Financial Aid


A lot of people seem to think that financial aid is a government entitlement program. The reality is that a college education is not an entitlement. Rather its purpose is to help students afford to go to a college that you might not have been able to pay for on your own.

In order to provide financial assistance the government uses a formula to calculate each person’s Expected Family Contribution (EFC). To calculate this number they look at both the parents and students income and assets.  What they don’t account for is any debt they may have.  One of the reasons for this is that it’s extremely difficult and costly for them to try and discern whether the debt is equated to a particular lifestyle or other issues such as health and medical bills. Since its to hard to determine they simply don't use it.

Once this EFC is determined, most colleges will use this number to determine eligibility for both federal direct subsidized and unsubsidized loans. Both loans have a six month grace period after graduating before loan repayments must begin. The difference is the subsidized loans do not begin to accrue interest until you graduate while the unsubsidized loans do.  There is also strict dollar limits on both the subsidized and unsubsidized loans which differ from year to year. 

School Year Subsidized Loans Unsubsidized Loans
First-Year Up to $3,500 Total of both loans not to exceed $5,500
Second-Year Up to $4,500 Total of both loans not to exceed $6,500
Third-Year & Beyond Up to $5,500 Total of both loans not to exceed $7,500

To apply for financial aid you must complete the Free Application for Federal Student Aid (FAFSA). This must be done annually and can be submitted as early as January each year. A benefit of the FAFSA is it allows for schools to know if you qualify for a Federal Pell Grant. The Federal Pell Grant Program provides need-based grants to low-income undergraduate and certain post baccalaureate students to promote access to postsecondary education.  The maximum annual Pell Grant for 2015 was $5,730.  However, it’s important to remember this is a needs based grant that is calculated based off of your EFC.

Also important to note, Federal aid is limited and much of it is offered on a first-come, first-served basis, so the earlier you file the better your chances of accessing the most financial aid possible. Missing deadlines can ruin your opportunity for financial aid. Therefore, you should check with your colleges’ financial aid administrators to learn each college’s exact FAFSA deadline. Filing as close to January 1 as possible is highly recommended.

To learn more about FAFSA just click on this link.