<p>Alright, so how does Financial Aid work? For example, Collegeboard lists American University's Tuition as $28000 and the "average financial aid package" as $25000, which would lead you believe that you're only paying $3,000 + room and board costs. Obviously, this is not correct. Can someone explain to me what all of this means?</p>
<p>Actually, that is somewhat correct. Here's how financial aid works:
Cost of attendence (tuition, room & board, books, travel) - what your family can pay ("expected family contribution" or EFC) = financial aid</p>
<p>Financial aid usually consists of grants (free money), loans, and work-study. In addition, most colleges expect you to work and earn money during the summer. Although your family may pay $3000 a year, for example, you may end up $20,000 in debt when you graduate, so be careful. Outside scholarships can be used to reduce or eliminate loans.</p>
<p>Hmm...so how would you be in debt then? I mean $13,000 (room + reduced tuition) isn't much to pay per year in comparison. Would it be by slacking off on work-study hours, or...?</p>
<p>Debt usually comes from the loans. Most financial aid packages include about $5000 worth of loans per year.</p>
<p>Oh ok. Thanks for the information.</p>
<p>Nother finaid question - let's say the family contribution is $10,000 a year, but that will all have to be paid for by the student. So, he will have take out a 10,000 dollars a year in loans. Student also has a perkins loan in his fin-aid package, but no subsidized stafford loan. So, he can apply for a stafford unsubsidized loan of max $5000 a year. Parents have poor credit, so a plus loan is unlikely. Will a student with no credit history be able to get a private loan to cover the other $5000?</p>
<p>Using the scenario that you posted :</p>
<p>the cost of attendance (Tuition Room board fees, etc) are :</p>
<p>Tuition<em>: $27,552
Fees: $467
Average Room: $6,970
Average Board</em>: $3,730
Books<strong>: $600
Transportation</strong>: $700
Personal**: $600 </p>
<p>total cost of attendance for one year at AU $40 619</p>
<p>Even with if you were to get the average FA package of $25,209 </p>
<p>You would have to come up with $15,410 (40,619-25,209)</p>
<p>To add on to warblesrules post:</p>
<p>If you had a demonstrated need of $25,209 is calculated using a number of components (individual mileage may vary):</p>
<p>Federal gift aid (if eligible) Pell, SEOG</p>
<p>Gift aid ( AU scholarships/grants) $13,791
Self help aid:
Work study $1,646
Loans (sub/ unsubsidized stafford , perkins loans) 5722</p>
<p>Total $21,159 (the difference of $4,050) could be if the person was eligble for Pell which would be federal gift aid.</p>
<p>If you were not eligible for pell this could be a gap meaning your out of pocket cost could be : $19,460 (4050 +15410) for one year at american</p>
<p>From American's Common Data Set:</p>
<p>[ol]
[li]Number of degree-seeking freshmen undergraduate students -1206</p>[/li]
<p>[li]Number of students in line a who were financial aid applicants -890</p>[/li]
<p>[li]Number of students in line b who were determined to have financial need -690</p>[/li]
<p>[li]Number of students in line c who received any financial aid -621</p>[/li]
<p>[li]Number of students in line d who received any need-based gift aid (which does not have to be repaid) 476</p>[/li]
<p>[li]Number of students in line d (621 students) whose need was fully met 307 **</p>[/li]
<p>[li]On average, the percentage of need that was met of students who received any need-based aid. 74% ** The school gaps</p>[/li]
<p>[li]The average financial aid package of those in line d (621 students). $25,209 **</p>[/li]
<p>[li]Average need-based gift award of those in line e $13,791 </p>[/li]
<p>[li]Average need-based self-help award (work study, subsidized stafford loans, perkins loans etc) $7,368 </p>[/li]
<p>[li]Average need-based loan - $5722 **[/li][/ol]</p>
<p>Krusty:</p>
<p>If you were to attend a college that had an EFC of $10,000,</p>
<p>Your EFC consists of 2 components:</p>
<p>the parents contribution (based on your parent's income and assets , what they are expected to pay)</p>
<p>and</p>
<p>The student contribution (based on your income/assets or money should you are expected to contribute from summer earnings).</p>
<p>If you cannot make you EFC, the school does not make up the difference.</p>
<p>If you were to get a subsidized stafford loan as a freshman, the maximum you could borrow is $2625 freshman year</p>
<p>The only way you could get an unsubsidized stafford loan is if your parents applied for a PLUS loan and got turned down. If your parents have been turned down for a PLUS loan you can borrow an additional unsubsidized $4,000 the first two years and $5,000 the remaining years</p>
<p>2625+4000= $6625 (short 3375)</p>
<p>My advice is if you are not currently working, you have to get a job, take on extra shifts over the summer/ vacations to help chip away at some of this debt. Also apply for out side scholarships (even if it is only 250-500) because you really need to chip away at the outstanding debt. </p>
<p>Once you become a sophmore, look into be coming a RA (resident advisor) because at some schools it supplies you with free room and board.</p>
<p>all the best.</p>
<p>Thank you sybbie!</p>