The term "financial aid" is an umbrella term and is all encompassing for both need-based aid and merit-based aid.
There is no official definition of need; each campus defines financial "need" based on their own criteria and calculation methods. Need is based primarily on the family's income in light of the Cost of Attendance and need-aid can include:
Loans: student and/or parent
Is also based on individual campus criteria. It can be based on any number of factors: grades, test scores, leadership, talent (sports, musical, theatrical, etc.), and merit-aid can include:
What every family should know about "financial aid":
The process starts with the FAFSA or Free Application for Federal Student Aid, and applying for financial aid is a yearly process.
Virtually every student planning to attend a 4-year or 2-year college should submit a FAFSA; unless you can write one check for 4-years of college expenses without blinking, you should be completing financial aid forms.
Be aware of financial aid form requirements and deadlines for each individual college as they do vary by college and sometimes by the admission plan being applied under: regular or Early Action or Early Decision.
Apply as soon after the October 1st online availability as possible. Those at the beginning of the line tend to receive the best financial aid offers.
The income information provided on your FAFSA will be from the Prior-Prior income year.
A small number of primarily private campuses also require an additional form, the CSS Profile, in addition to the FAFSA, to obtain a better understanding of a family's ability to pay. The income provided on the CSS Profile will be from the prior year as well as provide an estimate of current year income.
Don't hesitate to contact the college financial aid offices where your student is applying or at local community colleges. Their responsibilities include helping prospective students as well as current students, and they will provide the most accurate answers to your detailed financial aid questions.
WHY apply for Financial Aid through the FAFSA?
The information you submit online on the FAFSA (and possibly also CSS Profile) goes through a need-analysis through the respective FAFSA and/or CSS Profile processing centers, and where your Estimated Family Contribution, or EFC, is determined. This information is provided to the campuses you specify on aid forms.
Your EFC is then used by individual colleges to determine your financial aid packages which may consist of any combination of federal, state, and institutional aid from that college and in the form of scholarships, grants, loans, and/or work study (see umbrella at top of page). NOTE: The federal government does not decide who has "need" or who gets what financial aid offer, colleges do. Your FAFSA is the starting point.
There is no income "cut-off" to qualify for federal student aid. Many factors besides income - from the size of your family to the age of your older parent to the "cost of attendance", which varies from campus to campus — are taken into account. Your eligibility is determined by a mathematical formula and by individual institutional policies, not by family income alone.
Educational loans offered through the federal government are a relatively less expensive way to finance a college education. DO NOT assume you will not qualify.
Some colleges require a FAFSA when awarding merit-aid.
A few colleges offer one-time $1,000 dollar scholarships as incentives to complete the FAFSA.
And most importantly, the FAFSA serves as an "insurance policy" in the event your family's financial situation changes for the worst. (lay off, divorce, major medical expenses, medical leave, need to leave work to care for a family member, etc.) In these cases, you have the ability to update your financial information with situational documentation directly to the campuses being applied at, and your college financial aid office will utilize "professional judgement" to reassess your need. However, if you neglected to submit the FAFSA by the university's deadline, this option might not be available to you.
Understanding your EFC: Steps to take now
No matter where you are in the process, have a senior, junior, sophomore, freshman, or even middle school student, it's best to understand how your family's financial situation will be evaluated - as soon as possible. To do so, take these steps:
Complete the EFC Calculator. EFC stands for Estimated Family Contribution and represents the minimum dollar amount colleges will expect you to pay for one year of college expenses. There are a few different main methodologies or calculation methods that colleges will utilize to calculate your EFC: federal (using only the FAFSA formula) and institutional (using an additional form, the CSS Profile, which can be tailored to include additional financial information each college wants to consider). We recommend completing the EFC Calculator on CollegeBoard's website (link) and complete for both methods to help you understand the differences:
- Federal (using only the FAFSA form)
- Institutional (using the FAFSA and CSS Profile forms)
Because each methodology calculates the EFC differently, it's likely that a student's EFC under each methodology will also vary, sometimes significantly so.
If a student's EFC is less than a college's total Cost of Attendance (COA), the student qualifies for need-based financial aid. (COA - EFC = financial need) Understand that not all colleges meet financial need.
Complete "Net Price Calculators" found on each college's financial aid web-page when researching colleges. These will help you better understand the "net price estimate" it's likely you'll be paying at each college or university, based upon specific answers you provide. Think in terms of buying a car; it's unusual for consumers to pay the "sticker price", and the same theory applies to college tuition. Just be sure to input accurate data for GPA and test scores to yield more accurate estimates, as entering inaccurate data is the number one error made on these.
Complete the FAFSA4caster - to get an estimate of your eligibility for federal student aid. To get to the FAFSA4caster, first go to the Federal Student Aid home page; the link to the FAFSA4caster will then be found on the bottom left of that home page.
Financial evaluation - most asked questions:
In the case of a divorce, financial information reported on a student's FAFSA differs greatly from that which is included on income tax returns. To understand how this is handled on the FAFSA, go to: which parent's financial information is reported on a student's FAFSA? Also see: Who's my Parent When I Fill Out My FAFSA?
Home asset information is NOT included on the FAFSA, although it is on the CSS Profile, an additional form sometimes required by some campuses, primarily private colleges. To better understand which assets are included on the FAFSA, go to: https://fafsa.ed.gov/help/assetnetworth.htm
FAFSA FAQ's answered directly from FAFSA.
What is the official definition of "need"? There isn't one. Every campus defines "financial need" based on their own criteria.
Helpful links to investigate:
FAFSA on the Web Worksheet - Use this to complete FAFSA questions before entering your information online. Completing this before going on-line will save you time and energy! A Worksheet cooresponding to your application cycle may not yet be available, so be sure to check.
FAFSA on the Web - Updated application will become available on each October 1st.
FinAid - established in the fall of 1994 as a public service. This award-winning site has grown into the most comprehensive source of student financial aid information, advice and tools. It's one of our go-to resources for financial aid questions.
Federal Student Aid - An office of the US Department of Education, which has consolidated 16 different financial aid websites into one.
CSS Profile - Some private colleges require this in addition to the FAFSA. Check individual campus financial aid websites to learn if this is required and if so, know each campus submission deadline. Available on-line each October 1st.
California Student Aid Commission - Excellent basic financial aid & Cal Grant information
Western Undergraduate Exchange - A program of western states where students can enroll at participating 2-year and 4-year college programs outside of their home state at a reduced tuition rate. Note that participation can vary by institution and also by majors within institutions. The purpose of these tuition reciprocity agreements between states is to fill seats. It's definitely worth a quick search to see if the institution(s) and/or major(s) you are considering offer these tuition discounts. Use this link to search.
Free Financial Aid Presentations in Fall - provided each year at many area high school campuses. We highly recommend attending presentations by West Valley counselors on any of the multiple dates offered; all families are welcome at any location. Or your school might host its own. Financial aid counselors will take you through the FAFSA, line by line, and answer questions. Be sure to complete the "FAFSA on the Web Worksheet" (link above) to bring with you.
Helpful resources when completing financial aid forms:
Don't be bashful about phoning financial aid offices at colleges where you or your student is applying; financial aid officers are there to help "prospective" students in addition to current students.
FAFSA Help Desk: 1-800-4-FED-AID
CSS Profile Help Desk: 1-844-202-0524
Helpful resources when making final decisions:
Compare Your Aid Awards Tool - from CollegeBoard; use this in spring of senior year to compare financial aid awards from colleges and universities you've been accepted at. This will assist with making your final decision as it helps to better understand how the offers compare in terms of free money versus loans.
Repayment Calculator - from Federal Student Aid site, US Department of Education.
Undergraduate Student Loan Repayment Calculator - from The Hamilton Project, which is based on majors.