A Glossary of Financial Aid Terms by Stonehill College “A Guide for Paying for College - A Financial Overview” Alternative Financing Students who do not receive sufficient need-based financial assistance, or families who are unable to meet their expected family contributions, may borrow through one of the alternative financing programs available to them. Information regarding specific programs would be available in the financial aid dept. at the college at which the student plans to attend. Cost of Education (Total Student Budget) Tuition, fees, books, supplies, room and board, living expenses, and estimated transportation costs make up the Cost of Education. Expected Family Contribution This is the amount the student and his or her family are determined able to contribute towards one year of college education. This is calculated by a formula established by Congress (Federal Methodology) for awarding government assistance, or alternately by an Institutional Methodology for the awarding of institutional aid by many private colleges. The formulas include factors such as taxable and non-taxable income, assets, family size, and number of family members attending college. FAFSA Form The Free Application for Federal Student Aid is processed at no cost to the applicant. It is used to determine a student’s eligibility for government grant, loan, and work-study funds. This form should be completed online at fasfa.ed.gov But, it is also available in your high school guidance office. Federal Methodology This is the name of the formula created by Congress that is used to determine eligibility for federal and state funded financial aid programs. The family information presented on the FASFA is used in this formula. Financial Aid Package The award notice sent to the student lists the financial aid for which he/she is eligible at that particular college. The awards that comprise the Financial Aid package may include gift aid (scholarships and grants), loans, and/or work study awards. Financial Need Financial need is the amount by which total college costs exceed the Expected Family Contribution. Grants Grants are gift aid that is awarded based on financial need. They require no repayment. Grants are available through the accepting college, the federal government, state agencies, and private donors. Institutional Methodology This is the name of the formula used by many private colleges and universities to more accurately assess financial need. It was developed through the efforts of The College Board. The formula uses a broader range of family information to calculate the Expected Family Contribution for use in awarding institutional funds. Loans Loans are funds made available in advance through lending institution or schools, as well as private sources – which must be repaid sometime in the future. Repayment terms vary based on need, rate of interest, interest benefits, repayment period, and/or credit worthiness. Traditional student loans, which are based on need, include interest benefits for the in-school period, and repayment is deferred until after the completion of studies. Non-need based student loans typically accrue interest during the in-school period. Some require credit tests and repayment that begins immediately. Merit Based Awards Many colleges award merit scholarships each year to highly qualified students who possess excellent academic credentials. To be considered for merit aid, many colleges recommend (but not require) that the PROFILE Form be filed. Need – Based Awards Students whose Expected Family Contribution (EFC) is less than the Cost of Education demonstrate financial need. Since the family is unable to pay all educational const, the students would receive funding to help make up the difference. Such funds that seek to provide the student the financial ability to attend college may be comprised of gift aid, loan aid, and/or job aid. PROFILE The College Scholarship Service (CSS) PROFILE is a fee based supplemental financial aid application form used by most private colleges and universities to more accurately assess financial need. It is available online at collegeboard Student Aid Report (SAR) About four weeks after the student files the Free Application for Federal Student aid (FASFA), this report is mailed, either by paper or electronically to the student by the federal processor. The document shows the Expected Family Contribution derived through the Federal Methodology and indicates any eligibility for the Federal Pell Grant. If incorrect, incomplete, or outdated information exists, the form may be corrected and re-submitted for adjustment. Work – Study Program The Work-Study Program is a federally subsidized part-time employment program administered by the College. The amount indicated on the Financial Aid Letter is the limit of potential earnings, not a guaranteed financial resource. The funds are earned by working part-time in a position posted by the College’s Work-Study Office. These positions may be in a variety of on-campus departments or in private, not-for-profit or government entities in the local community, such as the American Cancer Society or local elementary school systems.
Posted on: Mon, 24 Nov 2014 23:35:00 +0000