Do I have this right?
COA = Tuition, fees, room and board, books, incidental expenses, transportation as calculated by the university. The public school offers substantial merit aid that brings this COA to, for example, $4,000.
The FAFSA determines EFC to be $3720. The student’s need, then, is determined to be $280? The Pell Grant would be for that amount, as opposed to the amount FAFSA calculates the student is eligible for ($1280). Grants and subsidized loans are not disbursed to cover the EFC, is that correct? Is it also correct that the school determined COA starts out the same for everybody until financial aid is added? In other words, the COA cannot be calculated differently for different students to create more “need” (travel costs adjusted, etc)?
First of all, it’s important to understand that need is not necessarily met. Now that this disclaimer is out of the way …
In the case above, the student may receive a combination of aid up to the COA … but the amount of NEED BASED aid can only be awarded up to COA-EFC-all other aid. If the remaining need after the merit aid is $4,000, the student may receive up to $4,000 in aid. If the Pell award is $1,280, the student will receive the $1,280. That leaves Need at $2,720. Because the remaining Need is less than the EFC, no additional need-based aid can be awarded … but $2,720 in unsubsidized loan can be awarded.
The COA is the same for everyone in a particular group (such as dependent student living on campus). The only way it can be changed is if the student submits a request for a budget increase and if the school allows budget increases for the particular request. Only certain items in the budget can be adjusted, per federal regulations.
Loans can cover the EFC … but they would be unsubsidized.
You should get the $1280 Pell grant if that’s the correct amount for a $3720 EFC, I didn’t look it up. Federal grants can’t exceed COA, they can exceed calculated need if there is merit involved and thus reduce your actual contribution. Schools generally will have 3 COAs, one for on campus living, one for off-campus living and one for commuting students living at home. No the COA can’t be different for different students in the same category.
Okay. I think I understand. Let me provide three possible scenarios. The EFC and Pell numbers are approximate, but close to what our initial FAFSA determined.
1.) Student has been offered a “full scholarship” which covers tuition, fees, room and board, $1000 stipend, iPad, etc. based on academic merit. I don’t know how extras like “cost of an overseas study experience,” iPads, cash stipend, coincide with COA, but presumably there will still be a couple of thousand dollars of COA that are not covered. If the remaining COA is less than the EFC, no need-based aid would be awarded?
2.) Student has “stackable” merit scholarships at another college that will leave about $5,000 remaining COA. He would receive Pell Grant and subsidized loans in an amount up to the difference between EFC and COA?
3.) Student is accepted at school that offers to meet 100% need. If school’s COA is 50K and school offers 45K in grants/scholarships, student could be granted remaining 5K in combination of subsidized loans and Pell Grant?
I guess what I’m trying to figure out is what the difference is between “merit aid” granted by public schools as opposed to “need-based” aid offered by private schools and how it is affected by EFC. Would a school like Michigan where merit-based scholarships and grants have a need-based component use this same formula?
Sorry for the confusing questions…just trying to determine where to visit and what schools it would be worth additional effort to pursue given the mix of schools to which my son has already applied.
Pell is an entitlement…you get it whether you have remaining need or not.
^^^^^Sometimes yes, sometimes no (probably more often yes).
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Pell is awarded, but as annoyingdad states, it might be considered part of the merit money (that does happen). If not, though, the Pell would be paid even if there is no remaining need (because, as mom2collegekids states, it is an entitlement).
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Yes.
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No, because of the EFC. Using your initial scenario, the student would be eligible to receive need based aid totaling $5000 - $3720 = $1280. If the student is eligible for $1280 Pell, need is then completely met. The student would be offered $3720 in an unsubsidized loan.
If the Pell amount was, say, $1400, the student would still receive the full $1400 Pell. The student would also be offered $3600 unsub loan.
If the Pell was, say, $500, the student would receive $500 Pell, $780 sub loan, and $3720 unsub loan.
Michigan uses Profile for incoming students, so the package may vary from straightforward FAFSA-EFC based estimates.
Here is how aid works: COA - EFC = eligibility for all aid other than unsubsidized loans. “All aid” includes merit scholarships.
Aid can only be awarded up to the COA. If aid exceeds COA, it must be reduced. The exceptions are if all is is merit only (school merit would not exceed COA, but a student might have some outside scholarships to add to school scholarships) - and if Pell added to merit aid exceeds COA (although some schools will decrease their merit award to keep this from happening). If there is merit and/or Pell that adds up to COA, there would be no need based aid/no loans (even unsub) awarded.
For need based aid…the EFC cannot be paid for in the vast majority of cases using the financial aid money. Usually the Pell Grant is included in the need based financial aid package awarded by the school. They would give less of their institutional funds in most cases meaning that the Pell would enable to school to give less institutional money to meet need.