How Financial Aid Works
Written by The LCU Blogging Team on Tuesday, October 3rd, 2017 in Financial Aid
One term you’ve heard throughout high school and will hear throughout your college career at Lubbock Christian University is “financial aid.” Simply put, financial aid is money that the government and other organizations lend you to help pay for college.
Your role, along with your family, is to apply for financial aid. It can be a difficult process and it’s not always easy to understand, but here’s a look at the basics of financial aid and how it works.
Sources of Financial Aid
Financial aid primarily comes from the following sources: the federal government, state governments, colleges and universities, private organizations (such as clubs and religious organizations), as well as banks and lending companies.
Types of Financial Aid
Financial aid comes in four main types: grants, scholarships, work-study and loans. We’ll discuss the difference between the four types of financial aid in an upcoming post.
It’s important to understand that the government doesn’t guarantee everyone the right to a college education, but understands that it’s in the best interest of society to make college accessible to as many people as possible.
It’s also worth noting that public and private colleges have different formulas and procedures for determining how much you and your family can pay for college. The U.S. Department of Education uses the Federal Methodology for determining financial need for both public and private schools.
Applying for Financial Aid
The first step in applying for financial aid is completing a form known as Free Application for Federal Student Aid (FAFSA). The government uses the information you provide on the FAFSA form to determine how much money you can afford to pay for one year of college.
The goal of the FAFSA is to come up with a number known as your Expected Family Contribution (EFC). Again, this number determines the expected amount of money your family can afford for one year of college.
Even if you don’t think your family qualifies for financial aid, it’s still worth applying for it – especially if there is more than one child in your immediate family that is attending college.
The amount of financial aid you qualify for is sent to you via an award letter. Note: the first award letter isn’t necessarily the final offer. If you feel that your EFC is too high, you can contact the financial assistance office regarding items that may qualify you for a Special Circumstance review. For instance, medical costs not covered by insurance may be a legitimate appeal.
When to Apply For Financial Aid
The first day you can file the FAFSA form is on Oct. 1 of the year before you plan to go to college, although college, state and private financial deadlines may vary. Please check with the financial assistance office at the universities to which you’re applying regarding deadlines. Your goal should be to file your FAFSA as close to October 1 as possible, as financial aid dollars are limited and often awarded on a first-come, first-served basis.
How Your Financial Aid is Calculated
Four primary factors determine your eligibility for financial aid – your EFC, your year in school, your enrollment status, and the cost of attending the college of your choice.
In most cases, the process consists of subtracting your EFC from your cost of attendance (COA) to determine how much need-based aid for which you qualify.
Non-need based aid is calculated by subtracting the financial aid you’ve been awarded so far and the family contribution from the Cost of Attendance. The amount of financial aid you’ve already received includes aid from all sources, such as private scholarships, etc.
While applying for scholarships may seem daunting, it’s a task you and your family can handle efficiently by filling out the right forms, providing the right information, and making sure your application is submitted in the most timely manner possible.