Many factors are taken into account in order to determine how much money a student will be eligible to receive for college. This is calculated from the information provided on the FAFSA. The money that you are eligible to receive will be from a variety of sources including state and federal aid as well as school-based aid. The most important thing to remember is that if you do not fill out a FAFSA, you will not be considered for financial aid through federal, state or institutional sources (although you may apply for private loans, scholarships and grants on your own).
Once you submit your FAFSA, your Estimated Family Contribution (EFC) will be calculated and provided in a Student Aid Report (SAR). These reports will be submitted to the schools that you had requested on the FAFSA. Each individual school that you have been admitted to will determine the amount of aid that you will be awarded. This amount will be dependent upon the cost of the school, the financial aid available, scholarship, grant, and work-study eligibility and other opportunities.
There are some limits on the amount of federal financial aid that you can receive. Subsidized student loans can only be borrowed up to “150% of the published length of your program.” StudentAid.Ed.Gov explains that, “If you are an undergraduate student, the maximum amount you can borrow each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year you are in school and your dependency status.” Graduate and professional students are able to “borrow up to $20,500 each year in Direct Unsubsidized Loans [while] Direct PLUS Loans can also be used for the remainder of your college costs not covered by other financial aid.”
Federal Pell Grants are only awarded to undergraduate students and there are limits on the amount given out per academic year. For this 2018-2019 academic year, the maximum is $6,095.
Estimate the Cost of Your Education
The FAFSA4caster can help you and your family estimate your family's Expected Family Contribution. Students of all ages can get a feel for what type of aid they may be eligible to receive. The Federal Student Aid Office of the Department of Education recommends that even middle school students and their families take a look to estimate what they will receive based on their financial situation. This calculator helps prepare families for costs and essentially to plan accordingly with savings and other alternatives to funding education.
How is Financial Aid Calculated?
It is important to know how financial aid is calculated in terms of financial need, in addition to estimating the cost of your education in order to choose the best most affordable choice. Understanding how aid is calculated also allows families to view a larger financial picture of the college journey. Financial need is calculated by a school determining the Cost of Attendance (COA) and then subtracting the Estimated Family Contribution (EFC). Financial need-based aid comes in the form of subsidized loans, work-study programs, and grants. There are also unsubsidized loans, PLUS loans, and other grants available for those with less need. Even though award money can differ for many reasons among families, the calculation takes into consideration many factors.