Finances: Financial Aid and FAFSA

Family Modules

Module 6 Part 2

MENU

Introduction

Objective: Families will explore, reflect on, and draft a checklist of needed information from www.fafsa.ed.gov.

Estimated time 20-30 minutes

Materials needed:

Curriculum Link:

This section corresponds with Module 5 Activity 1 in the STEPP Classroom Transition resources.

Learn About It

How to Pay for College: See How Financial Aid Works [Transcript]

In general, financial aid describes any funds available to help students and their families pay for school. It may directly cover tuition, room and board, or books, or it may cover indirect costs associated with being a student, such as living expenses or child care.

Although some students and families pay out of pocket for a college education, the majority get some kind of financial aid. According to the National Center for Education Statistics, for full-time, first-time, degree-seeking undergraduate students in 2009-2010:

  • Percentage of students receiving any type of financial aid: 85% at 4-year schools and 75.5% at 2-year schools
  • Percentage of students at public schools receiving any type of financial aid: 81.5% at 4-year schools and 70.3% at 2-year schools
  • Percentage of students at private nonprofit schools receiving any type of financial aid: 88.8% at 4-year schools and 89.4% at 2-year schools
  • Percentage of students at private for-profit schools receiving any type of financial aid: 91.8% at 4-year schools and 88.3% at 2-year schools.

There are many different types and sources of financial aid, which we’ll discuss on the next few pages. The term “financial aid package” refers to the aid that each student is offered. Everyone’s package is different and is composed of funds of different types, from different sources, and in different amounts.

Types of Financial Aid

There are significant differences between the types of financial aid available, and each student will vary in the types of aid for which they are eligible.

Gift Aid is money that does not need to be paid back to the source. The major examples of gift aid are grants and scholarships.

  • Grants tend to be based on financial need, and many come from the Federal government. For example, the Pell Grant program and the Federal Supplemental Educational Opportunity Grant (FSEOG) program are both Federal grants for students with financial need. Pell includes more students, while FSEOG is for students with the highest levels of financial need.
  • Scholarships are more often based on recognition of special achievements. This could include academic excellence or athletic achievements. It could also include meritorious achievement in any area: writing, community service, the arts, and so on. To be eligible for certain scholarships, the student may need to fit into a certain category, and then also show merit within that category. For example, there could be a scholarship for the student who has the best GPA within the Criminal Justice major, or one for the left-handed student with the best record of community service in the city.
  • Scholarships come from many sources, including the college or university, private organizations, employers, and charitable foundations. Scholarships generally require students to complete a separate application; just filling out the FAFSA will not automatically apply students for many scholarships.

Self-Help Funds are monies that must be paid back to the source.

  • Student loans will need to be repaid in money, usually with interest. Student loans can come from a variety of sources, both public and private. Many students and/or their parents get subsidized student loans through the government, in which case the interest rates are lower. Private student loans are also available from other organizations like banks; however, the interest rates may be higher. In many cases, student loans give a grace period before repayment is expected. Usually the grace period includes the entire time a student is in school and a few months after graduating.
  • Some self-help funds are repaid in employment or service. The employment or service may occur at the same time as the money is given (e.g., work-study), or it may be repaid after the student has finished college (e.g., the Teaching Fellows program or some military service-based aid). The student must usually agree to terms and conditions stating that they will have to repay the funds in money if they do not fulfill their work or service obligation.

Source: some information in this section comes from ECU’s office of Financial Aid: http://www.ecu.edu/financial/.

Sources of Financial Aid

In addition to the different types of financial aid, there are various sources of aid. The Federal and state governments are a major source for grants and loans. They also offer service- and work-based aid.

Colleges and universities often have a range of financial aid offerings. These frequently include various scholarships and service- and work-based aid. However, these offerings may actually come from a source external to the college as well. For example, a student may be offered work-study at his or her school, but the money may come directly from a government program. In addition, an athletic scholarship from the college may be funded by a private donation that was earmarked specifically for that purpose.

Banks, credit unions, and loan companies may offer private loans that can be used to finance a college education.

Many other organizations also provide funding for college. For example:

  • The National Center for Learning Disabilities offers scholarships to students with LD
  • Organizations like Kiwanis International and 4-H offer scholarships
  • Major employers and corporations may offer scholarships to the children of employees, and may fund scholarships for students who aren’t related to employees as well.

Qualifying for Financial Aid

Once you know about the different types of financial aid, it’ll be easier to understand what you’re looking for when you research opportunities available to you. You can start by looking into many different options, then narrow down the possibilities. It’s a good idea to apply for anything that you think you may qualify for, even if you think getting it is a long shot. Every dollar makes a difference, and some students make a big dent in their college expenses by getting aid from multiple sources.

It’s crucial to understand the terms and conditions of each part of your aid package. Some financial aid comes with significant requirements and restrictions, while other aid may be “no strings attached” after the initial review. For example, a private one-time scholarship of $500 might just select a recipient, confirm that the recipient is attending college, and then hand over a check and be finished with it. On the other hand, an athletic scholarship might require recurring verification that the student is on a team’s active roster in addition to verification of student’s GPA and credit hours earned each semester.

Maintaining eligibility for many types of financial aid depends on continuing to make “satisfactory academic progress.” The specifics vary from school to school, but this benchmark generally involves earning a certain minimum GPA while taking a minimum number of credit hours per semester or academic year. For example, at ECU, the Financial Aid office calculates academic progress at the end of each semester for all students receiving aid. To keep his or her financial aid package, a student must pass 80% of the credit hours they attempted and maintain a minimum GPA of 1.8 (freshman year), 1.9 (sophomore year), or 2.0 (junior year and up). Students who don’t meet these requirements get one semester of probation to raise their grades before having their financial aid package suspended.

Parents Chime In

Family FAFSA Activity

  • Visit www.fafsa.ed.gov and read the information and forms about completing the FAFSA.
  • Use the provided checklist to create a list of information that you’ll need to complete the application.
  • Include the completed checklist in your transition notebook.

Objective Check

Have you accomplished today’s objective?

Objective: The student will develop a schedule that demonstrates an effective balance of his/her academic and social life in the college setting, including class time, study time, and budgeted time for social, health/wellness, and daily living priorities.

If so, congratulations!

If not, review the sample balanced schedule and revise the schedule for Annie to reflect a balance of activities. Have your parent review this with you. Also work on revising your schedule for the upcoming week to reflect a balance of activities.