How will I pay for college? Financial Aid Frequently Asked Questions I f you are planning to attend college, you should do a little research first. Find out how much it will cost to go to college, what part of that cost you and your family will be expected to pay, and what types of financial aid are available. The following information is intended to get you started.
What is Financial Aid? Financial aid is money awarded to a student to help pay educational costs. Most financial aid is awarded according to individual need and educational costs. The federal government, state government, postsecondary institutions, and private organizations provide financial aid to eligible students in the form of grants, scholarships, loans, and employment. Grants and scholarships are awarded based on either financial need or merit and do not have to be paid back. Employment can be a job provided by the college and can be on or off campus. A loan is money provided by a bank, the college, or the government, which must be paid back with interest. Private sources of financial aid come from social and civic organizations, religious organizations, and businesses. How much does it cost to attend college? Educational costs can differ significantly from one school to another, depending on the type of school and your program of study. In general, costs are lowest at a public vocationaltechnical school, higher at a public community or technical college, still higher at a public fouryear college, and highest at a private college. The total cost of attending school today may range from $2,000 per year to more than $30,000 per year. Financial aid programs have been created to help you pay for these costs. Schools with higher costs often have more financial aid available than lower cost schools. Therefore, when comparing costs, it’s very important to determine the financial aid available. This way you can determine what your out-of-pocket expenses will be. But remember, cost is only one factor in selecting a school. Consider your goals, what programs and 18 | Career Watch Arkansas
opportunities each school offers, and how well that school will help you meet your goals. What do educational costs include? The total educational costs are called the Cost of Attendance (COA) and include (1) tuition and fees, (2) books and supplies, (3) room and board, (4) transportation, and (5) miscellaneous personal expenses, such as clothing, laundry, and recreation. Because the COA includes items that are living costs but are not paid directly to the school, the actual amount billed by the school will be less than the COA. What is the family’s responsibility? The primary responsibility for financing a college education rests with the student and his/her family. The family is expected to pay for the cost of college to the extent that it is able. Financial assistance is designed to help with the difference between what the family can afford and the cost of attendance. The student shares in the family’s responsibility to pay for college and is expected to contribute from his/her earnings and savings. The amount the family is expected to pay toward the cost of college is called the Expected Family Contribution (EFC). How is the family’s expected contribution determined? Colleges, government agencies and organizations that award financial aid based on financial need use a process called Needs Analysis to determine how much the family is expected to pay towards the cost of a college education. This process uses both the parent’s and student’s income and assets and other information about the family, such as the number of family members in college, to calculate the Expected Family Contribution. During the needs
