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 Financial Aid

With reports of steep losses of personal fortunes, market instability and other gloomy indicators of a nationwide economic downturn, financial aid offices at colleges and universities around the nation are preparing for the anticipated torrent of requests from worried students and families.

But despite the downturn and continued interest in federal grants and loans, financial aid offices stress that money will continue to be available and students should seek out assistance as soon as they are admitted.

One important fact for college students to remember is that there is no shortage of federal student loans for eligible applicants, despite the slumping economy. Students looking to supplement college costs with loans should always seek out opportunities like scholarships, grants and federal loans before applying for a private loan. Private loans carry higher interest rates and less room for forgiveness.

Of course the first step to finding out about available federal financial aid is filling out the Free Application for Federal Student Aid (FAFSA), but many students and families may still have more questions once they receive their aid status.

“Always ask the financial aid office if you’re unsure of whether or not an award is a loan and what type of loan,” said a representative from the Institute for College Access and Success.

According to the representative, Congress and the Department of Education are pursuing ways to standardize the structure of award letters and enhance comprehension of the documents. Currently the award letters are not standardized, but many contain variations on the following components:

  • Cost of attendance (COA): a figure based on tuition and fees, room and board, books and supplies, health insurance/fees, transportation, and personal expenses.
  • Expected family contribution (EFC): This number is generated from information you fill out on the FAFSA. It should remain generally consistent from school to school. Loans and work-study earnings are also a contribution from the family.
  • Financial Aid: This number consists of both gift aid and self help aid (need based and non-need based federal loans, work-study employment, and private non-need based loans).

For more information on federal and private loans types, read Focus on Financial Aid.

A senior consultant at Murray and Associates and the National Center for College Costs, said that students should seek out financial aid offices even before they are aware of their aid award. “We strongly suggest, long before the student fills out the FAFSA, to contact the financial aid office.”

One reason to contact the school quickly is to determine the actual award money available. “Just because the federal form gives the family an estimated family contribution, that doesn’t mean every college can honor that calculation and fully fund their financial need.”

The expected family contribution (EFC) consists of the available amount to be paid by the family’s income and assets, the amount the student can contribute and any scholarship funds. Read more about the steps to applying for and receiving financial aid.

Open communication with a financial aid office allows students to learn the details of their particular institution. Since all schools have different aid capacities and rules and regulations, the student should never assume anything until contact is made with the office. Especially in this economic climate, Hall said, because colleges are making tougher decisions about where to inject funding: into new programs or into the aid office.

Even if a student has a firm grasp of the information contained in the award letter, there could still be more information to obtain. For instance, most letters do not include information on future aid packages, like renewability and possible changes in the proportion of grants vs. loans in subsequent years.

A representative at UCLA, said in addition to contacting the financial aid office early on, students should feel comfortable contacting the office via email, but should never send confidential information electronically.

Students should also notify the office of any changes to their financial status. And if the student is making an appeal for additional aid, documentation that outlines the additional need is always necessary.

Colleges can also change their aid amounts from year to year, so be sure to follow up with the office annually.

If a financial award letter arrives with a lower number than expected, students still have additional funding resources. The student still has the opportunity to finance college with unsubsidized and Plus loans to fill the gap. Work-study programs also allow the student to pay for college with valuable on-campus employment experiences.

More Resources:

NACAC's list of trusted resources for information about paying for college​.

IBR Info:  Information on new federal student loan payment and forgiveness programs.

NACAC’s Guide to the College Admission Process

Written by Sean Nyhan
Updated February 2012


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