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College Entrance Guide

IB Coordinator and College Counselor: Barbara Kuhl


PART 7: FINANCIAL AID

Financial Aid is assistance in meeting college costs. There are mostly two types of financial aid: the one based solely on need, and the no-need scholarships awarded for academic excellence, athletic prowess, artistic talent, leadership or other criteria.

Individual colleges determine financial aid packages based upon the information provided by you on several forms: the Free Application for Federal Student Aid (FAFSA), the College Scholarship Service (CSS) PROFILE® [the CSS is a division of the College Board], and the colleges’ own institutional forms. These forms will help the financial aid office determine the Estimated Family Contribution (EFC) to the student’s educational costs. The difference between the cost of attending the college and the EFC is the need. The individual college will put together a financial aid package designed to meet that need. At most colleges, a package will include a combination of grant, loan and employment. If you are applying to a UC or CSU, you will be eligible for a Cal Grant (www.calgrants.org).

In order to be eligible for any kind of federal assistance, the FAFSA must be filled out. January 1st of the student’s senior year is the first day that you are eligible to file the FAFSA. This form is available in the College Counseling office in early December. Also, filing for the FAFSA is a necessary step to eligibility for a Cal Grant. LILA’s College Counseling office will verify your GPA electronically by the March 2 deadline.

Another form colleges use is the CSS PROFILE. You can file the CSS PROFILE in the fall. The PROFILE is required by many private colleges and universities to determine your eligibility for non-government financial aid, such as the institution’s own grants, loans and scholarships. While the FAFSA contains the same question for everyone, the PROFILE contains questions that are specific to the school or program you are applying to. For this reason, when you complete the CSS PROFILE, you will need to enter a code specific for the school or program to which you are applying. These codes are available online or in the College Counseling Office.

Important Definitions:
Cost of Attendance – The total amount of money required to attend an institution through graduation. It includes tuition & fees, room, board, books, transportation and other incidentals. The Student Aid Report you receive after completing the FAFSA will document your Expected Family Contribution—how much your family is expected to contribute to your college education costs. Debt load – The amount of debt lenders believe you and your family can afford
Grant – Funds that do not have to be repaid. They can be awarded based on need or merit
Loan – Money that must be repaid back by whoever is listed as the borrower
Paid Internships – you work at a specific job and are paid for the term or year
Prepayment plans – families pay in installments over a period of time
Scholarship – Money awarded to the student, based on a talent, skill, etc. It does not have to be repaid.
Tuition – The cost to enroll in classes and does not include room & board or fees.


CURRENT LOAN PROGRAMS

[Source: www.edfund.org]

Federal Family Education Loan (FFEL) Program
FFEL Programs are funded by banks, savings and loan associations, and credit unions. EDFUND provides the guarantee for FFEL Program loans on behalf of the California Student Aid Commission. Following are additional information and specific requirements for FFEL Program loans.

Stafford loans
Stafford loans are the most common source of student loan funds available for undergraduate, graduate, vocational and professional students. There are two types: subsidized and unsubsidized. The Free Application for Federal Student Aid (FAFSA) helps to establish eligibility for both.

  • Subsidized Stafford loans are need-based. The federal government pays the interest on the loan while the student is enrolled in school at least half-time and during the grace period before repayment begins. Monthly payments begin six months after the student graduates, drops below half time, or withdraws from school.
To qualify for a subsidized Stafford loan, students must meet all the requirements for federal student financial aid. They also must have had their eligibility for a Pell Grant determined.
  • Unsubsidized Stafford loans may be taken out by all qualified students, regardless of their incomes. They must meet the same requirements as those for subsidized Stafford loans, except they don't have to demonstrate financial need. The unsubsidized Stafford loan plus all other financial aid cannot exceed the cost of attendance. Interest accrues from the time the loan is disbursed, and interest payments begin immediately but can be deferred. It's to the student's advantage, of course, to pay the interest while in school. This way, the debt will be the principal amount only when repayment begins.

Link: Federal Interest Rate Flyer — Latest interest rates (PDF format)

Origination and insurance fees are deducted from the loan. With the standard repayment plan, Stafford loans must be repaid within 10 years. Lenders offer standard, graduated, extended and income-sensitive repayment plans. Also, please see the information on federal Consolidation loans following this section.

Master Promissory Note
See EDFUND's Master Promissory Note information page for details of the MPN process for both Stafford and PLUS loans.

Federal PLUS loans
PLUS loan funds are sent directly to schools. If disbursed by check, the funds will be co-payable to the borrower and the school. Loans are usually disbursed in one or more payments. Interest begins to accrue immediately, and repayment starts within 60 days of the loan's last disbursement for the school year. To qualify for a PLUS loan for parents, students must meet the requirements for federal financial aid and their parents also must meet some general requirements. To qualify for a PLUS loan for graduate and professional students the student must meet the requirements for federal financial aid.

Federal Consolidation loans
Consolidation loans allow students to combine different loans, subsidized and unsubsidized, from different lenders or schools, to make repayment more manageable. Loans eligible for consolidation include: Stafford, PLUS, Perkins, SLS, NDSL, HPSL and Direct loans. Participating lenders pay off the borrower's existing student loans, creating a new loan with a single monthly payment and an extended repayment term of up to 30 years. Married borrowers may consolidate their individual loans under a single payment schedule. The benefits of loan consolidation will differ for each borrower. Generally, monthly payments are less, but borrowers pay more interest over the life of the Consolidation loan.

Federal Perkins loans
Federal Perkins loans are part of the campus-based programs and are not part of the FFEL Program. Federal Perkins loans are very low-interest loans (5 percent) made through participating schools for students with financial need.


GRANTS, SCHOLARSHIPS & SPECIAL PROGRAMS

Federal Programs

Pell Grants
The Pell Grant program is the country's largest grant program and provides a foundation for all additional aid. Pell Grants are awarded to every qualified undergraduate student, and they don't have to be repaid. Students must demonstrate financial need, be in an eligible program at an eligible school or college, and not have already earned a bachelor's or professional degree. Under reauthorization, students pursuing initial teacher certification who are enrolled at least half time in courses required for initial teacher certification are eligible for a Pell Grant as long as the program does not lead to a graduate degree and they are not attending a school that offers a BA in Education. Students may receive only one Pell Grant a year. Students who file the Free Application for Federal Student Aid (FAFSA) are automatically considered for a Pell Grant.

Federal Supplemental Educational Opportunity Grants
Students who qualify for additional assistance may receive a Federal Supplemental Educational Opportunity Grant (SEOG) ranging from $100 to $4,000 per year. Colleges award these grants to students with exceptional financial need. Priority is given to students receiving a Pell Grant.

Newest Federal Academic Grants

Students can now apply for two additional academic grants — the Academic Competitiveness Grants (ACG) and National Science and Mathematics Access to Retain Talent (SMART) Grants, both created by the Higher Education Reconciliation Act of 2005.

More information from The US Department of Education


Facts Applicable to Both Programs

  • Available for students attending two- or four-year degree granting institutions
  • Both grants require recipients to be:
    • Enrolled full time (12 semester hours) at a two- or four-year institution in a program leading to an associate or bachelor's degree
    • A U.S. citizen (no eligible non-citizens)
    • Pell Grant recipients

Academic Competitiveness Grant

  • First-year award: $750, second year: $1,300
  • First-year students must have completed, with passing grades, a rigorous secondary school program of study after January 1, 2006 ("rigorous" is determined by each state and approved by the U.S. Secretary of Education)
  • GED ineligible for consideration
  • Non-traditional secondary school programs eligible for consideration include home school, Department of Defense Bureau of Indian Affairs schools
  • Second-year students must have completed a rigorous secondary school program of study after January 1, 2005 and must have at least a 3.0 GPA (monitored at first disbursement only)
  • Student must not have been previously enrolled in a "program" of undergraduate education (a few classes are OK, but not as part of a program)

National SMART Grant

  • $4,000 per year for up to two years
  • Open to third- and fourth-year students enrolled in a four-year degree program in certain designated subject areas
  • Recipients must have a cumulative GPA of at least 3.0 in the courses of study required for the major (monitored by term)
  • Designated subject areas to include science, computer science, technology, math or a critical foreign language, such as Arabic, Chinese, Korean, Japanese and Russian (majors will be listed on a Web site with Classification of Instruction Programs code)

Federal Work-Study
Some students are offered federal Work-Study as part of their financial aid package. Their colleges assist them in locating a part-time job on or off campus. If possible, they are placed in work related to their studies or career plans, or in community service. They earn at least the federal minimum wage.

State programs
Many states offer students — typically state residents — access to a variety of state financial aid programs. Programs include:

  • Grant programs such as California's Cal Grant programs (http://www.csac.ca.gov/)
  • Fellowship programs
  • Scholarships
  • Tuition waiver programs
  • State work-study
  • Loan assumption and/or forgiveness programs for students who choose a teaching career (e.g., California's APLE Program
  • A variety of special grant and loan programs reserved for targeted populations.