Financial Aid: What is it?

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While very few families pay “sticker price” for a college education, over 80% of family’s do overpay.

They overpay for a variety of reasons, one of which is the failure to properly understand financial aid.

Financial aid arrives in a variety of ways: grants; scholarships; awards, loans; and, jobs. Some aid is need-based, while other is merit-based.

Need-based is awarded solely on a family’s ability to cover the cost-of-attendance. Merit-based is awarded based on other factors, such as academic performance.

Will all aid received reduce the family’s portion of the cost-of-attendance?

Only gift aid (e.g., grants, scholarships, awards) reduces the cost dollar-for-dollar; most self-help aid (e.g., work-study, loans) helps cover the cost with a family’s resources. Gift aid need not be repaid, most self-help aid must be repaid.

Schools award the vast majority of aid to students of families with financial need. To qualify for merit-based aid, students must demonstrate academic achievement, high scores on standardized tests, and/or extraordinary or unique talents or accomplishments.

Need-based aid is determined through a review of a family’s financial information, usually submitted via the Free Application for Federal Student Aid (FAFSA). For a few hundred schools, additional financial information is obtained through a form called the CSS Profile.

Don’t be one of the 80%+ of families that overpay for a 4-year undergraduate education. Contact our Professional College Planners for assistance in designing and implementing your family’s college planning campaign.

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