Each college award letter contains a variety of financial aid components or different types of college funding. It will depend on the cost of attendance of that college (COA) and your expected family contribution (EFC). For many middle income families your financial aid will vary greatly by the colleges you are considering. Need based financial aid is determined by the difference between the cost of attendance (COA) and the expected family contribution (EFC). If the EFC is higher than the COA then you will not qualify for need based financial aid. For this reason, some middle income families will not qualify for financial aid at a state public college yet will receive financial aid at a private institution. The private colleges typically have a higher cost of attendance than public colleges.
There are two major types of financial aid. Merit based financial aid is free money that is part of your financial award. It is typically granted for academics, athletics, or special talent you may have. Depending on your financial aid position merit money may be part of your need based financial aid package.
Self-help aid is not free money. It is a type of financial aid that requires the student to pay it back or earn it in some form. It could come as a certain type of student loan or a work study job. This is normally the first type of aid you will receive if you qualify for need based aid.
Understanding the financial aid components is described in this short view:
- Why financial aid will vary by school
- Types of financial aid
- Impact of outside scholarship
Evaluating and understanding the different types of financial aid will impact your college decision.