How does Financial Aid work?

Colleges & Universities A-Z University of Florida
1

<p>I am just curious to how financial aid actually works. Say I got the pell grant and then a lot of outside scholarships that exceed the amount that it would cost to go to the school-including everything. So say I got 20,000 in financial aid (including all pell grants and other aid), but the cost only was about 18,000. Would they give me a check for the 2,000 or make me give back the aid. Sorry if I am wording this question a bit weird. But I heard that sometimes they make you give back the aid if it goes over the amount?</p>

<p>Has anyone else had this issue where the amount of aid has exceeded the actual cost of the school?</p>

<p>PS. This is all hypothetically because I havent gotten my aid yet.</p>

2

<p>So aid is delivered to you one of multiple ways:</p>

<p>1 -It is a third party who writes you a check you can deposit in your own bank account. You must report this to the school.</p>

<p>2 -It is a third party who writes you a check that only your school can process or who sends the check straight to your school. The money is then processed by your university and given to you accordingly.</p>

<p>3 -It is the federal government, state government, or first party university foundation money. The money is obviously processed by your university and given to you accordingly.</p>

<p>Now, it gets really complicated because you have to report all this aid to the school. In the cases of 2 and 3 the school will know how much you got. In the case of 1, the school requires you report this to the financial aid office (honor system). Basically… aid you earned, primarily Schoalrships, will never be “repayed” or “taken away” from you. This is the case for bright futures too. If you already paid for COA using PrePaid or some other scholarships, then bright futures will still be dispensed to you. Yes, if you have already covered Tuition/Fees, University Housing if you have it, and University bills… basically when your balance with the university is 0… extra scholarships are delivered to your bank account that you linked with UF.</p>

<p>However, aid like a Pell Grant is NOT earned. You are not entitled to it simple because you are eligible. Pell Grants adjust accordingly. So lets say you put in the work and effort to get bright futures, xyz 5000/year 4 year scholars, whatever whatever scholarship… those will be the primary funds used to cover COA. If you cover the majority of the COA before a pell grant, you won’t get as much pell grant money if at all. Some other government grants work like this. However, many times it is hard to foresee your entire aid package so you will get the Pell Grant money (it gets dispensed) only before some other scholarship you may have won to come in later.</p>

<p>Therein lies the rub as far as I see. My biggest questions is this:</p>

<p>Lets say you had no external scholarships, have an EFC of 0, and thus got a Pell Grant. It gets dispensed (put into YOUR bank account) at the beginning of the semester. Then, a few weeks into the semester, you win a huge third party scholarship award. As terms of this reward, you must report it to the university. This award covers most if not all of your COA. All of a sudden you didn’t need the pell grant in the first place, but the money is sitting in your bank. The university may ask you to pay it back… I don’t know if anyone has any experience with this sort of situation.</p>

<p>To more directly answer your question, however, it completely depends on the type of aid that is compromising your award. If all of that aid were merit-based type scholarships, especially third party awards, you would definitely get it delivered to you.</p>

3

<p>OMG Thank you sooo much for this info! It was really helpful :)</p>

<p>so basically they start off using your external scholarships and college scholarships. then they will go to use your pell grant. but your pell grant cant be given to you until you have used up all of your other scholarships. And then say you have used up all of your other scholarships and you dont need to pay anymore for school. you wouldnt get that 5500 (or whatever it is) pell grant, correct? This is the part I am confused at though because my sister got the pell grant and then whatever she didnt use was written out to her as a check…</p>

4

<p>I’m in the same situation. So if you have enough money through scholarships to cover the COA, they’ll reduce your pell grant? What if one of your scholarships was for one year only? Also, what if you don’t report an outside scholarship you received?</p>

5

<p>UMcane, that is the thing… Financial Aid only indirectly takes into account money that you would otherwise be getting… either handed to you from parents, savings, working, or whatever. These sources of funds are normally calculated into your EFC via the FAFSA (then your individual COA becomes the full COA - your EFC). The irony is that most people getting a Pell Grant have an EFC of 0. So your financial aid makes these assumptions: People with an EFC of 0 have no savings, do not work, have no other income, and do not get extra money on the side from family members. You could be recieving monetary gifts or financial support well in excess of COA from your parents/family/sugar daddy and the university would have no clue. But they must disburse the award to you based on what is reported because they must make these assumptions. This is why it gets DISBURSED to you. So that you can use it to pay your own bills… the university is obviously not micromanaging your own personal expenses. When you say “whatever isn’t used up”… you just mean whatever the university does not automatically apply to outstanding charges. It is common for the Pell Grant to be disbursed directly to the student.</p>

<p>Here is one way to get Pell Grant disbursed to you:</p>

<p>Get minimal external scholarships and have an EFC of 0 so that you qualify for Pell. Do not live on campus, get a meal plan, or preorder books so that those charges are not on your university record. Link a bank account with your student financial aid account. Pay your tuition bill in ISIS as soon as it is created (first week of the semester or sooner) using your parent’s credit card. Your balance with the university is now 0. When financial Aid is disbursed (second or third week of semester) the pell grant money will go straight into your bank account.</p>

<p>I know tons of people who pocket their pell grant every year because they fill out FAFSA using their poor single mother’s tax return (she files single and claims the student), qualifies for tons of grants, then pays all the university bills using the rich divorced daddy’s money (he files single as well, doesn’t claim the kids and reports a high income. but he has no clue what FAFSA even means). This is so easy to do when you live off campus and the only expense you have that the university knows about is your tuition.</p>

<p>sciencegurl: In a financial aid package, as your total scholarship amounts approach COA, the first things to leave the package are loans. Afterwards, the first grant would probably be Pell. I am not sure of this. But yes, they will adjust your Pell Award accordingly if you are already reporting other sources of income to cover COA. And yes, this is sort of an “incentive” to not work so hard to earn scholarships, but this is the way the government works. A pell grant is not something you are entitled to, it is part of a government program to help poor people go to college. If a scholarship was for one year only, it will only affect that year’s Financial Aid award; you file fafsa and recalculate/get rerewarded financial aid every year. </p>

<p>As for not reporting outside scholarships, all depends on the scholarship. If its a program that just cuts you the check, maybe sends a certificate in the mail, and you never hear from them again; do you think the university would know? I have done it and didn’t get caught. But I would just be careful. The worst that could happen is the university finds out somehow someway and tells you it needs to be reported and you can feign ignorance and pretend you didn’t know. And yes, the university does find out easily for well known awards. Scholarships are like sweepstakes contests; winners lists must be published and available to the public. Even more, some foundations WANT everyone to know who they are awarding. Hell, one time I won an award and the foundation put an ad in the local paper in gainesville announcing it. Just know that many third party scholarships are even acutely aware that awards need to be reported to the university for these fine print reasons. Sometimes they even figure out who at the university to write the check to and you must take the check to the actual financial aid office to be processed.</p>