The Language of Financial AidOct 15, 2020
When you’re searching and applying for college financial aid, it helps to understand the jargon. The FAFSA form (Free Application for Federal Student Aid) employs a bewildering array of acronyms. American students should file a FAFSA as soon as possible after October 1st of senior year. Complete your application online at https://fafsa.ed.gov. To make the process easier, we offer a handy translation guide.
• COA stands for Cost of Attendance. This number includes such costs as tuition, room and board, fees, books, a minimal budget for incidental spending, and two round trips yearly between the college and the student’s home.
• EFC is the Expected Family Contribution—the amount the student and his family are expected to pay towards the first year of college expenses. The EFC is derived from an analysis of all of the data entered on the FAFSA form.
• ESTABLISHED NEED—the difference between the COA and the EFC. This is the amount that the college financial aid package will attempt to meet.
• CSS PROFILE—the College Board form required by many private colleges in addition to the FAFSA. The PROFILE gathers more in-depth financial information. If required, complete the College Scholarship Service PROFILE form at www.collegeboard.com.
• GRANTS are gift money that colleges award to meet at least some of the established need. Grants do not need to be repaid.
• SCHOLARSHIPS are also gift aid but are usually linked to some type of merit award. For example, scholarships may be awarded for academic, athletic, or arts-based achievements. Many college financial aid packages include both scholarships and grants.
• LOANS may be subsidized or unsubsidized and are often a part of the financial aid package. Loans need to be repaid, often over an extended period of time, and at a low fixed interest rate. Subsidized loans will not accrue interest until after the borrower has completed his education.
• WORK-STUDY is the offer of a campus-based job. The student can use the money earned through work-study to pay some of his college expenses.
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