Understanding how financial aid works can seem a bit difficult when you are a newcomer to the system. How do I apply? Where do I begin? What will I need to apply? Among the many questions you may have, a crucial part of the process that will affect exactly how much college financial aid you will get is your eligibility.
There are a few components that are calculated to determine your situation and how much financial aid you will be awarded. Here is a look at how financial aid is determined in Rhode Island.
There are two methodologies for determining financial aid eligibility; federal and institutional. The federal method is the only method that schools can use to award federal funds and is put in use when you file the Free Application for Federal Student Aid (FAFSA). This method can also be used to calculate awards using institutional funds.
First, your Cost of Attendance (COA) will be accounted for based on the school that you have chosen. This includes tuition, books, school supplies, travel costs, and other expenses.
Next, your Estimated Family Contribution (EFC) will need to be determined to find how much you can put toward the bottom line. A formula used to determine your EFC is established by law and will assess your family's financial strength by looking at the student and parent's income, assets and benefits. The size of your family and how many members will be attending college for the year is also factored into the equation.
EFC is then subtracted from the COA to dictate how much need-based aid you are eligible for.
Although many schools use the federal methodology to establish federal aid amounts, some schools, mostly private institutions, also use an institutional methodology to determine how they award their own funds. The institutional "EFC" is determined when you complete a CSS Profile or school financial aid application.
The institutional methodology uses a different formula, again taking into account factors such as parent and student income and family assets, as the deciding factor in who will be awarded the private funds. This method for determining financial aid is used by hundreds of institutions and programs to allot funds fairly to deserving individuals. Governed by financial aid practitioners, economists, and researchers, the institutional methodology is kept current and adjusted as needed.
Once you know how each system works, you can get a general idea of how much aid you can look to receive.
Still confused about financial aid? There is no need to stay in the dark. Free help is available to get you on the right track to funding your child's college education. For students in Rhode Island, let the College Planning Center of Rhode Island assist you face-to-face with filling out the FAFSA or CSS Profile. This help is totally free.
Want to learn more about financial aid? Get started with Financial Aid 101.
To get free help completing your FAFSA or CSS Profile, book an appointment with one of our experienced college planning counselors.