The Awarding of Financial Aid

Once the aid officer has calculated the financial need, the goal is to create a package of financial aid awards that together add up to need amount.

There are three main "types" of financial aid.

  • Grants and Scholarships - funds that do not have to be repaid by the student
  • Loans - money lent to the student (or student's parents) to pay for college
  • Work study - funds a student earns through a campus sponsored work program

In addition to these main categories of financial aid, specific aid programs can be need based or non-need based.

  • Need based financial aid programs require a student to demonstrate financial need
  • Non-need based programs can be awarded to students even when there is no calculated need - i.e., the student's EFC (or combination of EFC and awarded financial aid) exceeds the cost of attendance

The amount of each award is based on a number of factors including: institutional or regulatory policies for minimum and maximum amounts, amount of funds available to the institution, and eligibility of the applicant.

Sample Situations:

Private College:

Cost Amount
Tuition & Fees $22,500
Room and Board $7,500
Books $2,000
Transportation $2,500
Miscellaneous $1,000
TOTAL $35,500

Public College:

Cost Amount
Tuition & Fees $5,000
Room and Board $2,000
Books $750
Transportation $1,250
Miscellaneous $1,000
TOTAL $10,000

COA (Cost of Attendance) minus EFC = Need

Family 1 has $15,000 EFC

  • $35,500 COA -- Family 1 EFC of $15,000 = $20,500 Need for Financial aid at high priced, private college
  • 10,000 COA -- Family 1 EFC of $15,000 = NO NEED for financial aid at lower priced, public college

Family 2 has $1,000 EFC

  • $35,500 COA -- Family 2 EFC of $1,000 = $34,500 Need for Financial aid at high priced, private college
  • 10,000 COA -- Family 2 EFC of $1,000 = 9,000 Need for financial aid at lower priced, public college

Finally, sample awards will be shown for the sample needs shown above.

Family 1 - Private College (assumes student is a 1st year undergraduate):

Aid Program Amount
Institutional Scholarship $10,000
Work Study $2,000
Federal Subsidized Stafford Loan $2,625
Federal PLUS or Alternative Loan $5,875
TOTAL $20,500

Family 1 Public College (assumes student is a 1st year undergraduate):

Aid Program Amount
Federal Unsubsidized Stafford Loan $2,625
TOTAL $2,625

*The unsubsidized loan can replace some of the family contribution even when there is no need. The PLUS loan is also available to families without need to replace some of the EFC you are expected to be able to pay.

Family 2 Private College

id Program Amount
Institutional Scholarship $15,000
State Funded Scholarship $2,000
Private Scholarship $3,000
Federal Pell Grant $1,500
Federal SEOG $1,000
Work Study $2,000
Federal Subsidized Stafford Loan $2,625
Federal Perkins Loan $2,000
TOTAL $29,125

*A PLUS or alternative loan can be used to make up the difference between the total cost and amount of aid listed above if there are no personal savings available.

Family 2 Public College

Aid Program Amount
State Funded Scholarship $1,500
Federal Pell Grant $1,500
Federal SEOG $1,000
Federal Subsidized Stafford Loan $2,625
Federal Perkins Loan $2,000
TOTAL $8,625

Based on the examples above, you should have a better understanding of how it all comes together. Now, continue on to our Financial Aid Calendar to learn more about when all this takes place...