FREQUENTLY ASKED QUESTIONS
Financial Aid Basics
1. What is financial aid?
Financial aid is money to help you go to college. The money comes from the federal government, the state government, the colleges, and from private sources. Usually it is in the form of grants and scholarships (free money you do not have to repay), jobs (money you earn) or loans (money you have to repay).
Financial aid is used to assist students and parents in meeting the cost of a college education, and it is designed to reduce the financial barriers of attending college. As the beneficiary of higher education, you and your family have the primary responsibility for the cost of college, to your ability. Financial aid is intended to supplement-not replace-your ability to manage those expenses.
2. How do I begin the application process?
First you must apply for financial aid by completing a Free Application for Federal Student Aid (FAFSA). A government processor reviews your income and assets (and your parents’ income and assets if you are a younger student) and determines your need. Students going to expensive colleges have higher need than students going to less expensive colleges.
You can get a FAFSA from any high school or college. Even if you won’t be attending college soon, you might want to get a FAFSA to see what types of questions are asked. If you are planning to go to college in the next academic year, get a FAFSA right away!
You apply on one FAFSA each year. You send the FAFSA to the government processor and then your application information is sent to the colleges of your choice. The colleges will review your information, determine if any changes are needed, and award you financial aid so you can attend that college. The colleges will try to offer you a combination of grants, work and/or loans from various sources. Financial aid will assist in covering your tuition and fees, as well as educationally related living expenses.
Financial aid may cover your tuition, fees, books, supplies, room and board (on campus, off campus, or at home with your parents) as well as transportation and miscellaneous expenses.
Most financial aid is targeted to assist needy families who lack the resources to pay the full cost of education. In order to determine which students are eligible for aid, the federal government has established a uniform method for calculating a student’s financial aid eligibility.
3. How is financial need determined?
When you file your FAFSA the government calculates a number called the “Expected Family Contribution.” This is the amount you (and sometimes your parents if you are younger) are expected to be able to spend for a year of college. The amount the family is expected to contribute is based upon a federal formula used for all aid applicants.
The college determines how much it will cost you to attend for one year. This is called the “Cost of Attendance.” Costs vary widely among colleges! Be sure to read about college costs.
The college subtracts the Expected Family Contribution from the Cost of Attendance. The difference is your need or eligibility. For example, if the cost of attendance is $12,500 and the family contribution is $3,000 the student will be eligible for up to $9,500 in financial aid. ($12,500 – $3,000 = $9,500.)
4. Who is eligible for financial aid?
All students who may need financial assistance for college are encouraged to apply for aid. Even those who think they may not be eligible may be surprised. So make sure you apply.
Eligibility depends upon a number of factors, including parental income and assets, the number of people the parents support, and the number of children attending college. Even if a student isn’t eligible for grants, there are a number of loan programs available.
Your eligibility will also be based on some additional factors.
First, there are basic requirements that are not related to your financial need. To be eligible for most financial aid you must:
- Be a U.S. citizen or eligible non citizen (see the FAFSA for more detail)
- AB 540 may qualify for state financial-aid, apply here: dream.csac.ca.gov
- Be registered with Selective Service (if required)
- Be working toward a degree, certificate or eligible goal (like transfer)
- Not owe a refund on a federal grant or be in default on a federal educational loan
- Be a high school graduate or have the equivalent of a high school diploma (like a GED) or take a special test to show you have the ability to benefit from college education
- Not have been convicted of drug possession or sales in the recent past (see the FAFSA for more detail)
Then, your family income and assets and other financial factors are reviewed to see if you are financially eligible. Your eligibility is relative to the cost of college. For example, you might not be eligible for much money at a low cost college but you may be eligible for more money at an expensive college.
And finally, you have to make progress towards your educational objectives to keep your financial aid eligibility while you are in college.
The college financial aid office will explain eligibility to you and answer your specific questions.
5. How do I get financial aid?
APPLY. The biggest mistake students make is not to apply because they don’t think they’ll qualify. To apply for federal, state and university financial aid programs, you need only complete the FAFSA, and supply requested documents to the campus financial aid office.
6. How much financial aid can I receive?
The amount of financial aid you receive depends upon your financial need. Except for some loans, your financial aid cannot exceed that need.
The amount you will receive will be determined by the college. It will depend on many factors. Be sure to apply early to have the best chance to get the best funds!
The amount you receive may also be affected by missing a deadline. By failing to meet a deadline you may disqualify yourself for state and/or campus funds.
7. Will my financial aid be different if I live off-campus? What if I live at home?
One factor in determining your financial aid eligibility is the cost of attendance. The cost of attendance is affected by where you live. If you live on campus, the cost will be the actual campus cost. If you live off campus (in an apartment or house) you will be allowed a standard amount for similar type students. If you are younger and live with your parents, you will have a lower cost of attendance because your housing will cost you less.
However, if your costs go up it doesn’t necessarily mean your grants will go up as well. Some campuses don’t have enough grant funds to cover the cost of students living off campus, so you may receive more loans.
8. Do I need to be admitted before I apply for financial aid?
No. Don’t wait until you receive your letter of admission before applying for financial aid. You may miss important deadlines. However, you will need to be enrolled in courses before you receive your financial aid funds.
9. What kinds of financial aid exist?
Financial aid comes in three basic forms: grant & scholarship, work, and loans.
10. Do I need to pay my tuition and fees if I’m getting financial aid?
Each campus has a specific way to pay tuition and fees. Often your financial aid will cover your tuition and fees. Sometimes it will not. If you attend an orientation session this information should be presented. Also, most campuses will send out a bill or fee statement of the amount owed, the due date and, in most cases, any financial aid that will assist in paying your tuition and fees. You should contact your campus billing office for specific details on paying fees.
If you complete all the paperwork required by the college by the deadlines the college sets, then you will usually have money available when school starts. If you start late or miss deadlines, the money may be delayed. Ask each college about its timetable for giving you money.
NO. Need-based financial aid is usually not based on academic performance; it is based on financial need. Even if you have not had good grades in the past, you may receive financial aid if you are able to get admitted to a college. However, you must make satisfactory grades in order to keep your financial aid.
Good grades will give you more opportunity for scholarships. Merit scholarships, which are awarded based on academic achievement, may require that you achieve or maintain a certain academic standard in order to retain scholarship eligibility. These academic standards may be higher than those required for general financial aid purposes and are typically outlined in your scholarship notification.
The largest provider of financial aid is the federal government. Colleges and universities and the state contribute a large portion of grant dollars, along with additional funds for low-cost loans and work study (student employment). Community organizations also contribute funds through scholarships and student employment programs.
14. I’ve been out of school a long time. I’m not ready to be a full-time student but I still need help with college costs. Is there any aid for me?
You don’t have to be a full-time student to receive financial aid. For example, at California Community Colleges, there is no unit requirement for enrollment fee waivers through the Board of Governor Fee Waiver Program. At all colleges, in order to receive assistance from other state and federal programs, you can take as few as six units (half time) and still qualify for financial aid. In some cases you can still be eligible to receive a Federal Pell Grant for as little as one unit.
15. I am not a California resident and I am a resident of another state. Can I still receive financial aid at a California College/University?
Yes. There are a wide variety of federal, institutional and scholarship programs that you may qualify for. Contact the institution you plan to attend for more information.
Professional judgment refers to the decisions that financial aid administrators may make with respect to calculating financial aid eligibility when there are special circumstances that can’t be taken into account on the FAFSA or in the school’s standard cost-of-attendance allowances. In making professional judgment adjustments financial aid administrators must ensure fairness as well as compliance with federal regulations and institutional guidelines. These adjustments must also be appropriately documented.
For questions about the FAFSA or federal student financial aid programs you can contact the Federal Student Aid Information Center at 800-4-FED-AID. For more specific questions about your eligibility and the financial aid awarded to you check with the financial aid office at the school you plan to attend.
Financial aid application for students of permanent resident and US citizen status.
California Dream Act: https://dream.csac.ca.gov/
Financial aid application for students of AB-540 status.
Next Gen Personal Finance Next Gen Worksheet
A resource for students to think more about how to succeed in college without taking on too much student loan debt.