Financial Aid 101

Financial Aid 101

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 $7,395 for the 2023-2024 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
    • 4.99% fixed interest rate as of July 1, 2023 (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
    • 4.99% fixed interest rate as of July 1, 2023 (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 7.54% as of July 1, 2023
    • 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?

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 in December. 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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How Doubling the Pell Grant Can Make Life Easier for College Students

How Doubling the Pell Grant Can Make Life Easier for College Students

For low-income students, choosing the right college or university is often decided by how much money they will give us. We do not have the luxury of choosing a university in a favorable location or by enrollment size. Some of us can’t even choose the one that offers the best program for our major because it doesn’t grant us enough funding. We, low-income students, are faced with limitations when it comes to going to college. 

And yes, scholarships are available, and their abundance does inspire us to apply to as many as possible. However, their competitive nature means not all students will receive a scholarship and therefore we cannot rely just on them. In other words, we need our government to keep funding education access for low-income students. Opportunities that come with programs like the Pell Grant. 

What is the Pell Grant exactly? 

The Pell Grant is a need-based grant awarded to undergraduate students who have not obtained a degree and demonstrate exceptional financial need. It has provided support for about 7 million students each year across 5,000 institutions in the U.S. However, its purchasing power has declined significantly over time. According to the Institute for College Access and Success, the Pell Grant only covers 30% of a college education when it covered about 80% in 1980. 

As a Oaxacan low-income student raised in South Central LA and a personal recipient of the Pell Grant, I can vouch that receiving this aid was a significant help for covering my tuition at UC Berkeley during my first two years of college. I felt supported by this assistance and received an additional refund to cover my basic needs like food and housing. However, after my sophomore year, I noticed that my Pell Grant amount was declining as I reached senior year. 

This is why we need to build awareness to #DoublePell because it can close the affordability gap for low-income students, leading to higher enrollment and an increase in retention rates. Education Policy Advisor Shelbe Klebs argues that the COVID-19 pandemic has made many students “rethink their post-secondary plans for fall; some may forgo college temporarily or permanently to work to support their families while others may choose to attend a more affordable community college close to home instead of a pricier four-year school farther away.” 

Doubling the Pell Grant is the most effective way to make college affordable and available for all students. It can lead to more enrollment of low-income students of color, increase graduate school enrollments with more students pursuing higher education, decrease dropout rates, and restore its purchasing power. 

Having this grant available made my college selection process easier because I could choose a good school with the financial aid package that was right for me. I am #ThankfulForPell because I was able to graduate from a 4-year university. By doubling the Pell Grant, I believe more students like me can have greater access to higher education, reach their potential and empower their communities. 

All About Money – Financial Literacy During the College Application Process

All About Money – Financial Literacy During the College Application Process

When choosing an institution to complete your higher education, there are several factors that you need to consider. One of them being the financial aid and scholarship options available to students. College Unfiltered (CU) created “Let’s Talk Money”, to help you develop your financial literacy during the college application process. Here, CU talks about several topics ranging from loans to endowment, and misconceptions of estimated family contribution (EFC).

  • Endowment: Monetary and financial asset donations from alumni and companies to colleges and universities. Most endowment money is used to  fund public research, teaching, and some is allocated to funding scholarships and grants.
  • Scholarships: Money that does not need to be repaid! You can find scholarships through your institution or outside sources.
  • FAFSA: The Free Application for Federal Student Aid (FAFSA) is the application to receive financial aid from the federal government. FAFSA will also help you find your expected family contribution (EFC), this number determines your eligibility for certain types of financial aid. 
  • Loans & Generational Debt: Money that does need to be repaid. 

 

For access to the full toolkit, visit College Unfiltered’s website.

Mixed Status Households: How to Apply For In-State Tuition & Financial Aid in CA

Mixed Status Households: How to Apply For In-State Tuition & Financial Aid in CA

For a student who is a citizen or legal permanent resident but whose parents are undocumented, you must follow specific steps to ensure you will be considered for federal aid through FAFSA. 

  1. Paying Resident Fees at a CCC, CSU, or UC Submitting the FAFSA Application
      • When students are financially dependent on their parent(s), Residency for Tuition Purposes in CCCs, CSUs, and UCs can be based on the residency of the parents when the student is under a specific age
      • However, students who are citizens, legal permanent residents, or eligible non-citizens but whose parents are undocumented should be classified as residents in most instances if their parents meet all other residency requirements for tuition purposes. Keep in mind that this is a complicated process and not all students are accurately classified. 
      • If you are classified as a non-resident but believe that you meet the residency requirements for tuition purposes in CA, contact the residency officer at your campus. If you are unable to resolve it at that level, contact the Chancellor’s Office of the CCC, CSU, or the President’s Office of the UC regarding their policy on residency for students who are U.S. citizens with undocumented parents. 
      • If you cannot be classified as a resident, check to see if you meet the eligibility for AB 540/SB 68 and submit the nonresident tuition exemption form (AB 540 affidavit), along with any required proof (transcripts).
      • Being classified as a resident for tuition purposes or AB 540/SB 69 student is key to paying resident fees and being able to receive state-based financial aid. 
  2. Submitting the FAFSA Application
      • Students who are citizens, legal permanent residents, or eligible non-citizens, but whose parent(s) is/ are undocumented are eligible to submit the FAFSA application and receive federal financial aid. 
      • Students should apply at fafsa.ed.gov but should pay attention to these specific details if their parents are undocumented:
        • Students should obtain their own FSA ID
        • Parent(s) should include their information, if required
        • Parents should be sure to use 000’s for the Social Security Number (SSN) if they do not have a valid SSN. They should not use an Individual Tax Identification Number (ITIN). The application will request confirmation if you use zeros. Say yes.
        • Students should sign the FAFSA with their FSA ID and parents should “Print signature page” to sign the FAFSA because they cannot obtain an FSA ID
        • Students should save one copy of the signature page and mail the other to FAFSA. It can take up to six weeks to process, so be sure to send it early!
        • Students should check on www.fafsa.ed.gov to confirm that the parents signature has been received. The student’s FAFSA application cannot be processed until the parents signature is successfully added.
  3. Receiving Federal and State Financial Aid at a CCC, CSU, or UC
      • Students who filled out the FAFSA but were admitted as non-residents usually do not see CA state financial aid in their original financial aid award–only federal financial aid. Once approval of their residency classification or AB 540 status is approved, students must contact the Financial Aid department to ensure that all state financial aid for which they are eligible is added to their financial aid award. 

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Free or Reduced-Cost Social Services

Free or Reduced-Cost Social Services

Free or reduced-cost services like medical care, food, job training and more can be found around your area! Food or reduced-cost services are services that are free or are at a reduced cost for people with low-income. These services are also available for people with undocumented status. 

General:

  • Aunt Bertha is one of the largest and most used online social care networks for individuals looking to connect to Community Based Organizations (CBO’s) in the United States. To get started, input your zip code and Aunt Bertha will connect you with CBO’s near you. Financial assistance, food pantries, medical care, and other free or reduced-cost help starts here!
  • The Employment Development Department (EDD) of the State of California provides to keep employers, employees, and job seekers competitive. This website provides additional resources that may help you. 
  •  In many parts of California, you can call 2-1-1 to learn about resources in your community or contact these agencies and organizations directly to ask about their programs. Some programs may have eligibility requirements.

Reduced cost or free internet access:

  • The Affordable Connectivity Program is administered by USAC with oversight from the Federal Communications Commission. With the FCC’s Affordable Connectivity Program, you can save on your bill and may be able to get high-speed internet for free.
  • Spectrum Student Internet Packages offers high-speed internet for students and enough bandwidth to support multiple devices.

Information on low-cost computers:

Northern California: in English and Spanish

Southern California: in English and Spanish

Databases that include services for undocumented communities