Once you have been accepted to a college, you will receive your financial aid packages, also known as Award Letters or Award Notifications. Now what? What do all of these numbers mean? While it’s a great accomplishment to get accepted into the colleges of your choice, you must now understand the financial aid which will help you and your family afford tuition. One of the first challenges is to understand the terms and language financial aid offices use. Below is a list of key terms that will help!
When the college provides the COA, it includes tuition and fees, room and board, books, travel expenses and personal expenditures. The Cost of Attendance can be broken down into two types of costs: Billable and Non-Billable.
The Billable Costs include: tuition, fees, room and board. These costs are paid for through gift money (grants and scholarships) and loans. The Non-Billable Costs include books, supplies, transportation and miscellaneous expenses. These costs are generally paid for by student earnings or savings (work-study and/or summer earnings).
Award Letter: The way in which a college’s financial aid office assigns a specific fund or group of funds to an individual student. An award letter may include a variety of different grants, scholarships, loans or work-study. It’s important to understand that award packages will differ from college to college based on different resources and the family’s financial need level at each campus.
Electronic Award Notification: While many schools still send a paper award letter via the mail, some colleges invite you to go online to view your award. For example, Plymouth State University issues all of their award letters online. Whether your colleges provide paper or electronic awards, students can usually view their offer online at the college’s Web site.
Expected Family Contribution (EFC): The amount of money the student and the parent is expected to contribute to the student’s education for the upcoming academic year. The Department of Education calculates how much they feel your family can afford to pay for school next year. The EFC is determined by family size, number of family members in school, income and assets. The difference between the Cost of Attendance and the EFC is the student’s financial need, and is used in determining the student’s eligibility for need-based financial aid. Remember that many colleges won’t be able to meet full need, so students and parents should be aware that they will likely pay more than the EFC.
Verification: A review process in which the financial aid office requests supporting documentation related to income and assets. There are two methods to satisfy federal verification. The first is to use the IRS Data Retrieval Tool available through the FAFSA on the web application. Using this application will allow your FAFSA to be updated with tax information directly from the IRS. The other option is to request an IRS Tax Return Transcript and have this transcript sent to each college. In addition to these two methods, a school may still require additional documentation such as full tax return forms (1040's, 1040A's, 1040 EZ's, W2's, etc.) and other supporting documentation. As colleges are required by the federal government to verify at least 30% of all applications (some private colleges will verify 100% of all applications), do not be alarmed if you are asked to provide documentation for information you may have submitted as part of the financial aid process.
Financial Aid Officers award the best financial aid package to students based on the information they have available. However, in some situations, an appeal to the college for additional funds may be warranted. When completing the FAFSA form, financial information from the previous year is utilized, and a family’s ability to pay for college can certainly change greatly during that timeframe.
Please bear in mind the difference between discretionary expenses and necessary expenses or unforeseen circumstances. This distinction is what colleges will be reviewing to determine extra assistance. Some examples of “special circumstances” include: change in marital status, death of a parent, loss of employment, high medical expenses, paying for an elderly parent’s care or medical expenses, filing for bankruptcy, etc.
If you have any questions about why your student was awarded the financial aid he/she was, or wish to report a “special circumstance” please contact the Financial Aid Office at the individual college.
To learn more about federal financial aid, click here.