Many parents find the financial aid process confusing and overly complicated. Give your homeschooler an advantage by starting out well informed. Here are a few key terms to understand:
Free Application for Federal Student Aid (FAFSA) – The Federal form for determining financial need. This form is used to determine eligibility for federal and state financial aid, but also for many university based scholarships. All families with college bound students should complete this free form, even if they don’t believe they have financial need or will receive financial aid. This form is available January 1st of each year from the fafsa.ed.gov website, which is free (watch out: the site fafsa.com is a private site that charges you to fill out this form).
Grants and Scholarships – Gift money you do not have to pay back. Most often grants are based on financial need and come from a variety of sources including government and colleges. Scholarships are most often based on academic merit and come from colleges or from community organizations, businesses, or foundations. When you look at your student’s financial aid package, be sure to note grants and scholarships are free money. Loans need to be paid back.
Expected Family Contribution (EFC) – This is the amount of money that your family is expected to contribute to your student’s college costs. This figure is determined through information you provide on the FAFSA. The EFC is something you are expected to pay not just out of current income but also out of savings. Most families find the number unrealistically high.
Cost of Attendance (COA) – Colleges calculate a budget for what it costs to attend their college, including tuition, fees, room and board, books, transportation, and other expenses.
Self Help – This is typically part of the financial aid package, but it is money that you are expected to pay now or later. The most common forms of self-help aid are loans and student jobs on campus (work study).
Net Price Calculator – Families can get use this tool to get an estimate of what their costs will be at a given college. Calculators consider factors such as family income, number of people in the family, and the cost of the college. Then, they consider the estimated financial aid and scholarships a student might receive and calculate a net price. These are only estimates, but many families find them helpful in planning.
Percent of Need Met – Most colleges do not meet a student’s full financial need. Students may be left with a big gap between their expected contribution and the cost to attend a school. Some colleges meet full financial need, but most do not.