Applying for financial help is a long process wherein you have to fill out several forms giving your detailed personal information. You might also have to provide information on your parents in order to process the federal financial aid request. Obviously, the sooner you apply, the better your chances. File your FAFSA as earliest as possible after January 1.
The first step in the application process for financial aid is to submit a free application for Federal Student Aid (FAFSA). The easiest way to file for FAFSA is to do it online: http://www.fafsa.ed.gov. You may also get a hard copy from your high school guidance counselor or your school’s financial aid office, and send it through mail.
The information you provide on the FAFSA is used in calculating the types and amounts of financial aid for which you qualify. The questions FAFSA asks include your age and marital status, educational residency and depended status, income and finances and finally the type of financial aid you are interested in. If you are dependent on your parents or guardian, information on them will have to be provided.
The government calculates your Expected Family Contribution (EFC) based on your need analysis. Your EFC is the amount of money you and your parents will be expected to pay toward the total cost of your education.
Student Aid Report
After the completion of your need analysis, you will be sent a Student Aid Report (SAR) which projects your Expected Family Contribution and the types of financial aid for which you are eligible. This report will also be sent to your prospective schools, which will be specified on your FAFSA.
Cost of Attendance (COA)
The total cost of your tuition, books, on-campus lodging and all other educational expenses at a school is your Cost of Attendance (COA). Although every school will have a different Cost of Attendance, your Expected Family Contribution will always be the same amount. Your Expected Family Contribution is subtracted from the Cost of Attendance, and the remainder is your financial need.
The schools listed on your FAFSA will use the SAR to create a federal financial help package which will include all the types of financial aid already available to you – grants, scholarships, loans and work study benefits.
The Award Letter is the detail listing of the financial help package that each school sends you. Every school will vary with its commitments and may not offer enough to meet your needs. When you’ve decided on the school and financial aid package that best suits you sign and return the Award Letter by the deadline. Make sure to specify any financial aid you do not wish to accept.
Applying for a Federal Education Loan: The MPN
Federal education loan applications typically include a Master Promissory Note, or MPN. The signing of the MPN makes you officially liable to repay the loan money according to your lender’s terms. Once you have submitted an MPN, you can use the same to borrow future loans for up to 10 years, depending on the type of loan and your school’s policies. Even if you transfer to another school, your original MPN may remain valid.
Certification, Notification and Disbursement
It is imperative for your school to certify your loan by verifying your eligibility and enrollment to your lender.
Once your lender and guarantor approve your loan, you will be sent a Notice of Loan Guarantee and Disclosure Statement. This document is your official statement of the approval, amount and terms for your loan. The notice will also include the dates of disbursement. To pay school costs with your loan money, you may be required to endorse the checks or Electronic Funds Transfers (EFT) deposited in your school account.