<p>Hi Overrun,</p>
<p>Welcome to CC.</p>
<p>Financial aid is calculated as follows:</p>
<p>Cost of Attendance -EFC (parents and students) = need</p>
<p>The parents EFC (expected family contribution is based on their income and assets.</p>
<p>Need can be met in the following manner:</p>
<p>Self Help aid consisting of
Subsidized (gov't pays the interest whild student is in college) loans, Perkins loans<br>
work study</p>
<p>Other Aid
Scholarships/grants (do not have to be repaid)
Other loans</p>
<p>Some schools meet 100% of your demonstrated need. This means that if your demonstrated need is 30,000 the total amount of grants/scholarships, loans and work study will equal the $30,000 of demonstrated need. Note that all financial aid is not created equally as a school can pretty much give you all loans and will have still met your demonstrated need.</p>
<p>A school that does not meet 100& of your demonstrated need is known to GAP</p>
<p>The students EFC is based on income, assets (35%) and summer earnings </p>
<p>
[quote]
. Do they hold the asset value of your house & property against you? We own alot of land with our house & would like to know if they hold this against you in assets?
[/quote]
</p>
<p>Yes</p>
<p>
[quote]
So if another family earned MORE than us -but was in debt, they would get more help ?
[/quote]
</p>
<p>No, debt other than debt of catrostrophic medical expenses not covered by insurance is not counted in the FA process. So if people rack up a ton of consumer debt it does not help their cause.</p>
<p>
[quote]
This EFC they talk about, is that the $$ amount you are EXPECTED To pay -whether it be getting loans or paying cash (for ONE year only) or the whole length of the education (3 to 4 yrs)?
[/quote]
</p>
<p>The EFC is basically set by the federal government guidelines. If you file the FAFSA only, a school using the federal methodology, it is a pretty straight forward calculation that looks at your income, assets and number of kids in college. If your school uses the CSS profile they do look more closely at your income, number of kids in college, private secondary school, based on your age they protect a portion of your income and they usually allocate 5% of your assets (home equity, etc )to be used toward meeting your EFC.</p>
<p>If your family cannot meet their EFC, they may have to borrow using the equity in their home or taking out a PLUS (parents) loan. Parents can borrow up to the full cost of their childs education. Plus loans are based on the parent's creditworthiness. If the parents are not eleigible for a PLUS loan than the student can borrow additional monies through an unsubsidized loan.</p>
<p>
[quote]
Do you apply every year (again) for financial aid?
[/quote]
</p>
<p>yes, you must reapply each year and the EFC changes based on your financial situation. Usually the student contribution and loan amounts will also increase each year in line with the borrowing guidelines.</p>
<p>For subsidized loans the borrowing rates are as follows:</p>
<p>Freshmen $2625
Sophmore $3500
Junior/senior (or until completion $5500)</p>
<p>
[quote]
Must you CHOOSE a college and then do this process, or can you apply for aid for a FEW colleges and then decide the one you want depending on what it will cost out of pocket??
[/quote]
</p>
<p>You need to file for Financial Aid for each school that your student is applying to. Almost every school requires the FAFSA for any kind of federal aid (stafford loans, pell grants, SEOG). Some schools may require you to file the FAFSA in order to get merit aid (academic or athletic scholarships).</p>
<p>Once the college acceptances come in, you and your child should review each package and then make a decision balancing what meets the students educational needs and the family's finacial need. Some parents are straight forward with their children regarding financial constraints in the cost of education and what they can and will realistically pay for this education. Personally I feel that this conversation needs to be had by all parents and applicants before they get their heart set on a school only to find out that it is financially out of reach.</p>
<p>As parents this is a personal decision because no one knows your situation as well as you. many parents are adverse to taking out large amounts of debt at a time where they may be looking to wrap up their work life (retirement) or because of a precarious economy.</p>
<p>It is most important for parents and students to read the financial aid policies of the schools which they are interested in. You can go to the library or bookstore and there are a bunch of books that talk about colleges and financial aid.</p>
<p>I think that parents should look at a wide variety of schools including their state schools. If you have a stellar student you should also seek out schools that give good merit aid where student may be at the top of the applicant pool. If you have a good student, don't be afraid to look at the elites and Ivies because they(harvard, Yale, Princeton) are now offering reduced EFC for families making under $60,000 per year . The other side of the coin is that they are a crapshoot for every one. At schools with large endowments yoru EFC could be lower than the fafsa EFC. these schools tend to meet 1005 of your demonstrated need giving large amounts of grant aid. However they tend to be very selective.</p>