In case you're thinking of applying for financial aid but don't know anything about it, then learning about how does financial aid work should be your main priority. Read the following article to know more:
College education in the USA is expensive, and many times parents don't have the finances to afford a college education for their children. That is when financial aid comes in. How does financial aid work? Financial aid works on the theory that after the most affordable amount is paid by the parents as the tuition fee, the remaining margin is supplied through the financial aid program. The aid was built around the theory that education should be equal for all, that no dearth of opportunities on account of finances should hinder any dreams and pose any problems. It is due to this fact that many students in the US get into college with the help of financial aid.
The Workings of Financial Aid
There are a few financial aid requirements that need to be fulfilled if one is to be eligible for financial aid. Here are some pointers that need to be understood in accordance to financial aid and its workings.
The FAFSA Form
The first step in getting financial aid is to fill the 'Free Application for Federal Student Aid (FAFSA)'. This involves writing a financial aid appeal letter. This should be done as early as possible after your high school is over (as early as possible after 1st January). Look at a few financial aid appeal letter samples online and then download a form from the net for quick processing. Or you could even collect one from the school, it is usually available with the counselor. This form will need you to supply your personal information and answer some financial aid questions like your dependence state, and other details, along with your parents' information.
The financial aid letter is important because it helps to calculate the amount of aid that you are eligible for. This is only done after the need analysis process is
completed by the government.
The need analysis process calculates the EFC (Expected Family Contribution) which will determine the amount that you'll need to pay towards your education. The EFC always remains the same. Once the need analysis process is complete, a Student Aid Report (SAR) will be sent to you which will give you a list of the kind of aids that you are eligible for.
Types of Financial Aids
Depending on the list of the schools that you have been supplied with, you can decide which school you want to attend. The Cost of Attendance (COA) is different for different schools and involves tuition, books and other such educational expenditures. The kind of aids will also be specified which include grants, loans, scholarships and work study programs. Your final financial aid will be determined by subtracting the EFC from the COA.
A government grant will allow you to gain financial aid for college without having to pay back anything. These are awarded by state and federal governments and individual colleges. Scholarships are also granted on the basis of the child's merit.
Loans need to be repaid but the interest rates are quite low and are usually controlled by the federal government. The advantage of this is that the interest does not start accumulating till after the child has graduated. Make sure you choose your loan plan well and do not end up applying for something that is too high for repayment later.
The government makes available work study programs by which the student can carry out part-time jobs and work in that way to pay for the fees and other expenses.
I hope that has cleared all your doubts about financial aid and how it works. You can always speak to your school counselor about the options that are available for you. Financial aids make it possible for everyone to get the kind of education that they deserve. So make the most of it and get the best education that you can.
Category: Personal Finance