With the average annual* total cost of college for 2012-2013 rising to $21,683 at a public four year school (in state rates) and $42,962 at a private four year school, receiving financial aid is a must for most students.
The good news is there are many sources for financial aid - the federal government, state government, the college, or private organizations. The bad news is that the maze of opportunities and the complexity of governing regulations make it frustrating for many parents and students. For a crash course on acronyms and the general process, look no further. You too can start speaking the financial aid language in no time.
Financial Aid: The Top 10
The Acronyms:
- FAFSA: The Free Application for Federal Student Aid must be completed for students to apply for federal student aid. Visit fafsa.gov to get an understanding of the process, get deadlines and apply for aid.
- SAR: The Student Aid Report results from the completion of the FAFSA and provides the details of your financial aid profile. This is really important, so pay attention to what it says!
- EFC: The Expected Family Contribution is a number calculated that determines how much the family could possibly (not must) contribute and therefore how much financial aid the student is eligible for. This will be provided on the SAR.
Types of Financial Aid:
- Loans will need to be repaid with interest. As opposed to Subsidized loans, Unsubsidized loans means that the student is responsible for interest accrued during college. There are also private loans available but can have higher costs.
- Grants usually do not need to be repaid and can be “need” or “merit” based.
- Scholarships usually do not need to be repaid are often merit based.
- Work-Study Funds consists of money earned through approved student work agreements that are directly applied to tuition and fees.
Other Loan Terms:
- Deferment is an option that allows the student to withhold payments on selected loans based on certain qualification.
- Loan Forgiveness: Certain career paths (like public service) or employers may include automatic payment of loan principal and/or interest if the student fulfills certain employment requirements with the organization. This isn’t typical so don’t get too excited.
- Income Based Repayment: Though rules are constantly changing, some federal loans tie monthly payment amounts to income earned by a student after graduation.
The FAFSA for 2015-2016 is available starting January 1, 2015. Complete the application as soon as possible as financial aid money is awarded on a first come, first served basis. Deadlines for state financial aid will vary by your state so be sure to check those out too.
Other helpful US Department of Education websites
*according to the National Center for Education Statistics.
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