College Planning: What Affects Your Qualification for Financial Aid?Financial Planning Anthony Benante
A 90-second read by Anthony Benante: The first thing you need to do to see if you qualify for financial aid is fill out the FAFSA form: In order to apply for financial aid, you must complete the FAFSA (Free Application for Federal Student Aid) form. There are certain criteria to first apply for financial aid – Go to the Federal Student Aid website – StudentAid.ed.gov to see that you meet all required criteria to apply.
How Financial Need is determined: Colleges and universities consider several factors when determining Financial Aid, including their own financial aid policy. They look at your financial need, which is calculated with a formula. Federal Student Aid defines “financial need” as “the difference between the cost of attendance (COA) at a school and your Expected Family Contribution (EFC)”.
- The amount of Financial Aid one receives varies by person and is determined by multiple factors.
- The cost of attendance (COA) at your school plays a big factor in how much money you will receive.
- Cost of attendance is a calculation of your tuition and fees, room and board, books and supplies as well as other education-related expenses.
- Your Expected Family Contribution (EFC) also is considered.
- Your EFC is the number that college financial aid staff uses to determine how much financial aid you would receive if you were to attend their school. It is calculated with a formula established by law. The formula includes your family’s taxed and untaxed income, assets and benefits (such as unemployment or Social Security). Your family size as well as the number of members who will attend a college could affect the formula.
- The financial aid office then subtracts your EFC from your COA and that determines your financial need and therefore how much need-based aid you can get, which can’t exceed more need-based aid than the amount of your financial need.
Reporting Parents’ Information: If you’re a dependent student, you will need to include your parent’s (as well as your own) information on the FAFSA form.
- The FAFSA form asks for various financial information, such as information from tax forms as well as balances of savings and checking accounts. Assets such as these, as well as investment accounts, 529 accounts, etc. will be considered. The family’s primary residence and retirement savings are not considered.
- Your parents’ financial assets (as well as your own) will be considered when filling out the FAFSA, but having savings doesn’t necessarily mean that puts you out of the running to receive financial aid.
- You can find questions that you and your parents might need to fill out on the FAFSA form on the Federal Student Aid website – studentaid.ed.gov
- To read more about filling out parents’ info on the FAFSA, click here.
For more information or if you have any questions, please reach out to your Baron Team.