How Does Financial Aid Work??

How does financial aid/fafsa work? Does it take an amount of money off the price of college for the school year, then I pay that price after the deduction?

FAFSA allows a student to qualify for federal financial aid programs such as Pell grants, direct student loans, and work study. FAFSA does not give you money.

Most schools require an applicant to file FAFSA in order to receive institutional (from the schooo) financial aid.

Most private schools also require applicants who want FA to complete the CSS Profile. Profile looks at more components of a family’s financial picture than the FAFSA.

Some schools meet an applicants full demonstrated need (as calculated by them), but most don’t.

Run the net price calculators on each school’s site to get an estimated COA. NPCs may be inaccurate if your parents are divorced, own a business, or own real estate beyond a primary home

Both FAFSA and Profile will be available Oct 1, and seniors should generally complete those as soon as possible once available.

Schools where you are accepted and apply for FA will give you a document that show total COA, less grants/scholarships, to get to a net price. Some schools also deduct loans before the net price, which is tricky.

You have to pay the net price, either via cash or loan. Most undergrads are limited to $27k in federal loans in total, over 4 years.

@Daidai20021

Are you asking how you apply for need based aid?

Are you asking how you get merit aid?

Not sure I understand your question.

@Mwfan1921 did a good job describing the process. BUT…I have a few things to add.

  1. Most important...student and parent need to discuss any financial limitations for college plus a possible annual budget for parent out of pocket costs.
  2. As noted, the FAFSA doesn’t give you money. It’s a financial aid application form that determines a EFC “expected family contribution”. Really, you need to view that as the MINIMUM you will be expected to pay for the one year the FAFSA is good for. You need to complete need based financial aid applications annually in most cases.
  3. The vast majority of colleges that meet full need also require the CSS Profile or their own financial aid form. The exception is University of Chicago.
  4. The colleges will determine your financial need and need based aid. Really, that FAFSA EFC is used to determine eligibility for federally funded aid...not institutional (the college’s) money.
  5. Those colleges that meet full need for all are highly competitive for admissions. And if you are really a competitive applicant for those, you should be looking at at least a few colleges where you would get guaranteed merit aid, or are highly competitive for merit awards.
  6. What colleges are you looking at?
  7. As noted, are your parents divorced, self employed, own a business, own real estate in addition to your home? If no to all of those, do the net price calculators on EACH college site for schools you are interested in. This will give you an estimate of your aid at each school....and it will vary.
  8. When are you starting college?

And lastly…on another thread you mention Sinclair Community College…is this the one in Ohio? If so, find out the cost of attendance. It’s about $130 a credit and you will need to be a matriculated student to qualify for aid. If you are an incoming first year student, you can take $5500 in loans in your name only by completing the FAFSA form.

The FAFSA EFC has nothing to do with how much colleges will charge you to attend. It only tells you if you’re eligible for a federal Pell Grant of up to $6,000/year. If your EFC is over 6000, you won’t be eligible for Pell at all. If it’s lower then you probably will be.

For example, if your EFC is 3550 (it will probably be written 03550 on the FAFSA confirmation page), your EFC is $3550, so you may be eligible for a Pell Grant of up to $1450 per year. It would be paid out by semester, so you’d be awarded $725 in the fall and $725 in the spring. Pell money is sent directly to the school, so it would be deducted from your bill.

Unfortunately, that doesn’t have anything to do with how most colleges determine how much families can pay. Only a few schools can afford to offer large need based grants, and they require high stats to get in. The rest of the schools leave it up to the family to figure out how to pay the difference. The SUNY schools, for example, charge roughly $11,000/year for tuition + fees and another $12,000/year for room & board. That’s a total cost of attendance of $23,000. A student with a $0 FAFSA EFC would get a $6,000/year Pell Grant and they could take out the ~$5500/year federal student loan, but that only gives them $11,500/year. It’s enough to commute (if they can live with parents), but not enough to dorm. They’d probably have to work to pay for commuting costs, books, and personal expenses, but it can be done.

There are a couple other places to look for money. Some schools offer merit awards for stats, but those can be difficult to get. Another option is to see if your state offers grants to low income students. Ours does, but it requires a separate application. You can contact the financial aid office of your local community college to ask about how to apply for state grants.

If you find out you are Pell grant eligible and are an Ohio student you might want to apply to Ohio State. Pell eligible students receive a financial aid package that at least covers tuition and fees. If Ohio students do not get an admission to main campus they will admit to a regional campus. Colleges have net price calculators that estimate aid. Here is Ohio State’s https://sfa.osu.edu/incoming-freshmen/about-aid/net-price-calculator

Sinclair’s NPC
https://www.sinclair.edu/services/welcome-center/finaid/net-price-calculator/