When researching financial aid options to help pay for college, students may stumble across unfamiliar financial aid terminology and acronyms used in the information. For your reference, we have provided some of the most commonly used financial aid terms, abbreviations and acronyms below.
To begin applying for financial aid fill out the FAFSA. You must submit a FAFSA to qualify for federal funding . After sending in your FAFSA, the Central Processing System verifies your information. The Central Processing System consists of government agencies such as Social Security Administration and the Department of Immigration. After your information has been evaluated, the government determines your level of need and, the amount of aid you can receive, and where the money will come from. The formula for determining financial need is COA – EFC = Financial Need. FAFSA gives parents and students access to available FSA funds. FAFSA is not financial aid, it is the form used to request financial aid. In order to receive financial aid from the federal government, you must submit your FASFA.
Available funds are always less than the level of financial need. Federal funding also fluctuates every year. Fluctuations in funding are caused by the state of the economy and college tuition rates.
After submitting your FAFSA form, the government controls how much aid you qualify for, and where the money comes from. Financial aid comes from multiple assistance programs. The federal government also expects that students or parents are able to take out student loans. A typical financial aid package includes a Pell grant, a need-based state grant, a SEOG, FWS, a direct loan and, a Perkins Loan. Grants are not repaid, however funds supplied by the FSL must be repaid.
Take advantage of FSA programs by through assistance from FFEL or a Direct Loan, whichever is designated by your university.
FFEL program subsidies are through private lenders such as a banks or credit unions. A Direct Loan subsidies are directly through the government.
Pell grants are gifts from the federal government. All students with unmet financial need qualifies for the program, however qualifying does not guarantee you will receive a Pell grant. The amount in the grant is determined by the cost of education, the student’s enrollment status, and the EFC. Part-time students are also eligible. Pell grants are available to undergraduates without a degree.
Financial assistance through the state is provided by LEAP. In this program, the financial contributions of the state are matched by the federal government. The grant money is accessed through campus-based programs.
Federal Supplemental Educational Opportunity Grants: Federal Supplemental Educational Opportunity Grants are awarded to students with considerable need for financial aid. The amounts awarded range from $100 to $4,000 dollars per year. The amount depends on the financial need and available funding that academic year.
Federal Perkins Loan Program: Federal Perkins Loans are for students with exceptional financial need and are available to both undergraduates and graduates. There is no accumulative interest while the student is in school. Loan repayment does not start until nine months after graduation.
Federal Work Study: Federal Work Study is available to both undergrads and grad students. Students who participate in this program earn money toward education expenses through a campus job. Students work up to 10 hours a week and earn at least minimum wage.
There is a difference between federal aid and campus-based aid. If you are eligible for federal aid, that does not guarantee your eligibility for campus-based aid. Financial need is calculated differently for each program. For example, the federal government does not include home equity in the EFC resulting from your FAFSA, but campus programs do, affecting your eligibility for financial aid The difference in this calculations is to separate the needy from the extremely needy.
If you are over the age of 24, married, or have children, you are an independent. Independent students do not qualify for the Federal Student Aid program. Veterans and wards of the state, are also excluded from the FSA program. FSA is only for dependent students needing resources for college. There are other forms of student loans and scholarships available for independent students who need help paying for tuition. Also understand that drug abuse effects your financial aid eligibility. Drug related convictions disqualify you from the FSA program, unless you have gone through rehab at a state-approved institution.
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