How does fafsa calculate aid

The cost of college includes your direct costs of tuition, fees, residence hall, food but also travel, books and estimated other costs. Financial need is the difference between the cost and the Expected Family Contribution. The best way to determine what a college may really cost is to find out the net price for that college.

This is often much less than the published price. Many families don't realize that colleges are not required to fully meet a student's need. And most colleges do not. This practice, called "gapping," is common. Gift aid generosity. Colleges offer different combinations of types of aid. They can offer gift aid grants and scholarships , which reduce the cost of college. Most colleges award a combination of aid types, but the amount of gift aid can vary based on how desirable the student is to the college.

Outside scholarships. If the student wins a scholarship or other award outside the college, the college must deduct that money from the aid package. But they can choose whether to reduce gift aid, self-help aid, or a combination of both. When the letter will arrive depends on the school, but generally, you can expect it at about the same time you receive your acceptance letter from that school.

The amount of aid offered can range from zero to the full cost of attending college. It will be broken down into three categories: free money you don't have to pay back, earned money via work-study or non-work study , and borrowed money either from federal or private student loans.

If you feel your federal financial aid award is inadequate, you can request a professional judgment review by the awarding school. However, you will need a legitimate reason to convince the school your award is insufficient.

One way would be to demonstrate that your family's financial situation has changed for the worse. If that's the case, the school will typically ask you to submit a letter summarizing the new circumstances.

This could include a divorce, a death in the family, a job loss, or sudden high medical costs. If another school has offered you a larger award, you could try contacting the school offering the lower award and ask if they will match the larger offer.

Historically, many colleges and universities have been criticized for encouraging college candidates to commit early with the understanding they could not switch colleges, even though the understanding was not legally binding.

For the candidates, early commitment could mean passing up a better financial aid package from another school. Now, however, students will have recourse. Action taken in Sept. Furthermore, NACAC members are now allowed to encourage enrolled students to transfer to a school with a better financial aid package, offer perks such as special scholarships and priority course selection for early enrollees , and recruit students beyond the traditional May 1 deadline, giving those students more time to choose the best financial aid package.

The NACAC has said it will follow the restrictions outlined in the consent decree, although it believes the deleted provisions of the CEPP did provide substantial aid and protection to students.

Understanding how this process works is the best way to establish as much control and choice over financing college as possible. Financial aid in the form of a loan is to be paid back. If it is a federal loan, repayment begins after a student has graduated, with a grace period of six months after finishing school.

On the other hand, privately-issued loans may require repayment during the school year. Other forms of financial aid, such as scholarships and grants do not need to be paid back. Grants, scholarships, loans, and work-study are four primary forms of financial aid.

Students may be eligible for more than one type of financial aid, based on their financial need and academic, athletic, or artistic achievement. FAFSA aid is calculated based on a number of factors. Next, to identify non-need-based aid, any financial aid already received is subtracted from the COA. Remember that planning can never start too early. One of the basics to know is that aid can come from a variety of sources.

Be sure to look at the College Preparation Checklist published by the U. This will guide you from wherever you are—elementary, middle school, high school, or young adult—to college with a plan to pay for your education. Sallie Mae. Federal Student Aid. College Board. Department of Education. Federal Register. United States Department of Justice.

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I Accept Show Purposes. Your Money. Personal Finance. Though it doesn't represent the exact amount that you'll pay for college costs, colleges will assume you can contribute this amount when they determine how much financial aid of office to your family.

Though you can calculate your EFC by hand using these formula worksheets , you can much more easily use our EFC Calculator to reach the same result. If you'd like to talk with us once you have your estimated EFC, give us a call. We're happy to walk through the numbers and answer any questions. You can reach us at MEFA Read more on how we are here to help you. Log in. College Savings Plans U. Plan Prepaid Tuition Program U. Keyword Search. Use both taxable and nontaxable income, including any amount put toward retirement that year Subtract allowances for federal taxes, state taxes, and Social Security paid Subtract an Income Protection Allowance IPA.

Here's the real surprise in the formula. The IPA is intended to represent the amount a family needs from its income for necessities think housing and food.