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The Financial Aid Process

The following information has been reprinted from School Guide 2013 with permission of the publisher. Although this article was written for high school students and their parents, much of the information may be useful to veterans who are considering continuing their education. In addition to the benefits veterans have earned while on active duty, additional resources may be available. It is also a good idea to familiarize yourself with some of the language used in the financial aid process. Good luck in your pursuit of higher education.


When it comes to financial aid, the first question most students and parents ask is “Where do I begin?”
The best place to begin your search is the high school guidance office. In addition to college directories, like Barron’s, Fiske, and School Guide, many guidance offices also use computerized college search programs that provide comprehensive information about colleges nationwide, including financial aid programs, the number of students who receive financial aid, the average amount awarded, and the total annual amount available for the entire student body. If your school uses one of these online programs, be sure to attend any orientation sessions or tutorials to ensure that you get the most out of your search.
Your guidance office will also have many reference books listing various scholarships, grants, and financial aid programs at the national, state, and local levels. Your local public library also has these publications, usually in a special “Education and Careers” section or in the “Young Adult” section.
Your high school might also have a Financial Aid Night featuring financial aid advisors from lending institutions, colleges, or the guidance department of the high school. Be sure to attend this event with your parents. Your school counselors will also be familiar with state scholarship programs and the financial aid programs and practices of colleges normally attended by students from your high school.
Next, you might contact the colleges to which you expect to apply. They will not only have information about their own financial aid programs, but may be able to help you with other sources of aid and perhaps help you to fill out the Free Application for Federal Student Aid (FAFSA) and other forms. In many cases, smaller colleges are in a better position to help you with this than many larger universities.
Throughout this preliminary search process you should be asking yourself the following questions:
  1. What are the specific programs that might help me?
  2. How do I apply to these programs?
  3. What are my chances of qualifying for assistance?
Be Thorough and Careful
The financial aid process requires hard work and persistence. The financial aid applications can be complex and confusing. They may be returned to you for clarification or additional information. Oftentimes follow-up on your aid application may be necessary. For this reason, be sure to make copies of all of the applications and documents you submit, including the date submitted, as you may need them for reference.
Don’t be afraid to call the college financial aid office or state scholarship or grant office to find out the status of your application. Millions of financial aid applications are filed each year, increasing the possibility that mistakes will be made and items will be overlooked. It is your responsibility to make sure this does not happen to you.
Finally, be sure to file your application as soon as possible (usually January 1 of the senior year).
Students and parents with questions about federal financial aid programs, application procedures, eligibility formulas or any other concerns about financing higher education can call the information hotline, 1-800-4-FED-AID (1-800-433-3243) or visit the Web site
A Word of Warning
The official FAFSA is at – not at a .com Web site. There is no fee to submit the FAFSA. Any site with a .com address will probably charge you a fee to complete and submit the application. You are advised not to use those sites. You can get live help completing the FAFSA at or by calling 1-800-4-FED-AID (1-800-433-3243) or (319) 337-5665.
Also, there is no Department of Education (ED) program that replaces loans with grants, nor is there a fee to obtain ED administered grants. Do not provide personal or financial information to unsolicited callers. To report suspected fraud, contact the Federal Trade Commission, 1-877-382-4357 or visit
Sources of Financial Aid
The vast majority of students attending college with the help of financial aid receive this aid from one of three primary sources:
  1. Colleges, universities and other postsecondary institutions. Most have scholarships, grants, loans and work opportunities to help their students pay for their education.
  2. The Federal Government. The U.S. Department of Education (, administers programs that provide more than $150 billion annually in grants, loans and work-study assistance.
  3. State Governments. All 50 states and the District of Columbia fund or administer student aid programs including loans, scholarships, or grants.
Beyond these primary sources, various groups such as the Elks, the Knights of Columbus, other service organizations, local governments, and private companies often award scholarships to college-bound  students.
How to Apply
The FAFSA (Free Application for Federal Student Aid) is the application that must be used to apply for any type of federal financial aid. It is also used by most colleges and states to determine student eligibility for state or institutional aid. The form is available in high schools and colleges across the country and online at
In order to file the FAFSA online, the student and parents must all have a personal identification number (PIN), as the PIN serves as an electronic signature on the FAFSA. The PIN is easily obtained at Please note that the PIN provides access to personal information, including your Social Security number and financial information, and should not be shared with anyone.
The FAFSA may not be filed before January 1 of the student’s senior year in high school, but should be filed as soon after January 1 as possible. Although there are questions about income as well as taxes paid, etc., you should not wait until after you and your parents have completed your income tax forms to complete the FAFSA. This may cause your application to be too late for you to receive any financial aid, especially from colleges and universities. You should file the FAFSA as early as possible using estimates of your income taxes as outlined on the form itself. Simply check the box that indicates that you will file an income tax form, but have not done so as of the date you are filing the FAFSA.
If you have done your taxes, be sure to consider the option in FAFSA on the Web to use the IRS Data Retrieval Tool. This option is available if you filed your taxes electronically at least three weeks prior or if you filed on paper at least eight weeks prior. The IRS Data Retrieval Tool takes you to the IRS Web site, where you will need to log in by providing your name and other information exactly as you provided it on your tax return. At the IRS site, you can preview your information before agreeing to have it transferred to your FAFSA. You can also use the tool if you submitted estimated tax information and want to update the numbers after completing your taxes.
Once you have completed the personal information on the application, follow the instructions for listing the colleges you wish to have the information sent to. If you are applying online, the code number will automatically be inserted according to a prompt. If you are filing a paper application, you can get the code from, the high school guidance office, or from the specific college. The application will also ask you what state you live in and based on this, will send the information to your state’s financial aid agency so you will be considered for state scholarship and grant programs. Finally, the information will automatically be sent to the Pell Grant program.
Expected Family Contribution
The ED provides all of these agencies and institutions with an analysis of the information you have provided on the FAFSA according to a Congressional formula. The formula is used to determine how much a family might be expected to pay toward the applicant’s education (family contribution). This amount, called the Expected Family Contribution (EFC), will be used to determine whether or not the student has “financial need,” which is what defines eligibility for most financial aid programs.
The formula takes into consideration such things as family income, assets, number of people in the family, federal and state taxes paid, the number of children in college, and a number of other factors. The calculation does not factor in equity in your home or funds in a 401K or other retirement accounts.
Families should be aware that an asset reported in the parents’ name is assessed at a lower rate than if that same asset were reported in the student’s name. This figure can make a considerable difference in the EFC.
The applicant will receive a Student Aid Report (SAR), which includes the EFC. The figure usually appears right under the date the report was sent. The student, colleges, and all federal and state agencies receive the same EFC. The SAR also summarizes the information you have provided on the FAFSA. Check it for accuracy and make any necessary corrections. (If you had previously estimated your income taxes, this is your opportunity to replace those estimates with the actual figures.) The report will also indicate whether or not you are eligible for a Pell Grant.
The FAFSA does not provide space to explain any unusual circumstances (unemployment, large medical bills, tuition for other children in elementary or secondary school). These circumstances should be carefully explained and documented wherever possible and sent directly to the financial aid office of the college to which you are applying. The college financial aid officer will determine whether or not the unusual circumstances will be taken into consideration.
When the financial aid officer receives the analysis, the information is reviewed and any necessary adjustments are made to the evaluation. The adjusted EFC is matched against the college’s cost of attendance (COA) to determine if the student demonstrates financial need. At this point the financial aid officer would notify the student of his or her award or indicate that the student is not eligible for aid.
Some colleges may require additional applications (either the CSS/Financial Aid PROFILE, available at, or a separate financial aid application specifically for that college) for use in awarding their own aid money. Be sure to check with the colleges to which you are applying to see what applications are required.
Whether you apply for federal, state, or institutional aid, you should be sure to complete all forms accurately and honestly and be sure to submit them before the established deadlines.
Financial Need
Since most financial aid programs require applicants to demonstrate financial need, it is important to examine that concept more closely. Simply defined, financial need is the difference between what it will cost a student to attend a particular school (COA) and the amount that the family can contribute toward the student’s education (EFC). The college’s COA includes tuition, room, board, all fees, and reasonable estimates for books, supplies, travel, clothing and recreational expenses.
Students and parents can calculate what their Expected Family Contribution would be by using an online calculator like the one available at or Take into consideration that financial need is a relative figure and will vary depending on each college’s overall costs.
Normally, the FAFSA will ask for income for the student and the student’s parents. In cases where  the student’s parents are divorced or separated, or the student is filing as an independent student, meaning that only his or her income is reported, special care should be taken in completing the application to be sure that accurate income information is supplied. Instructions for these and other unusual circumstances are available at
Financial Aid “Packaging”
Most colleges combine various types of awards into a “package” in an attempt to meet a student’s financial need. Thus a student with a financial need of $5,000 might be awarded a $3,000 college grant, a $1,000 Perkins Loan, and a $1,000 College Work-Study job. The college also takes into consideration aid that a student has received from other sources. For example, if a student receives a Pell Grant or a state scholarship, the college would take these resources into consideration when determining the student’s financial need. All of these funds would be outlined in the student’s financial aid package. In this way, colleges are able to help the greatest number of students with the limited funds they have available.
If the family is not satisfied with a student’s financial aid package, they should appeal to the financial aid office at the college. Simply indicate the student’s strong interest in the particular college and ask if the award can be reviewed, or if there are other sources of aid that might be pursued.