Federal Financial Aid

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.

Award Letter

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.

Importance of Financial Aid in Funding College Education

The last few years have been a real test for those who have unshakable faith in the higher education system. With the state of the economy touching new lows and rendering millions of Americans jobless, serious questions were raised over the wisdom of investing money in a fancy college degree.

However, there are statistics to support those who believe that college education opens the door to high paying careers. According to the U.S. Census Bureau’s 2005-2007 American Community Survey, the average yearly income of a high school graduate was $26,712, while those with some college or associate’s degree earned $32,793 per annum. The earnings of those with a bachelor’s and graduate or professional degree were $46,277 and $61,014 per year respectively.

Clearly, the numbers speak for themselves and the argument is won in favor of a college education. But not everyone has the financial resources to fund higher education. For such people, college financial aid comes as a ray of hope. Many colleges offer financial counseling to students and educate them about the various federal aids available to them to fund their education.

Federal financial aid for students includes scholarships, grants, and subsidized loans given on the basis of financial need as opposed to academic accomplishment. Besides, some state agencies also offer grants to deserving students. Some of the prominent federal financial aid programs are:

Pell Grant: It is a need-based grant that is usually given to undergraduate students. Unlike a loan, a student doesn’t have to repay a Pell Grant. The amount of grant can vary from year to year and will depend on factors such as financial need, cost to attend college, whether you are a full time or part time student, and whether you plan to attend college for a full academic year or less.

Supplemental Educational Opportunity Grant (SEOG): This is also a need based grant and can be a part of a student’s overall aid package subject to availability of funds. Priority is given to students who have already received a Pell Grant. A student can get up to $4000 as part of this grant.

Federal Stafford Loan: This is one more source of college financial aid offered by the federal government. These are fixed rate student loans offered to undergraduate and graduate students provided they are enrolled in at least a part time program. Students can apply for both subsidized and unsubsidized Stafford loans. Subsidized Stafford loans are only given to students who demonstrate a financial need. Students who take this loan need to start making payments six months after they graduate.

Parent Loan for Undergraduate Students: This is yet another federal financial aid for college students. It is a low interest loan that parents of a dependent undergraduate student can take to fund the cost of entire education. This loan is not available to parents of independent students.

The U.S. Congress passed a bill in 2008 that proposed sweeping changes to the country’s higher education law. The bill sought to improve the college financial aid programs and its highlights included simplification of the federal financial aid form and availability of Pell grant throughout the year. Rebuilding the education system is evidently one of the top most priorities of the government and if they are successful in their endeavor, it’ll be a huge bonus for the future of post-secondary education.

Financial Aid for College: 5 Tips to Improve Your Financial Aid Award

The financial aid process can be complex and confusing. However, with the cost of a college education continuing to climb, it is part of the answer to the question, “how are we going to pay for this?” Research shows that this is probably one of the biggest concerns that families have today, especially those with a child heading off to college next fall. Here are 5 tips that will help you maximize your eligibility and receive as much money as you can.

1. Get started on the FAFSA right away
The FAFSA form is available online every year on January 1. Go to the FAFSA online and register to fill out the form. Find out what materials and documents you will need and have them all conveniently in one place. The sooner you are able to send in the form, the better. You will want to submit the FAFSA no later than the early part of February to make sure you meet the college, state, and federal deadlines.

2. Fill out the FAFSA form correctly
Since financial aid is awarded on a first-come, first-served basis, it is critical that no mistakes are made on the FAFSA form. If you leave items blank or there are errors, you will only delay your application and could limit the amount of financial aid you may receive. You can always estimate the required tax information if you have not filed your tax return.

3. Find out about the CSS form
You should always check your college’s financial aid web page to see if the schools you are applying to require the CSS form. If they do, fill it out online at the College Board website. It is used by many colleges, universities, and scholarship programs to award students non-government aid. The CSS form gives a financial aid office freedom to provide more aid based on particular circumstances.

4. Thoroughly review your financial aid package
It is important to analyze your awards package to determine which schools give you more free college grants and scholarships and less college student loans. Work-study should also be considered. If you feel your awards package is not sufficient, you can make an appeal to the college you would like to attend, and see if they might be able to provide more help. You will need to support your appeal with additional tax forms, recent job loss, or hospital bills not covered by insurance to provide the necessary documentation for your appeal.

5. Appealing your financial aid package
While it is usually best to appeal your award decision immediately, some experts feel that if you wait closer to the college’s deposit date, the school may be more generous in the aid you receive, especially if the freshman class is not full. One family narrowed the college choices down to two schools. They then approached the college that their son preferred and explained that he had received more help from his second choice school. The college negotiated with the family and awarded an additional $3000 for a scholarship that had not been originally offered. Persist and you might be pleasantly surprised with the aid you receive.

The CSS Profile and FAFSA – Comparing Student Financial Aid Applications

Nearly every student who applies to college or career school also applies for financial aid. With grants, loans, and scholarships available from federal, state, institutional, and private sources, students have good reason to explore their financial aid options. When you apply for financial aid, you’ll encounter two applications: the FAFSA and the CSS College Profile. Here’s what they are and how they differ from each other.

The CSS / Financial Aid PROFILE

The College Board, a not-for-profit membership association that assists students to enter college, is comprised of more than 5,400 career colleges, trade schools, universities, and other educational organizations. The College Board administers the SAT test to high school students. But another key mission of the College Board is to help you lower your cost of attendance (COA). Your COA includes tuition, room and board, books, travel expenses, and other expenses associated with attending college.

The College Board administers the online CSS / Financial Aid PROFILE application (commonly known as the CSS Profile). Member schools agree to use the CSS Profile application to standardize the financial aid application process and to make it easier for students. By using one standardized application, it’s much easier for students to apply to multiple schools.

Schools use your CSS Profile application information to determine how much nonfederal financial aid you are eligible to receive. Nonfederal financial aid includes institutional grants and scholarships, which are subsidies that the college gives you to help you lower your cost of attending college.

You fill out your CSS Profile online. There is an initial fee of $25 that includes sending your application to one school, plus a fee of $16 for every additional school or college that you want your information sent to.

Which Colleges Use the CSS Profile?

The information collected on the CSS Profile is used by almost 600 colleges, universities, graduate schools, and professional schools to determine eligibility for nonfederal student aid funds. Many private colleges, which have institutional financial aid funds, will ask students to complete both the FAFSA and the CSS Profile applications. Many career colleges and public universities do not have institutional funds to distribute, and these schools may not require the CSS Profile. When you apply to a college or career school, inquire at your school’s admissions office or financial aid office.


The Free Application for Federal Student Aid (known as the FAFSA) is a form that you fill out annually to determine your eligibility for federal student financial aid. Federal programs include Pell grants, Stafford loans, PLUS loans, and work-study programs. The program is administered by Federal Student Aid, which is an office of the U.S. Department of Education. Its mission is to ensure that all eligible individuals can access federally funded or federally guaranteed financial assistance for college education.

Most accredited career colleges are eligible to administer federal Title IV education grants, and they will ask you to fill out the FAFSA before your first tuition payment is due. The FAFSA form is available online at the FAFSA website. The application is free, and may be filled out either online or printed out on paper.

What’s the Difference Between the Applications?

The FAFSA and the CSS profile use two different systems to calculate your expected family contribution (EFC), which is the amount of money a school will expect you or your family to contribute, and how much the school will award in grants and scholarships.

FAFSA asks for a different set of financial information than the CSS Profile. For example, FAFSA ignores assets of siblings, all assets of certain families with less than $50,000 of income, and both home and family farm equity. The CSS Profile collects information on estimated academic year family income, medical expenses, elementary and secondary school tuition, and unusual circumstances.

The CSS Profile is generally due earlier in the year than the FAFSA. Individual colleges set their own due dates, and you should plan ahead. Go to the College Board website, review the list of colleges that interest you, and get the due dates for the one(s) you want.

How to get started?

If you are thinking about applying to college or career school, the best way to start is by logging onto a free college directory website like the one below. You enter the search terms that are appropriate for you (such as “bachelor’s degree in psychology” or “online law degree”). You’ll be given free information about the schools or programs that fit your criteria. Compare them, and make sure they offer financial aid. Contact the schools and learn more about what they have to offer. When you are accepted into a school, immediately contact the school’s financial aid office and find out which applications they require.