What is financial aid?

Financial aid is broken down into three categories: gift aid, loans, and work-study

Gift aid is broken down into grants and scholarships.  Grants and scholarships are free money to the student, meaning they do not have to be repaid. Grants and scholarships can be awarded by the federal government, states, colleges, and private funders or organizations. 

  • Grants are awarded to students based on financial need
  • Some examples of grants include:
    • The Pell Grant is awarded by the U.S. federal government to eligible students based on their family’s income, assets, family size, and other factors.  The maximum Pell Grant amount was $6,345 for the 2020-2021 school year.
    • The Cal Grant is need-based and requires a minimum of a 2.0 GPA, with additional funds for students with a 3.0 or higher.
  • Scholarships can be awarded to students based on many factors, including financial need, academic achievement, athletic achievement,  community involvement, ethnic or cultural background, etc.

 

Loans are a type of financial aid that students and parents can borrow to help pay for college.  Loans must be repaid, typically with interest.  Loans can be offered by the federal government, the college itself, and private lenders.

  • Federal Direct Subsidized Loans
    • Available to undergraduate students with financial need
    • Interest is paid by the government while borrowers are enrolled at least half time
    • 2.75% fixed interest rate as of July 1, 2020 (resets each July 1st)
  • Federal Direct Unsubsidized Loans
    • Available to any undergraduate and graduate student, regardless of need
    • Borrowers are responsible for all interest that accrues
    • 2.75% fixed interest rate as of July 1, 2020 (resets each July 1st)
  • Federal PLUS Loan
    • The Parent Loan for Undergraduate Students (PLUS Loan) is a loan for the parent(s) of undergraduate students.
    • Parents can borrow up to the full Cost of Attendance, minus any financial aid the student has received.  PLUS loans have a fixed interest rate of 5.3% as of July 1, 2020 (will be reset as of July 1, 2021).
    • Eligibility is based on a credit check, which determines whether a parent has an adverse credit history

 

Work-study is the third main type of financial aid. It provides students with a part-time job either on or off-campus, to earn money to help pay for college or personal expenses. work-study is usually funded by the federal government, but some states and colleges sponsor work-study programs as well.

How do I apply for financial aid?

Check out this link for a one-pager that explains all the steps in the process for California students to apply for financial aid. 

Here is the breakdown of how to apply for financial aid: 

  • Register for the FSA ID
    • The Federal Student Aid (FSA) ID is a self-selected username and password that is unique for each user. The FSA ID serves as a legal signature in order to submit the FAFSA. Both the student and one parent (dependent students only) will need to create unique and separate FSA IDs. 
  • Submit the FAFSA or the CA Dream Act Application
    • FAFSA: Free Application for Federal Student Aid. The FAFSA is required by all colleges and many technical programs and is available on October 1st of each year. The FAFSA is an application for financial aid from the government and is required in order to be considered for any federal or state-issued financial aid, in addition to some institutional funds. 
    • For students who cannot complete the FAFSA due to their citizenship status, they can complete the CA Dream Act Application. 
  • Submit the CSS Profile (if applicable)
    • The CSS Profile (College Scholarship Service Profile) is an additional financial aid form required by a large number of private colleges and a few public institutions to determine eligibility for institutional funds only – money from the college. 
  • Review Student Aid Report & Address Any Issues
    • The Student Aid Report (SAR) is a summary of all information reported on the FAFSA and is usually available to view a few days after a student submits the FAFSA. It provides important information about potential issues with a student’s FAFSA, the Expected Family Contribution, and other important information.
  • Complete Verification & Other Follow-up Tasks
    • Verification is a process in which the federal government and colleges can request copies of specific documents from a student to confirm the accuracy of the information reported on financial aid forms. Some students are randomly selected for verification while others are selected due to conflicting information that the colleges are seeing on the financial aid forms. 
  • Review and Compare Financial Aid Offers
    • Financial aid offers typically arrive from February through May, after notification of admissions acceptance. Financial aid offers to show the amount and type of aid that has been offered to a student at a particular college – a combination of federal, state, and institutional aid. These offers can arrive in many ways such as: regular postal mail, email, or more commonly via the college’s online portal.
    • Use the College Cost Calculator, a free online tool that helps students compare financial aid offers and the total costs of attending different colleges. Find it at uAspire.org/Calculator.
  • Pay Tuition Deposit
    • Once the student has decided which college they will attend they will likely need to pay a tuition deposit which holds their spot in the first-year class and for housing (if applicable). The tuition deposit amounts can range from $200 – $1000 and vary from college to college.
    • Note that in most cases, tuition deposits are NOT refundable. Students should compare all financial aid offers and only send a deposit to the college that they plan to attend.

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