Do you want to know How is financial aid calculated for college? Start planning early for how and where to obtain financial aid for your college. Financial Aid eligibility is based on a student’s financial need. Which is the difference between the college’s cost of attendance and the student’s expected family contribution.
If you applied to different colleges, you might see that you receive different financial aid offer from different colleges. How is this financial aid calculated? let’s take a look.
Each college’s financial aid office decides how much financial aid you are eligible to receive. How come? They take several factors into consideration.
How is Financial Aid Calculated for College?
Your Eligibility for financial aid depends on several factors, which include your expected family contribution, what year you are in school, your enrollment status, and the cost of attendance as I have stated before.
We have been hearing the word financial aid, what does it mean. Financial Aid is any college funding that does not come from family or personal savings or earnings. It can come through the form of Grants, Scholarships, work-study jobs, and federal or private loans.
Financial aid can be used to cover education expenses, things like room and board fees, tuition fees, books and supplies, and transportation.
Financial Aid Calculator
The Financial Aid Calculator is calculated according to the student’s need, it is between the college’s Cost of Attendance (COA) and the student’s Expected Family Contribution (EFC).
What does Cost of Attendance (COA) mean?
Your cost of attendance is the total amount that college will cost you for the year. The two and four-year colleges calculated your COA to show your cost of college for the fall and spring semesters.
Your COA is based on Tuition, fees, room, books, board, supplies, equipment, transportation to/from college, and miscellaneous expenses.
What does the Expected Family Contribute (EFC)?
The Expected Family Contribution is the amount that your family is expected to contribute to college. The EFE is calculated from the information you give when you fill out the FAFSA.
The number takes into account your family’s taxed and untaxed income, assets, and benefits. You can find your EFC number in the student Aid report you receive after you file the FAFSA.
The EFC is based on the student and parent income and assets, family size, number of children in college, and other demographic factors.
The EFC is calculated based on the information reported on the Free Application for Federal Student Aid (FAFSA). College uses the EFC to determine if you are eligible for need-based aid.
What is Need-Based Aid
Need Based Aid can be defined as financial aid that is awarded to students who have financial needs. Your financial need will be calculated by inputting the following formula. Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Aid.
With this formula determine by your school, the financial aid office starts by deciding what your cost of attendance is at their school. Then they will subtract your EFC from the COA. And it will round up how much need-based aid you are eligible for.
Your financial need shows the gap between the cost of college and what your family can contribute. The financial aid package that colleges provide you with helps lower that gap.
What does None-Need Based Aid Mean
There are some financial aids that are known as non-need-based aid, which is based on your EFC. The None-need-based aid is calculated this way. The calculation is that your school takes your cost of attendance and subtracts any financial aid that you have awarded.
Financial need can come from different places, like non-profit organizations or private companies. The formula for calculating None-based aid is COA – Financial Aid Awarded = Eligibility for non-need-based aid.
Type of Financial Aid
There is a different type of financial aid for college, even if you need-based or merit-based, federal or private, it comes in one of the following forms.
Scholarships: Scholarships are like gifts; you don’t need to be repaid unless you don’t live up to the terms of the scholarships.
Scholarships can come from the federal or state government, universities, or private or nonprofit organizations.
Grants: A grant is free money that doesn’t need to be paid back. It can come from federal or state governments, schools, and other places.
Examples of grants are the federal Pell grant and federal supplemental educational opportunities grant (FSEOG).
Federal Student Loans: Federal student loans are government loans and it include terms and conditions with benefits like fixed interest rates, income-based repayment plans. They are not available with most private loans.
Financial Aid is calculated through your COA and your EFC through the Need-Based Aid and the None-Need Based Aid. if you receive financial aid offers from different colleges try to compare your unmet needs at every school. it can help you make a good decision on which one to accept. That’s all for How is Financial aid calculated for college. Further research can be done on Google.