'Tis the season to talk financial aid and the experts from our College Planning Center have been talking about financial aid with students and families, one-on-one, as well as in group presentations at local high schools almost daily since September and are still going strong.
If you were unable to attend one of our sessions or meet with us at our offices, we have recapped our Financial Aid 101 presentation to provide you with highlights of “What you need to know about financial aid”. We hope you find this helpful.
Terms & Acronyms
- FAFSA- Free Application for Federal Student Aid - fafsa.gov.
- CSS Profile- College Scholarship Service Profile is administered by the College Board is required by about 400 colleges and universities to determine aid eligibility for non-government financial aid. The initial fee is $25. Fee waivers are available for eligible students. (Additional schools cost $16 each).
- COA- Cost of Attendance, includes direct costs (those on your tuition bill) and indirect costs (such as books and living expenses). Examples: Tuition & Fees, Room & Board, Books & Supplies, and Transportation
- EFC- Expected Family Contribution, is determined by the government once you have filed your FAFSA. Many factors affect EFC, each having a different weight. Some of these factors include: parents’ and students’ prior year income, value of parent and student assets, size of household, age of oldest parent, and more.
Tip: You can use RISLA’s EFC calculator to estimate how much you will be expected to pay for college prior to receiving your official Student Aid Report upon completion of your FAFSA being processed.
Financial Aid Sources
- The federal government
- Your resident state
- School (college or university)
- Private business or organization
Aid Award Categories & Types
Merit-Based- awarded by schools for a talent, academics, athletics, etc.
- Need-Based- determined by mathematical formulas based on various student and family financial data
Tip: FAFSA submission determines need based federal aid eligibility and the CSS Profile may be requested to determine institutional aid at some private schools.
- Federal Pell Grant, maximum award is $6,195
- Federal Work Study, provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help contribute towards education expenses.
- Federal Supplemental Educational Opportunity Grant, awarded to students with exceptional financial need. Awards range from $100 - $4,000.
Tip: If you need assistance filling FAFSA for a CSS Profile, you can schedule a free one-on-one appointment with the college planning center.
Financial Need Eligibility Formula
Note: Financial need changes based on the choice of school and cost; your EFC remains the same in all financial need calculations regardless of school choice. Often schools cannot meet 100% of financial need, which creates a GAP. Three examples above.
Bridging the Financial Aid Gap
When scholarships and grants do not cover all financial need there are additional self-help sources to help pay for college.
- Amount awarded depends on the state you live in
- Application procedures vary
- To become eligible for consideration, a student must submit a completed FAFSA
- Students should contact the Financial Aid Office at the college they plan to attend for complete program details
Scholarships (Repayment not required)
Scholarships aren’t just for “star” students, scholarships are available to students with certain interests or professional aspirations, and more.
- Start local (RIScholarships.org)
- Never pay a service to find scholarships, typically a scam
- Expand your search beyond the internet: guidance counselor, newspapers, and library
- Invest the time, a thorough scholarship search cannot be completed in one day
- Awarded by college or university based on financial need
- School may use federal or institutional methodology to determine need
- Grant amounts vary based on school’s available funds each year
- Awarded to students with financial need according to FAFSA
- No interest added to principal balance while student is in school
- Awarded to students who cannot prove financial need according to FAFSA
- Interest accrued and added to principal balance while student is in school
|Year in School||Annual Limit
(Subsidized & Unsubsidized)
|Additional Unsubsidized Loan Limit (Independent Students Only)|
|First Year||$3,500 Sub & $2,000 Unsub||$6,000|
|Second Year||$4,500 Sub & $2,000 Unsub||$6,000|
|Third - Fifth Years||$5,500 Sub & $2,000 Unsub||$7,000|
|Graduate Students||$8,5000 Unsub||$12,000|
- Borrow up to the COA minus financial aid award
- 7.08% Interest rate for academic year 2019/2020
- PLUS fee 4.248%
- 10-Year repayment term
- Can defer principal payments until 6 months after graduation
- Must arrange to pay interest during deferment or it will be added to loan principal
- Offered through non-profit agencies throughout the U.S., such as RISLA
- Typically, very competitive interest rates, often fixed
Tip: Be sure you understand rates, any fees, and terms with state-based lenders before you borrow.
- Offered by banks and other for-profit lending organizations
- Repayment may be deferred or immediate
- Usually a variable interest rate, but some fixed rates are offered
Tip: Rates, fees and terms vary per lender be sure to investigate thoroughly.
- Some schools have institutional loan programs, check with your Financial Aid Office
- Terms will vary from school to school
Tip: Be sure you understand rates and terms and know that you are not obligated to accept a college-based loan just because it is listed on your financial aid award. This is optional for your consideration.
Bridging the gap can be stressful and researching and asking questions will be the best way to make informed decisions. We have talked to thousands of families throughout the years and have put together a guide to help you borrow responsibly, if borrowing is needed, with your families’ best interests in mind.
Now in conclusion, take a breath. This is a lot of information and can be overwhelming. That is why we are here to help. If you would like speak to one of our experts regarding financial aid and filing your FAFSA or CSS Profile, schedule an appointment at the College Planning Center soon. We look forward to discussing a plan that works for you!