What is Student Financial Aid
Student financial aid is money to help you pay for higher education. You can receive funds from both government and private sources, and financial assistance usually comes in the form of grants (or "scholarships") or loans.
So What Does “Financial Aid” Really Mean?
The truth is, it’s a general term often used in a broad, somewhat confusing way to encompass all kinds of financial products and services used to cover the overall cost of attending college.
In fact, it is easier to understand financial aid if we first define the term Cost of Attendance.
Cost of Attendance is the total cost of school for a given period (usually referring to a full academic year, term or semester). Cost of Attendance includes all associated costs of the academic program, such as:
- Tuition and fees
- Room and board
- Travel to and from school
- Books and materials
Oftentimes, Cost of Attendance can be a pretty big number. The federal government and colleges and universities have come up with three main components of covering the Cost of Attendance. They are:
- Expected Family Contribution (EFC): This is the amount the family is expected to pay toward the Cost of Attendance. The EFC is calculated in one of two general ways, which we’ll talk about later.
- Financial Aid: Usually made up of grants and scholarships, work study and loans.
- Unmet Need: This is when the school can’t (or doesn’t) come up with enough financial aid to cover the remaining cost of attendance after the EFC. (This is everyone’s least favorite component.)
So that’s the big picture. The good news is that in the end, after all the financial calculations and phone calls have been made, your financial aid situation usually works out just fine. Each year, millions of students are able to get the resources they need to attend school.
How to Get Started
To get the process started, families and students need to do a couple things. First, students and families must file the Free Application for Federal Student Aid (called FAFSA). The information you provide on the FAFSA is used in calculating the types and amounts of financial aid for which you qualify. The quickest and easiest way to file is to use FAFSA. You may also pick up a paper copy from your high school guidance counselor or your school’s financial aid office, and submit it through the mail (this will take longer to process). With all financial aid, the sooner you apply, the better your chances. File your FAFSA as soon after January 1st as you can. The FAFSA will ask you about your age, education, residency, income, the types of financial aid that interests you, and other information.
Second, student and family must apply to the college (or colleges, if the student is applying to more than one) for financial aid. These applications are used by the school to calculate financial need and the Expected Family Contribution.
The financial aid office at your college will have more information about grants, scholarships and loans, especially its own institutional aid and the federal government’s aid programs. And your high school guidance counselor may have good information available as well.