How the Financial Aid System Works

Assuming that you and your family have saved as much as you could for your college education - and that amount is still not enough to pay for the cost of college - then you need to know how the financial aid system works. At each college to which you apply, the financial aid office computes the total cost of attendance, then subtracts the amount that you and your family can pay. This is called the Expected Family Contribution or EFC. The result of this subtraction is your financial need. Even though the costs of different colleges and universities vary, your EFC should be the same from school to school.

The financial aid system provides three different types of aid:

• grant aid which does not have to be repaid by the student,
• loans of various kinds, which must be repaid with interest,
• work study which is student employment that is subsidized by the government and the college.

There is no shortage of assistance out there. The federal government allocates approximately $30 billion a year to student aid, the colleges and universities some $8 billion, and state governments a great deal more, if you consider the fact that their lower tuitions represent a tax payer "scholarship."

Summer earnings are also a part of the calculation of your financial aid award. You will be expected to earn a certain amount over the summer, and this will be included as part of your family contribution to the cost of attending the college. Ask the schools to which you are applying what their expectations are. Then you will not be surprised by your financial aid award.

If you and your family do not qualify for financial assistance, there are still scholarships and grants that can compete for. Your guidance library may have sources, your counselor may have advice. College Center can help you identify your special talents and suggest paths through the vast number of sources on this subject.

How do I apply for financial aid?