College Financial Aid

 WHAT IS COLLEGE FINANCIAL AID?

Finding a way to pay for college is often the biggest challenge a family will ever face. Very few people have the financial resources available to pay the complete cost of a college education. In fact, about 3 out of 4 full time students receive financial assistance to help cover college costs.

The purpose of financial aid is to help you meet the college costs and allow you to choose the college that is best for you, regardless of its cost. Your family`s financial circumstances, not the price of the college you plan to attend, determine the amount expected from you and your parents. This amount is determined by federal formula and is referred to as EXPECTED FAMILY CONTRIBUTION. Calculations taken into consideration in determining this number include such elements as family income and family assets along with numerous other factors. The expected family contribution, once determined, is subtracted from the TOTAL COST of each college and the difference between these two numbers is referred to as FINANCIAL NEED.

There are two ways that a family`s Expected Family Contribution (EFC) and aid eligibility is calculated. The first is FM, Federal Methodology, which is used to award federal (and often state) funds. The aid application form for FM is the FAFSA (Free Application for Federal Student Aid). Federal aid is available at both public and private colleges. At many public colleges, government funds provide the only aid money available. The second method for calculating EFC is IM, Institutional Methodology, which is used to award private college aid dollars. Schools that make aid awards from their own private institutional (IM) aid money want more family financial information than FM requires. Most important, they count home equity, which is not considered by the federal aid formulas. Many colleges that use IM require the CSS PROFILE aid application form. Our planning gives you information about your Expected Family Contribution using both the Federal Methodology and the Institutional Methodology.

MEETING THE NEED - Once your need is established by subtracting your EFC from the total cost of college, the financial aid administrator then sets up a financial aid package. These aid packages may contain grants and scholarships, student loans and workstudy in different combinations. Even though your family may be "eligible" for the amount of aid needed not all colleges are able to provide the full amount. If full aid is not awarded, there is an aid "gap" (unmet need). Parents of dependent students may borrow through the Plus Loan
Program to help pay EFC and to cover any aid gap.

NEED AND MERIT

Federal aid and most private aid are based on financial need. The college`s Cost of Attendance (COA) minus Expected Family Contribution equals "Need" (eligibility) for aid. Need-based financial assistance is sometimes available for families with relatively high incomes. Depending on such variables as Cost of Attendance, asset values, and number of children in college. Aid that is not based on financial need is known as "merit" aid. It is used to attract students that college admissions officers hope to enroll. It may be based on academic ability, musical talent, home state or other special qualities of the student. Athletic scholarships are an example of merit aid. For student`s who aren`t eligible for aid, merit awards will be included in the aid packages.

FINANCIAL AID PACKAGES

Financial aid award packages are developed at the discretion of the College Financial Aid Office and may vary by institution. College Financial Aid Officers hold the big checkbook and prepare financial aid packages for students who have requested aid. Of course, schools with the most funds will be in a position to award more attractive financial aid packages to meet the demonstrated need.

In any case, the award packages may include a mixture of GRANTS, SCHOLARSHIPS, LOANS AND WORK/STUDY opportunities.

The distinction between the awards is clear. Grants and Scholarships awarded by the school are gifts that need not be repaid. Loans must be repaid. Work Study programs consist of employment opportunities arranged by the school while the student is attending college. Of course, a financial aid package made up of more grants than loans would be more beneficial to the recipient. It is important to remember that in many cases, financial aid is given out on a first come-first serve basis. So it is important that all forms are filed early.

SAVING FOR COLLEGE

The purpose of this planning is to give you a better understanding of what your financial responsibilities will be before the student enters college. By ultimately positioning a family`s income and assets properly their EFC can be adjusted in a manner so that they can qualify for their fair share of college financial aid.

FINANCIAL AID NEEDS ANALYSIS AND FORM PREPARATION

RON-TAN ENTERPRISES, INC. offers a service that evaluates your current eligibility for financial aid, suggests methods of increasing your eligibility for aid, and assists in the preparation of your Financial Aid Forms.

If you would like to use our financial aid planning service or our financial aid form preparation service please call us at (800)491-9630 or e-mail us at atanenblatt@royalaa.com

 

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