number of online financial aid calculators can give you a general idea of whether you will qualify.

Most colleges will require the Free Application for Federal Student Aid (FAFSA). The Federal government will process this form free of charge. The Department of Education highly recommends you submit the FAFSA online at www.fafsa.ed.gov , but paper forms are available. Generally, the FAFSA should be submitted by mid February of your senior year, but cannot be submitted before January 1. To provide accurate information about your income and assets, you will need a completed income tax return to fill out the FAFSA form, so filing your taxes early would be wise.

Make copies of your complete FAFSA form and keep them in a safe place in case something gets lost. Double check to be sure your information is accurate. Make sure you meet deadlines! Missing a deadline means missing out on getting the most aid available. If you have a question about information you are being asked to provide or you have special circumstances you need to convey, it's best to deal directly with the financial aid office of the school to which you are applying.

Private colleges often have more money available to distribute as grants than do publicly funded institutions. Rather than relying solely on the FAFSA for their needs analysis, these schools may also ask financial aid applicants to complete their own institutional form or may request the College Scholarship Service Profile (CSS Profile). The Profile provides a more complete picture of a family's finances and has a section where families can discuss special circumstances. If you are applying to private institutions, you'll want to find out which forms are required. If the CSS Profile is needed, register for your application at profileonline.collegeboard.com in the fall of your senior year. The College Board website provides a list of schools that require the CSS Profile.

You should receive your financial aid award letters in late March or early April. Though colleges work with similar data in determining how much a family can contribute to the comprehensive cost, financial aid packages can vary greatly from school to school. A package generally includes a grant (money that does not have to be repaid), work-study (a part time job on campus, and federal and/or state loans (money that will have to be repaid with interest).

Georgia HOPE Scholarship is available for students attending college in Georgia. The HOPE grant covers tuition, HOPE approved mandatory fees and a book allowance of up to $300 at a public institution in the state. At a private college or university, you may receive a HOPE scholarship award of $3000 per academic year. You must fill out the FAFSA form and the eHOPE application to be eligible. You can find the eHOPE application at www.Gacollege411.org

Questions to Ask

The following questions may be asked of either financial aid or admission officers:

What is the current total student budget (realize that this cost will increase each year)? What does that include? Tuition? Travel? Room and board? Required fees? Estimated book and personal expenses?

Does the college meet the demonstrated financial need of all admitted students? If not, what are the college's policies? What percentage of a student's need does the college meet?

What financial aid forms does the college require? FAFSA? CSS Profile? Their own form?

What is the maximum loan amount each year the college would give a student in his/her financial aid package? Will the amount of loan as a percentage of the total package increase each year, or remain approximately the same?

What academic, talent or athletic scholarships are available at the college? Upon what criteria are they based? What are the student's chances of realistically receiving one of these scholarships? How much are they worth? How does one apply? Are the renewable for each year of attendance? Does the student have to maintain a certain grade point average to renew the scholarship each year?

Financial Aid Websites

www.fafsa.ed.gov: Free Application for Federal Student Aid

www.collegeboard.com: Financial aid basics, a link to the CSS Profile and a financial aid calculator

www.fastweb.com: A free online scholarship search service

www.finaid.com: The most comprehensive financial aid website available; includes financial aid calculators